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The Green SheetGreen Sheet

The Green Sheet Online Edition

March 22, 2021 • Issue 21:03:02

Readers Speak: Cash discounting online?

I've heard recently about cash discounting for card-not-present merchants, and I don't see how that's possible. What am I missing? You can't magically send cash over the internet.

Thom Smyth, Merchant Level Salesperson


We cannot, of course, magically convert the bills and coins consumers use for payment at physical POSs into digital form for card-no-present payment. However, it is possible for ISOs serving CNP merchants to have their gateways set up a cash discount option via the automated clearing house.

To do this, the ISO needs to establish two processing accounts for the merchant, one for cards and the other for ACH. Then the ISO can request that its gateway implement cash discounting for the ACH account on the back end. The cost for processing ACH transactions is drastically lower than for processing card-based transactions, which incur interchange fees. Thus, offering a cash type of discount to customers who select the ACH option is affordable for merchants.

Right now, being able to offer both a credit card and ACH option is becoming popular with merchants who send their customers invoices. These tend to be large-ticket or luxury items or services. ACH cash discounting does not yet appear to be incorporated into the checkout experience for ecommerce purchases, though it appears to be possible to do so.

This topic is explained in the March 8 episode of Merchant Sales Podcast, where co-hosts Patti Murphy and James Shepherd interview Hawkins Siemon, founder and CEO of Elevate Payment Alliance. In the interview, found at www.greensheet.com/podcasts.php, Siemon discusses how the ACH works and why a merchant would want to use it to offer customers an additional payment option. Depending on the gateway, setup can be seamless and easy for merchants to use. Thank you for your question, Thom. We hope you enjoy the podcast, as well as others in the series that address additional topics of interest.


Cash discounts, yea or nay?

Have you found interest in cash discounting among your merchants? What about surcharging? We will welcome your responses and other feedback on relevant issues at greensheet@greensheet.com. end of article

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