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Education

StreetSmarts SM

Cash discount – more pros than cons

By Dee and Emily Karawadra strong, long-lasting relationships. Elevate strives to grow
Impact Paysystem based on the success of its sales partners, merchants and
employees, and according to Hawkins, the company was
ne of the hot topics we get asked about daily the first ISO in the industry to offer ownership to sales
is the cash discount program. Many of our partners and employees.
merchant level salespeople (MLSs) and agents
O find this program to be a win-win product for He told us his team successfully embraced the cash
many scenarios. Most notably, when a merchant who is discount program through another processing partner.
averse to fees gets presented a cash discount program to We asked him a series of questions about what he and his
pass fees to the cardholder, it can be a real game changer team are experiencing, and he agreed to share his insights
for the sales person. in the Q&A below:
Q: From your experience in the field, how open are
At Impact PaySystem, we currently do not offer a merchants to the cash discount program?
cash discount program. However, we've learned from
our MLS/agent partners who sell this type of product A: This depends on the merchant type and the
through alternative providers, that it is proving to be personality of the owner. I would estimate 25 percent
very successful. Notwithstanding, in 2018, Visa issued an are adamantly opposed to the idea, 50 percent are
opinion that the cash discount product is non-compliant. open and ask follow-up questions, and the remaining
This left many sales agents and MLSs scratching their 25 percent are saying, "sign me up!"
heads. Additionally, Visa claimed that merchants already
participating in the program could be subject to non- Q: What business types have benefited the most from
compliance action. your cash discount program?

The major card brands also have said publicly they prefer A: We have had success with small ticket merchants,
the surcharge program, which is limited to certain states, including retail, convenience, deli and quick-serve.
and involves a delayed process for setting a merchant We also see a lot of merchants benefitting who
up. Unfortunately, this program is not ideal, because the provide professional services that are necessary to
requirement to register a participating merchant with the the customer, such as auto repair, used auto sales, tire
card brands or provide notification 30 days prior, tends sales, etc.
to be a hard sell for some merchants. Conversely, agents
and MLSs have reported the cash discount concept is Q: Are your MLSs experiencing any opposition?
picking up momentum within service industries, where A: By far, the number one concern merchants express
merchants are willing to pass fees along to customers. is fear of upsetting their customers and losing
Experience shared business. This is a valid concern, but the reality is far
less scary than the merchants believe. Merchants who
We interviewed Hawkins Siemon, one of our ISO/agent make it through the first month on the program are
partners, to discuss the cash discount program. He is the generally very pleased. They generally find there are
CEO and founder of Elevate Payment Alliance, an ISO only a handful of customers who say anything about
founded on doing business the right way and building
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