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Category: Cash Flow & Cost Savings

Learn how to reduce transaction fees, improve payment timing, and manage recurring revenue to support your small business’s financial health.

  • How “No Fee” Credit Card Processing Can Reshape Small Business Payments

    How “No Fee” Credit Card Processing Can Reshape Small Business Payments

    Reading Time: 5 minutes

    High credit card processing fees continue to squeeze small business profit margins. For every $100 a customer spends, you could be losing $3 or more in transaction costs. What if you could shift those costs off your ledger without simply raising prices? That’s the promise of “no fee” credit card processing.

    This model typically uses one of two options: surcharging or cash discounting, to transfer the cost of credit card fees to customers. Businesses keep more of what they earn, and customers choose how they pay. This approach is gaining traction in sectors where tight margins meet heavy payment volume.

    In this article, we’ll explain how no fee processing works, what tools and compliance measures you’ll need, and how the model impacts payment technology, small business payments operations, compliance and profit margins. Whether you run a local café, a service-based business, or a professional services firm, this guide will help you assess whether this payment strategy fits your operations.

    How No Fee Credit Card Processing Works

    Understanding this model requires separating surcharging from cash discounting. Both aim to reduce credit card fees, but they do so in very different ways. Each has its implications for operations, customer experience and compliance.

    Surcharging vs. Cash Discounting

    Surcharging means you add a fee to the credit card payment amount. For example: a $50 bill becomes $51.45 because a 2.9 percent fee is added.

    Cash discounting, by contrast, presents a higher “default” price and offers a discount when the customer chooses cash or another low-cost payment method. For example: a latte is listed at $5.50, but if paid by cash (or debit/ACH) the price drops to $5.00. Clients perceive a reward rather than a penalty.

    Both strategies require payment technology support and regulatory compliance, but cash discounting often involves fewer legal hurdles. In many U.S. states, surcharge programs are restricted or regulated more heavily.

    Required Tools & Setup

    Adopting a no fee processing model means configuring your payment systems and customer experience accordingly:

    • Payment terminals / POS: Your system must clearly distinguish payment types and automatically apply the correct surcharge or discount logic.
    • Software integration: The payment software must connect with your existing platforms (eCommerce, POS, accounting) to reflect correct pricing and transaction flows.
    • Compliance tools: You’ll need visible signage, customer disclosures at checkout, and printed receipts that reflect surcharge or discount amounts.
    • Hardware costs: Some providers offer low-cost or free terminals; others charge hundreds. For many small businesses, equipment under $600 is common.
    • Payment technology: A well-integrated gateway that supports dual pricing, surcharge rules, and reports on payment method shifts is key.

    Staying Compliant with Regulations

    Compliance is essential. Missteps can raise liability and reputational risk.

    • Transparent disclosures: Any surcharge must be clearly disclosed in advance of transaction completion. For cash discounts, the posted price should reflect the real cost and the discounted amount must be clearly visible.
    • State and card network rules: Some states prohibit surcharges altogether, while others allow them under specific limits.
    • Card network rules: Networks like Visa require at least 30 days’ notice before implementing a surcharge and specific receipt labeling.
    • Avoid misclassification: Surcharges apply only to credit card transactions, not to debit or prepaid cards in many cases.

    Before implementing, it’s wise to consult legal counsel and your payment processor representative to ensure your state statute, card brand rules and your workflows align.

    Benefits and Challenges for Small Businesses

    Main Benefits

    • Reduced credit card fees: By shifting the fee to customers or encouraging lower-cost payment methods, you improve profit margins and cash flow consistency.
    • Automated workflows: Modern payment systems can handle surcharges or discounts with minimal staff overhead, freeing you to focus on operations and customer experience.
    • Incentivizing alternative payments: Offering a cash discount encourages cash, ACH or debit payments. These methods carry lower processing costs.

    Potential Challenges

    • Customer reaction: Some customers may view added fees negatively when they appear unexpectedly. Clear upfront communication is critical.
    • Competitive pressure: If rivals do not pass on fees or appear to offer “free” card payments, you may face price perception risks.
    • Regulatory complexity: The compliance burden for surcharging is higher than for cash discounting. Mistakes can lead to chargebacks, fines or account termination.

    Which Industries Benefit Most?

    Businesses with narrow profit margins, frequent credit card transactions or high-ticket services often see the greatest gains from a no fee processing model. These include sectors like professional services, specialty retail, field service contractors and other operations where payment volume and fees combine to affect profitability.

    Implementation: Tools & Methods

    Here’s a practical roadmap to launch no fee processing:

    1. Assess fit: Review your transaction volume, average ticket size, customer payment habits and margin sensitivity.
    2. Select technology: Choose a payment platform that supports dual pricing logic, surcharge rules, integration with your POS/accounting system, and robust reporting.
    3. Draft communication plan: Prepare signage, online messaging and staff guidance so customers understand the payment method choice and fee or discount structure.
    4. Compliance review: Verify your state’s surcharge or cash discount laws, card brand notification requirements, and ensure your processor is configured correctly.
    5. Pilot and monitor: Launch in a controlled environment, track payment method shifts, monitor customer feedback and adjust pricing or messaging as needed.
    6. Scale: Expand once you’re confident in your technology, communication and compliance workflows. Then analyze impact on profit margins and cash flow.

    Decision Checklist: Is Your Business Ready?

    • Do you accept a high volume of credit card payments and feel that fees are eroding your margins?
    • Are many customers or transactions larger in value, making fee recovery more meaningful?
    • Will your customer base accept variable pricing depending on payment method?
    • Can you clearly communicate the structure, such as “Card price” and “Cash or ACH price”?
    • Are you operating in a state that allows surcharging, or are you prepared to implement cash discounting instead?

    If you answered “yes” to most of these, a no fee processing model may make sense.

    Choosing the Right Payment Technology Partner

    Your choice of payment technology and partner matters. Look for:

    • Integration with your existing POS, eCommerce or billing system.
    • Built-in support for surcharges or cash discounts, automated calculation and reporting.
    • Compliance features such as notice display, receipt formatting and card brand registration.
    • Real-time analytics showing how the payment method mix is shifting and how fees are being managed.
    • Transparent terms and full disclosure of how fees, discounts or alternative payments affect your finances.

    Final Thoughts

    Adopting a “no fee” credit card processing strategy is more than a pricing tweak. It is a structural change in how you manage payment technology, customer communications and profit margins. When executed well, it can shift processing costs away from your bottom line, reduce administrative overhead and give your business a stronger financial foundation. Success depends on transparent messaging, strong technology integration and strict compliance with payment industry rules and state law.

    If you’re feeling the squeeze of credit card fees, this model deserves a serious look. Like any operational strategy, the details matter.

    No Fee Credit Card Processing FAQs

    Q: How do surcharging and cash discounting affect customer satisfaction?

    A: Surcharging adds a line-item fee to credit card payments, which some customers view negatively. Cash discounting presents it as a reduction in price for choosing cash or another low-cost method. In many cases customers prefer it. The key to maintaining satisfaction lies in transparency and offering choice.

    Q: What legal or compliance issues should small businesses consider?

    A: Small businesses must understand both state-law restrictions and card-brand regulations. For example, some states ban surcharging entirely, while others restrict the surcharge to the business’s actual cost of card acceptance. Non-compliance can lead to fines, processing-account termination or regulatory scrutiny.

    Q: How do I decide if no fee credit card processing is right for my business?

    A: Evaluate your transaction patterns, customer payment behavior, competitive landscape and legal environment. Businesses with high ticket sizes, repeat customers who understand pricing structure and operations in states permitting surcharge or cash discount are stronger candidates. If you operate with low ticket sizes, high competition and less flexibility in pricing, the model may be less suitable.

  • Integrated Payments for ISVs: 7 Key Implementation Questions You Must Ask 

    Integrated Payments for ISVs: 7 Key Implementation Questions You Must Ask 

    Reading Time: 5 minutes

    When you embed payments into your software platform, the stakes are high. A well‑built payment solution can streamline operations, satisfy users, and unlock additional revenue. But get it wrong and you’ll face friction, lost business, and headaches.  

    Here are seven questions to ask before you roll it out; covering features, compliance, scalability, and user experience. Whether you’re running subscription billing or one‑time payments, these touch points will help you make wiser choices. 

    Here’s what we’ll cover: 

    • What features should your payment system offer? 
    • How can you create a smoother user experience? 
    • What security standards must you meet? 
    • Does the solution align with your goals and revenue model? 
    • How seamless is merchant onboarding? 
    • Will it integrate with your current tools? 
    • Can it handle your growth? 

    Let’s dive in and make sense of what matters most for your business. 

    1. What features does the payment technology offer? 

    Your payment stack should cover everything your merchants—or your own business—need for a seamless operation. That means APIs for onboarding, processing transactions, issuing refunds, managing disputes—and ideally, real‑time reporting. A strong set of features gives your team more flexibility and your merchants a better experience. 

    Solid documentation and flexible integration options matter. When your payment partner supplies clear APIs, sandbox environments, and developer support, embedding becomes easier. That technical backbone lays the foundation for a smooth payment flow within your platform. 

    2. How do you create a smooth customer experience? 

    Good features alone won’t save you if the user experience is rough. Your payment workflow should feel native — customers shouldn’t leave your platform, switch screens, or feel like they’re being redirected. Stay in context. Keep the look and feel consistent with your brand: matching colors, fonts, and tone. When customers trust the look, they’re less likely to abandon. 

    On the practical side, mobile‑friendly layouts, auto‑fill fields, and smart validation (detecting card type and catching errors before submission) make a big difference. If you handle subscriptions, tokenization, and saved payment methods are essential: friction‑free repeat payments equal loyal customers. 

    Beyond checkout, integration with your business systems matters. Automatically update customer records, invoices, and reports. Trigger emails with transaction details, including IDs, amounts, and account info. These small details reduce support tickets and build confidence. 

    3. Does the solution meet PCI DSS and other security requirements? 

    Handling payment data isn’t optional—it’s a responsibility. One key standard is PCI DSS (Payment Card Industry Data Security Standard). A Level 1‑certified solution can light up much of your compliance burden, because you don’t need to handle raw card data directly. 

    Look for features such as tokenization (so you never store actual card numbers), end‑to‑end encryption, and support for 3‑D Secure to verify identity during high-risk transactions. Modern fraud‑detection systems monitor user behavior, device signals, and transaction patterns—and help stop harmful activity before it hits you. 

    Compliance doesn’t end at processing. Audit logs, security monitoring, data‑retention policies—they all count. Your payment integration should help you purge sensitive info, maintain logs, and stay proactive, not reactive. 

    4. Does the payment integration match your business goals and revenue model? 

    Your payment system isn’t just a backend detail—it should align with how you make money and deliver value. Do you charge one‑time fees, subscriptions, or marketplace commissions? The system needs to support those models cleanly. 

    If your payments are a core part of your offering, white‑labeling becomes essential. Branded invoices, your pricing controls, the ability to present the payment experience under your name: these strengthen your brand’s presence and credibility. 

    In short: the payment solution should feel like your feature, not an afterthought. 

    5. How does merchant onboarding work, and what support is available? 

    If merchants or end‑users struggle to onboard, your adoption will suffer. Speed matters. Ideally, they should start accepting payments quickly—same‑day virtual terminals or plug‑and‑play hardware are big pluses. 

    The signup flow should live inside your platform: no bouncing to external sites, no separate logins. Your onboarding API should plug into your dashboard. Clear code samples, sandbox mode, and developer support: these make your integration smoother. 

    Support is equally important. You need your payment partner to offer technical assistance—not just during the build, but also while you go live and beyond. For SMBs, this can mean a more straightforward approval process; for enterprise clients, it might involve tailored onboarding and training resources. 

    Educational materials cut down your support burden and build merchant independence. Cover chargebacks, reconciliation, and compliance to make it easier for your merchants to get up to speed. 

    6. Will the payment solution work with your current business systems? 

    Your platform likely uses CRM, accounting, inventory, ERP, or some combination of these. Your payment integration should play nicely with those existing systems. Data should flow rather than require manual export/import. 

    For accounting, integration with tools like QuickBooks or Xero means your reconciliation is cleaner. For CRM: forward transaction history, billing status, and payment methods into Salesforce or HubSpot to ensure complete customer visibility. 

    From a technical standpoint: RESTful APIs, webhooks, SDKs for major languages—all speed development. Ensure the payment data’s format aligns with your naming conventions and field structure. Pre‑built connectors or plug‑ins save time. 

    Real‑time sync is critical: payment status updates, refunds, or disputes should be reflected instantly. If you’re running inventory or operations across locations, the integration needs to support that scale and complexity without demanding a data‑war manual effort. 

    7. Can the payment solution scale with your business? 

    Growth changes everything. You might expand into new markets, introduce new pricing models, or onboard more merchants. Your payment infrastructure must keep up. 

    Look for the capability to handle high transaction volumes without performance dips. If you expand geographically, support for local payment methods, multi‑currency, and region‑specific compliance is essential. If you shift your business model (say from one‑time purchases to subscription with add‑ons), your solution must flex accordingly. 

    A forward‑looking payment partner avoids the need to rip out the system and start over. Growth shouldn’t mean pain—it should mean momentum. 

    Conclusion 

    Integrating payments into your software platform is more than a technical hurdle—it’s a strategic decision. The seven questions we’ve covered provide a roadmap for your integration and long‑term success. 

    Start with the essentials: identify the payment features you genuinely need, design the user journey with your customers in mind, and lock down compliance to protect your business. 

    Then align your payment system with your revenue model, streamline merchant onboarding and support, ensure smooth integration with your tooling, and pick a provider built for your future. The best software businesses don’t treat these questions as a checklist—they treat them as pillars of strategy. 

    Take time, include your development team early, and partner with a payment provider that understands your software business. Your payment solution isn’t just a gateway—it becomes part of your product. By approaching it with care, you’ll build a payment system that supports your needs today and can build for the future. 

    FAQs 

    How can integrating payments create new revenue opportunities for my software business? 

    When you build payments into your software, you unlock new possibilities: you can earn via transaction fees, subscription billing, or offering premium payment features. At the same time, you boost user convenience, making your platform more attractive and sticky—and that helps you compete more effectively. 

    What compliance requirements should I consider when integrating a payment system, and how can I ensure my software business meets them? 

    First, the foundation: PCI DSS sets the rules for storing, processing, and transmitting cardholder data. Use tokenization and encryption. Choose a payment partner certified at Level 1 to reduce your compliance scope. Beyond that, monitor changes in regulations, ensure you log events, purge data when required, and stay proactive rather than reactive. 

    How can I ensure a payment solution will grow with my business and support expansion into new markets? 

    Look for a provider with proven infrastructure, multi‑currency support, local payment methods (for your target regions), and flexible pricing models. Your payment stack should adapt if you change your business model or client base. Don’t pick a system that locks you in—or locks you out. 

  • Case Study: How an Autopsy Doctor Saved $20K with Aurora’s ARISE Platform

    Case Study: How an Autopsy Doctor Saved $20K with Aurora’s ARISE Platform

    Reading Time: 2 minutes


    When The Autopsy Doctor, a provider of private autopsy services, faced mounting credit card processing fees, they turned to Aurora Payments and the ARISE platform for a more cost-effective and flexible solution. By offering clients a choice between ACH and credit card payments, they not only saved $20,000 in fees in the first year but also improved customer satisfaction and streamlined back-office operations.

    The Client

    The Autopsy Doctor provides independent autopsy services for families, legal professionals, and healthcare organizations. With an average transaction size of $6,000, payment processing costs were a significant concern for the business. 

    The Challenge

    High credit card fees were threatening The Autopsy Doctor’s bottom line. With every transaction costing over $240 in fees, the company faced pressure to increase service rates or find a more efficient way to manage payments. The administrative burden of following up with clients on payment options further strained their resources. 

    The Solution

    Aurora Payments introduced The Autopsy Doctor to the ARISE platform, which enabled dual-charging functionality, allowing clients to pay via ACH or credit card using a single payment link. Clients could instantly see how much they would save by selecting ACH, encouraging more cost-effective payment choices and faster payment. 

    The Results

    • $20,000 saved in credit card processing fees in the first year 
    • Majority of clients now choose ACH, saving approximately $240 or more per transaction 
    • Maintained competitive pricing without raising rates 
    • Reduced administrative work, leading to time and cost savings 

    Client Quote

    “Our clients appreciate the ability to choose how they pay and really like seeing how much they save with ACH. We saved over $20,000 last year alone, which helped us avoid raising our rates. It’s a win-win. And we save time, too, because there’s less back-and-forth.” – 
    Marcie Schultz, Administrator, The Autopsy Doctor 

    Conclusion

    For The Autopsy Doctor, switching to Aurora’s ARISE platform has delivered measurable financial and operational results. By empowering clients with flexible payment options and reducing overhead, the company has strengthened its business and client relationships — all without raising prices. 

  • Is Dual Pricing Legal? Compliance Checklist for SMBs 

    Is Dual Pricing Legal? Compliance Checklist for SMBs 

    Reading Time: 5 minutes

    If you own a small business, you’ve likely felt the pressure of rising credit card processing fees. Dual pricing—offering one price for cash and a slightly higher price for card payments—can help offset that burden. But is dual pricing legal? The short answer: Yes, in all 50 U.S. states. That said, compliance means following federal laws, state regulations, and card‑network rules to ensure transparency and fairness for customers. 

    This guide covers what you need to know about dual pricing: how it works, how it differs from surcharges, what the federal and state rules require, and how to implement it in your business. 

    Federal and State Compliance Rules for Dual Pricing 

    Federal Compliance Guidelines 

    At the federal level, pricing variation based on payment method must always be clearly disclosed to customers. They must understand the price difference up‑front so their payment choice is truly voluntary.  

    State‑Specific Regulations 

    States often layer additional requirements. Some states mandate that advertised pricing must reflect the total amount a customer pays, regardless of payment method; others require that any price difference based on payment method be clearly communicated in signage, menus, or online materials. For example, in some jurisdictions, you cannot advertise one price and then add a card fee at checkout unless you are properly registered. 

    Disclosure & Customer Notification 

    Successful dual‑pricing programs depend on clear upfront disclosure. That means signage, online listings, and point‑of‑sale displays must show both payment options or clearly state the cash discount. Receipts should capture the complete breakdown of payment method, price, and discount. Any ambiguity or last‑minute surprise increases the risk of regulatory or card‑network issues. 

    Card Network and Payment Processor Rules 

    Card Brand Requirements 

    Major networks such as Visa and Mastercard require merchants to clearly communicate any price differences by payment method in a way that is easy for customers to understand. Dual pricing must be presented as a discount for cash, not a penalty for using a card. 

    Point‑of‑Sale Display Rules 

    Point‑of‑sale systems, menus, digital interfaces, and in‑store signage must display both prices (cash and card) or, at a minimum, the standard (card) price plus a clearly stated discount for cash. The customer must know before paying how their payment choice affects the final price. Payment systems must also correctly record the transaction type and amount to support this structure. 

    Data Security and PCI Compliance 

    Even with dual pricing, you still handle card transactions and must comply with PCI DSS (Payment Card Industry Data Security Standard) requirements. That means securing transmission of card data, encrypting storage, maintaining up‑to‑date systems, and monitoring risks. Offering transparent pricing doesn’t relieve you of security obligations.  

    Dual Pricing Compliance Checklist for Small Businesses 

    Use this checklist to implement dual pricing while staying compliant and protecting your business. 

    • Display clear pricing information. The posted price should equal the card payment price, with a clearly shown discount for cash. If you display both prices, the card price must be the predominant one. 
    • Communicate pricing differences to customers. Train staff to explain the cash vs card pricing options at checkout. Use consistent phrasing, e.g., “Your total is $100 if you pay with a card; if you pay in cash, it’s $96.” Provide written materials (menus, estimates) that show both options. 
    • Ensure point‑of‑sale systems support dual pricing. Your POS must reliably differentiate cash vs. card payments, apply the correct price, record receipt information, and produce clear totals. 
    • Update all signage and digital displays. On your site, in menus, and at your physical location: show payment‑method pricing clearly and avoid confusing language like “card fee” which may trigger surcharge rules. 
    • Review state laws regularly. Some states change rules on surcharges and cash discounts; dual pricing may be lawful, but display/disclosure requirements can evolve.  
    • Ensure staff training and documentation. Employees must understand how to explain payment‑option pricing, apply the correct charges, and avoid mis‑statements. Provide scripts or role‑play as needed. 
    • Partner with a payment processor knowledgeable in dual pricing. Ensure your processor supports compliant dual‑pricing programs, offers signage templates, and ensures your setup won’t trigger card‑network violations. 

    Practical Considerations for Small Businesses 

    • Dual pricing works best when your business processes significant card transaction volume and margins are thin. By showing a cash discount instead of a card surcharge, you preserve customer choice and reduce cost pressure.  
    • Be careful not to confuse “discount for cash” with “card fee” (surcharge). Some states ban surcharges but allow discounts. Proper framing is essential.  
    • Monitor customer reaction. Dual pricing may cause card‑preferring customers to feel penalized or choose a competitor. Presentation, transparency, and staff explanation matter. 
    • Document your dual pricing program—including how you calculated the discount, signage, and training materials—to demonstrate compliance if asked. 
    • Keep up with your paperwork, signage, and system checks monthly: verify pricing displays are correct, receipts show dual pricing correctly, staff know procedures, and POS systems are configured correctly. 

    How to Implement Dual Pricing the Right Way 

    Dual pricing is a legal and viable option for small businesses looking to reduce the burden of credit‑card fees while offering customers a choice. It’s particularly relevant for merchants with tight margins and significant card volume. However, it delivers value only when done transparently, with clear communication, system correctness, and full compliance with federal, state, and card‑network rules. 

    By clearly displaying pricing, offering a genuine cash discount rather than a hidden card surcharge, training your staff, and using compliant systems, you position your business to benefit from this approach while maintaining customer trust. 

    Dual Pricing Compliance FAQs

    Q: Is dual pricing the same as adding a surcharge for credit card payments? 

    No. Dual pricing is structured as a cash discount, not a card surcharge. The posted price is the card price, and customers receive a discount when paying with cash. Surcharging adds a fee on top of the advertised price for card payments, which is regulated differently and banned in some states. 

    Q: What information must be shown at the point of sale to stay compliant with dual pricing rules? 

    The card price must be clearly displayed as the standard price. If a cash discount is offered, it must also be shown clearly, either as a percentage or dollar amount. Pricing differences should be visible on signage, menus, digital displays, and receipts—before the customer makes a payment decision. 

    Q: Can I use dual pricing if I operate in multiple states with different rules? 

    Yes, but you must align your pricing displays and disclosures with the consumer protection laws in each state where you operate. Some states require that all advertised prices match what the customer pays, while others allow more flexibility. Check your signage, POS settings, and website to ensure compliance in each location. 

    Q: How do I train employees to explain dual pricing without confusing customers? 

    Give staff a simple script such as: “Your total is $50 if you pay with a card, or $48.50 with cash.” Emphasize that this is a cash discount—not a penalty for using cards. Consistent, clear communication prevents misunderstandings and supports a positive customer experience. 

    Q: Do I need a specific payment processor or system to implement dual pricing? 

    Yes. Not all processors support dual pricing in a compliant way. You’ll need a system that can display dual prices at checkout, apply the correct total based on payment type, and capture accurate receipt data. A processor familiar with card‑brand rules and state compliance—like Aurora Payments—can help you implement dual pricing correctly. 

  • ACH Payment Processing for Small Businesses: Why It’s Growing & What You Should Know 

    ACH Payment Processing for Small Businesses: Why It’s Growing & What You Should Know 

    Reading Time: 5 minutes

    ACH payments are increasingly used by small businesses that want to reduce costs and simplify operations. With lower fees than many credit card transactions and faster turnaround than paper checks, ACH can help improve cash flow while providing a secure way to move funds. Whether you’re running payroll, collecting subscription payments, or paying vendors, ACH offers a reliable approach for routine transactions that doesn’t overcomplicate things. 

    If you’re ready to streamline your money movement, understanding the fundamentals of ACH is helpful. From setup to compliance, this article walks you through what you need to know to decide whether ACH is a fit for your business. 

    Why ACH Payments Are Growing for Small Businesses 

    Small businesses are increasingly turning to ACH payments to manage rising costs and operational challenges. This payment method offers real financial benefits, including cost savings, faster settlement, and enhanced transaction security. 

    Lower transaction costs

    One of the most significant advantages of ACH payments is the lower transaction fees compared to many credit‑card options. Whereas credit‑card fees often include a percentage of the transaction amount, as well as fixed per‑transaction charges, ACH payments typically have a more predictable, fixed rate regardless of transaction size. For businesses with subscription or recurring payment models, simpler, predictable transaction fees help maintain margins and ease budgeting. 

    Faster processing times

    ACH payments are known for relatively quick settlement. The network managed by Nacha (and others) supports next‑business‑day or even same‑day settlement in many cases. Qualifying payments submitted before cut‑off times can settle the same business day, giving businesses more control over cash flow and improving access to funds when timing matters. 

    Improved security and cash‑flow management

    Electronic ACH transactions provide a digital audit trail, which supports tracking, reconciliation, and dispute resolution. Because ACH moves funds through networked financial institution systems rather than relying on manual, paper-based processes, the risk of lost checks or manual-entry errors is reduced. In addition, recurring payments—such as memberships or subscriptions—are handled well by ACH, enabling consistent cash‑flow since businesses don’t need to chase late payments or switch methods frequently. 

    How ACH Payments Work 

    To use ACH effectively for small‑business payment processing, it helps to understand the components and transaction flow. 

    The ACH process involves multiple parties: the business (originator), its bank (Originating Depository Financial Institution – ODFI), the ACH operator (such as The Clearing House or the Federal Reserve FedACH system), and the receiving bank (Receiving Depository Financial Institution – RDFI). 

    Here is a simplified flow: 

    1. Your business instructs your bank (ODFI) to initiate ACH transactions (credits or debits). 
    1. The ODFI batches and forwards those transactions to the ACH operator. 
    1. The operator sorts and forwards entries to the appropriate RDFIs. 
    1. The RDFIs post the funds to consumer or business accounts. 
    1. Settlement times vary: many standard ACH transactions settle within 1 to 2 business days, while qualifying payments may settle the same day. 

    Types of ACH transactions

    ACH credits: Payments pushed from your account to another (vendor payments, payroll deposits). 

    ACH debits: Pull funds from a customer’s account (with proper authorization) for membership dues or subscription billing. Debits typically require stronger authorizations and are subject to return‑rights rules. Credits often settle faster because the originator controls when the payment is initiated. 

    Setting Up ACH Payments 

    Once you decide ACH is relevant, there are compliance and technical steps to follow. 

    First, your business will need a commercial bank account and an ACH‑enabled payment processor or bank. You must obtain proper authorizations from customers before initiating ACH debits. That authorization should include the customer’s name, bank account, and routing numbers (or other acceptable verification), the payment amount or a variable amount indicator, frequency, your business name, and contact details. For recurring payments, you should notify customers in advance of changes. 

    Compliance with Nacha’s operating rules is vital: you must maintain records, manage returns (such as NSF or closed‑account returns), and monitor return rates. Excessive return rates may trigger penalties or loss of ACH privileges.

    On the technical side, integration may involve your processor’s API or portal. Once underwriting is complete and your account is approved, you can begin ACH processing—with benefits like cost savings and operational simplicity that make the effort worthwhile. 

    ACH Payment Processing: Pros and Cons 

    It’s important to weigh both the benefits and challenges of ACH payment processing to decide how it fits your business model. 

    Benefits: 

    • Cost efficiency: ACH transaction fees are typically much lower than credit‑card fees. 
    • Predictability: Recurring ACH payments provide steady, scheduled cash flow. 
    • Reduced manual tasks: Automated debits or credits can reduce errors and administrative burden. 
    • Security: Digital trail and network controls help reduce the risk of fraud. For example, the ACH Network is expanding Same‑Day ACH and has a robust processing infrastructure. 

    Drawbacks: 

    • Settlement time: Standard ACH may take one to two business days (or more) to settle, unlike real‑time payment networks. Late‑day or holiday initiations can add delay. 
    • Return or failure risk: Errors (wrong account number, closed account, insufficient funds) cause returns or failed transactions, which may incur fees or delays. 
    • Domestic limitation: ACH is primarily for U.S. bank‑to‑bank transfers; international payments often require wire transfer or other higher‑cost alternatives. 
    • Setup and compliance: Proper authorization, record‑keeping, and monitoring are needed; failing to comply with operating rules may pose a risk. 

    Impact on Cash Flow 

    For a small business, the ability to predict cash flow and manage transaction costs matters significantly. Using ACH can strengthen cash‑flow management by reducing variable fees and enabling regular, automated payments. For companies with subscription or membership models, ACH debits can turn unpredictable customer behavior into predictable revenue streams. 

    For example, suppose a business currently pays 3% per transaction on credit‑card payments and switches to ACH at a lower fixed transaction fee. In that case, the cost savings add up—and the reduced cost may help support growth or free up resources for other investments. At the same time, you should plan for settlement gaps: if standard ACH settlements take a day or two, you may need to manage working capital or short‑term cash needs accordingly. 

    Getting Started with an ACH Solution 

    Choosing the right ACH payment processor is a critical decision. When evaluating providers, focus on features such as transparent transaction fees, reliable settlement times, strong security, recurring billing support, and integration with your existing systems. 

    For example, if you partner with a provider that offers robust ACH credits and debits, supports recurring payments, and aligns with your small‑business needs, then you can streamline payments, reduce fees, and enhance your operational workflows. 

    Why ACH Belongs in Your Small Business Payment Strategy 

    ACH payment processing offers small businesses a compelling alternative to traditional payment methods. With lower transaction fees, predictable recurring payment workflows, and the ability to manage cash flow more effectively, ACH can be a key tool in your payment‑processing strategy. 

    That said, success with ACH requires choosing the right provider, understanding the settlement timelines, and securing proper customer authorizations. By evaluating transaction fees, integration, security, and workflow impact, you can determine whether ACH deserves a prominent place in your payments portfolio. 

    ACH Payment Processing for SMBs FAQs

    Q: How can small businesses ensure compliance with Nacha rules when using ACH payments? 

    Small businesses should implement secure processes for managing bank‑account information, enforce proper customer authorizations (especially for ACH debits), verify routing numbers, monitor return rates, and maintain documentation as required by the Nacha Operating Rules. 

    Q: What should I do if an ACH transaction is delayed or fails because of insufficient funds? 

    If a transaction is rejected or returned for insufficient funds, contact your customer to identify when funds will be available and consider re‑processing or offering an alternative payment method. Review the payment processor’s policies on returns and any associated fees. 

    Q: How fast will I get paid after a transaction?

    Most solutions offer next-day or same-day payouts on card transactions. Faster access to funds helps pet care businesses manage cash flow, cover supplies, and reduce financial stress.

    Q: How does ACH payment processing help businesses with recurring billing manage their cash flow more effectively? 

    ACH allows businesses to automate recurring payments, generating predictable revenue and reducing time spent chasing late payments. With fewer manual invoice cycles and more consistent payments, companies can forecast cash flow more reliably and devote resources to core operations rather than collection efforts. 

  • Top 5 Must‑Have Features in ACH Payment Processing for Small Businesses

    Top 5 Must‑Have Features in ACH Payment Processing for Small Businesses

    Reading Time: 6 minutes

    ACH payment processing is increasingly a preferred choice for small businesses seeking to reduce costs and simplify transactions. The right ACH solution can help you manage subscriptions, process large invoices, or provide a more reliable payment method. But choosing the wrong one could mean higher fees, awkward integrations, or even unnecessary security exposure. 

    Here are five critical features to evaluate: security and compliance, transparent and fair pricing, smooth business‑system integration, fast and dependable processing, and an easy‑to‑use interface supported by responsive customer service. These elements form the foundation of a payment system that supports your business—rather than working against it. 

    Top 5 ACH Payment Processing Features

    Below, we’ll explain why each feature matters and how to identify the right solution for your needs. 

    1. Security & Compliance Protection 

    When you collect customers’ bank account details, protecting that data is non‑negotiable. A data breach can erode trust overnight—and dealing with the aftermath can be expensive, time‑consuming, and damaging to your reputation. That’s why a credible ACH solution must bring multiple layers of protection. 

    At the technical level, look for strong encryption: ideally AES (Advanced Encryption Standard) for data at rest, and TLS (Transport Layer Security) for data in motion.

    But encryption is only one part of the story. To protect bank‑account information after a transaction is complete, your provider should support measures such as tokenization (replacing real account numbers with random tokens), truncation (showing only the last four digits), or deletion of sensitive information once processing is done. 

    Secure communication channels between your systems and the provider’s infrastructure also matter. Technologies such as VPNs and SSL certificates provide additional protection by making data interception much more difficult. 

    Authentication protocols are also critical. Multi‑factor authentication (MFA) for access, device‑fingerprinting, and IP‑address monitoring can all help flag unusual login attempts and prevent unauthorized access. 

    Finally, ensure your provider maintains compliance with the rules of the National Automated Clearing House Association (Nacha) and relevant regulations. The ACH network processes vast volumes of transactions, and adherence to its operating rules ensures the payment method is reliable and regulated.  

    2. Clear and Affordable Pricing 

    Small‑business budgets are tight. Unexpected fees or opaque cost structures can disrupt cash flow and erode margins. That’s why transparency in pricing is essential. 

    Choose a provider that clearly lists all per‑transaction fees, setup costs, monthly service charges, and any additional fees for support or reporting. With ACH transactions generally costing less than credit‑card processing, the potential savings can be significant.

    Be alert for hidden charges—some providers may advertise low transaction rates but apply extra fees for services you assume are included. Make sure you understand recurring and setup fees before moving forward. 

    Also, investigate cost‑reduction options. Some processors (including Aurora Payments) may offer features such as dual‑pricing, surcharging, or cash‑discount programs to help offset processing costs and protect your margins. 

    Think beyond just the transaction fee: also evaluate your fixed costs and variable costs based on your expected volume. Will the pricing model scale as your business grows? Some providers offer volume‑based pricing that lowers costs as your payment volume increases. 

    3. Integration with Business Systems 

    A payment system isn’t isolated—it needs to support your existing workflows. The right ACH solution will integrate smoothly with your accounting software, CRM, invoicing platforms, e‑commerce system, or subscription‑billing system. That integration can reduce manual data entry, improve accuracy, and give you clearer visibility of your financials. 

    Look for strong APIs and pre‑built connectors for tools like QuickBooks, Xero, or Sage. DEBIT or credit entries should automatically reconcile with your accounting system when payments go through. 

    If you sell online via platforms such as WooCommerce or Shopify, the ACH solution should embed directly into your checkout or invoicing flow. That reduces friction for your customers and avoids workarounds. 

    If your business uses subscription billing, ensure your ACH processor integrates with your subscription‑management software—so if a customer’s status changes, their payment schedule adjusts automatically. 

    Before signing up, verify that real‑time synchronization is supported, and test how well the processor interacts with your existing systems. Good integration should simplify your workflow—not complicate it. 

    4. Fast Processing and System Reliability 

    Cash flow is the lifeblood of a small business. The faster and more reliably payments clear and settle, the better you can plan and operate. Traditional ACH payments often took 1–3 business days; recent improvements have enabled next‑day or same‑day settlement.  

    When evaluating providers, investigate their processing speeds, uptime guarantees, and fail‑safe systems. Ask about backup processors, disaster‑recovery protocols, and how the provider handles failed or returned transactions (for example, retry logic). 

    Reliability isn’t just about uptime—it’s about consistency. If recurring payments fail or settle too slowly, it may lead to service interruptions, customer complaints, or increased administrative overhead. In subscription or service‑business models, reliability is critical. 

    5. Simple Interface and Customer Support 

    Even the most advanced ACH solution won’t help if it’s challenging to use or if you’re on hold for hours when a problem occurs. For many small businesses, the payment processor needs to be intuitive, efficient, and backed by responsive support. 

    Look for a dashboard that allows you to set up ACH batches, e‑checks, or direct deposits with minimal clicks. Key tasks—such as entering routing/account numbers or setting up NACHA‑compliant debit authorizations—should be straightforward. 

    A platform that works well on desktop, mobile, and tablet gives you flexibility—especially if you operate remotely or on the go. 

    Automation is another feature to prioritize: recurring payments should be configurable so you don’t have to re-enter the same customer data every month. That not only saves time but also reduces human error. 

    The dashboard should surface actionable information: your account balance, outstanding transactions, decline reports, and detailed transaction histories—all without requiring you to dig through menus or generate custom reports. 

    Customer support is the other side of the coin. Prefer providers that offer multiple support channels (phone, email, live chat) and that are staffed by personnel who understand ACH‑specific issues (returns, NSF, bank rejections, etc.). Fast response times matter when payment systems are down or a batch fails. 

    Finally, make sure your customers (the payors) can authorize ACH debits easily—via secure links or payment pages. A strong front‑end experience helps reduce friction and encourages timely payments. 

    Feature Comparison

    When evaluating ACH payment processing providers, consider how each feature impacts your day-to-day operations and long-term growth.  

    • Strong security and compliance measures reduce the risk of data breaches and regulatory issues, though more advanced protection may involve a steeper learning curve or longer setup times. Many providers offer basic security features at no additional cost, but it’s important to verify exactly what’s included. 
    • Transparent pricing helps with budgeting and prevents unexpected fees. While ACH is generally more affordable than credit card processing, flat-rate fees may not be ideal for very small transactions. Be sure to weigh both fixed and variable costs based on your transaction volume.  
    • System integration is another key area: solutions that connect easily with your existing accounting or CRM tools can automate workflows and reduce manual work, although more complex setups might require technical resources or setup fees.  
    • Fast processing speeds and system reliability also directly impact your cash flow—some providers offer expedited services, but they may come at a premium.  
    • An intuitive interface and responsive customer support can make a big difference in daily usability. While advanced dashboards offer more control, they may take time to learn, and support services may or may not be included in your processing fees. 

    Note: ACH settlement times vary. Although same‑day ACH is available, standard transactions may still take one or more business days, and the fee structure varies by provider.  

    System integration also varies in complexity: a simple plugin may suffice for some platforms, while connecting to an ERP or back‑office system may require more time but deliver greater long‑term efficiency. 

    Choosing the Right ACH Solution for Long-Term Success 

    Selecting the right ACH payment processing solution can significantly improve how your small business handles payments, cash flow, and customer relationships. The five features discussed—security and compliance, transparent pricing, system integration, processing speed and reliability, and a user‑friendly interface with solid support—are essential both for your daily operations and long‑term growth. 

    Robust security shields your business from data risk; transparent pricing gives you control over costs; integration streamlines workflows; faster, more dependable processing supports smoother cash flow; and ease of use and responsive support help you avoid unnecessary operational roadblocks. 

    The feature comparison shows that each feature has trade‑offs; the goal isn’t perfection in a single area but a strong balance across all five. Evaluate your business from multiple angles—current volume, growth trajectory, systems in use, customer payment behavior—and weigh potential providers accordingly. 

    As you assess your options, keep these criteria front of mind. A strong ACH solution won’t just meet your current needs—it will support your business as it grows, letting you focus on serving your customers and achieving your goals rather than managing payment headaches. 

    ACH Payment Processing Feature FAQs

    Q: What should I look for to ensure an ACH payment‑processing solution works smoothly with my current business systems? 

    Prioritize compatibility with the platforms you already use—for example, accounting software (QuickBooks, Xero), invoicing platforms, and CRM systems. Features like pre‑built connectors or plugins significantly reduce implementation time. Also, confirm the provider offers an API so you can tailor workflows and avoid manual data entry. 

    Q: How can I verify that an ACH payment processor has strong security measures to protect customer data? 

    Check that the provider uses encryption for account‑routing details (both in transit and at rest), supports multi‑factor authentication (MFA), and offers monitoring of unusual activity (such as device‑ or IP‑based alerts). Also, review whether the provider adheres to NACHA rules and applicable compliance standards. 

    Q: How can transparent pricing in ACH payment processing help small businesses manage their budgets? 

    Transparent pricing lets you predict payment‑processing costs upfront and avoid surprise fees. Because ACH fees are typically lower than credit‑card fees, many small businesses use ACH to reduce operating expenses and channel savings into growth or customer service. 

  • How Jewelers Can Lower Credit Card Processing Fees Before the Holiday Rush

    How Jewelers Can Lower Credit Card Processing Fees Before the Holiday Rush

    Reading Time: 3 minutes

    Peak season brings big sales—and bigger processing costs. In our 30-minute webinar, How to Save Money on Credit Card Processing Fees During Peak Buying Season, payments expert Jim Luff and Aurora’s head of integrated partners John Badovinac shared practical ways jewelers can reduce fees, avoid costly errors, and keep more of every holiday sale.

    Watch the full webinar replay: View the recording

    Here’s a recap of what Jim and John covered during the webinar, that includes five takeaways you can apply now to start saving today.

    Why fees spike during the holiday

    The November–January surge means more transactions, more online orders, and more premium rewards cards—all of which push costs up. Even a small increase in your effective rate can quietly shave thousands off holiday profits.

    Quick definition: your effective rate = total fees ÷ total card sales. If it’s creeping higher month to month, you’re leaking margin.

    5 biggest takeaways for jewelers

    1. Know what you can (and can’t) negotiate

    Every transaction includes:

    • Interchange (set by card networks; not negotiable)
    • Assessments (small card-brand fees; not negotiable)
    • Processor markups (your negotiable area)

    Your leverage lives in the markup and in eliminating the errors that cause downgrades.

    2. Stop “cost creep” at the source

    Cost creep = gradual fee increases or add-ons that go unnoticed.

    • Read the fine print on monthly statements for new or raised fees.
    • Calculate your effective rate monthly and track it.
    • Watch for miscellaneous or non-qualified line items.

    Pro tip: If effective rate > ~3% without clear justification, it’s time for a review.

    3. Avoid downgrades (they’re silent profit killers)

    Transactions cost more when required data or timing criteria aren’t met.

    • Settle batches within 24 hours
    • Always use AVS (address verification) for online/CNP sales
    • Prefer EMV/tap-to-pay over manual keying
    • Ensure your POS sends the right data every time (integration helps)

    4. Choose—and encourage—the right payment mix

    Not all tenders cost the same.

    • PIN debit is typically cheaper (Durbin-capped)
    • Consider your Amex strategy (today it’s often more competitive)
    • Offer ACH for high-ticket purchases where appropriate
    • Enable digital wallets for faster, secure, lower-risk acceptance

    5. Cash discounting vs. dual pricing

    Both are legal for jewelers when implemented correctly and transparently.

    • Cash discounting: display a price that includes up to ~4% for card; discount at POS for cash/PIN debit/ACH
    • Dual pricing: show cash and credit prices side by side
    • Requirements: clear signage at entry and POS; compliant receipts; never create a “profit center” via surcharging

    If you’re unsure, get help configuring signage, receipts, and POS settings so you remain in compliance and customer-friendly.

    What to check on your merchant statement (fast audit)

    • Markup structure: Are you on cost-plus with a visible processor markup?
    • Negotiables: monthly statement/service fees, batch fees, chargeback fees, early termination, gateway (sometimes waived if owned by provider)
    • Non-negotiables: interchange + assessments (but you can qualify for better categories by fixing workflow issues)

    Want a second set of eyes? Request a no-cost rate review: Contact Jim Luff

    Pre-holiday payments checklist

    • Rate review completed before Thanksgiving
    • Hardware ready: EMV + tap-to-pay + digital wallets + ACH enabled
    • Staff trained: refunds/voids (void same-day to avoid double fees), ID checks, fraud red flags
    • PCI compliant: if you see a “non-compliance” fee, recertify to stop the ~$30/mo penalty
    • Clear signage: if using cash discounting/dual pricing
    • Batch timing: settle daily, same day

    Why integrations matter

    As John explained, integrated POS + payments reduce manual entry, errors, and reconciliation headaches—all frequent causes of downgrades. Integrations also enable:

    • Level II/III data where applicable (extra savings on certain cards)
    • Text-to-pay and online invoices with tokenization
    • Inventory + CRM sync for personalized outreach (birthdays, anniversaries)
    • Next-day funding on card; low-cost ACH options with verification tools

    Start now

    Small, smart changes now can protect thousands in holiday profit. Start with an honest look at your effective rate, fix downgrade triggers, and get your systems ready before the rush.

    Watch the full webinar: How to Save Money on Credit Card Processing Fees During Peak Buying Season
    Get a complimentary rate review (no pitch, just clarity): Contact Jim Luff

  • Credit Card Processing Rates: What They Are and How to Lower Them

    Credit Card Processing Rates: What They Are and How to Lower Them

    Reading Time: 7 minutes

    Every time a customer makes a purchase with a credit card, a small slice of that sale is carved out in processing rates, typically 1.5% to 3.5%.

    Imagine selling a $100 item: your customer swipes, and behind the scenes, about $1.50 to $3.50 is divided among banks, networks, and processors before the rest reaches your business’s bank account. If your business does $100,000 a month in credit card transactions, it will cost your business about $1,500 to $3,500 in fees, on average.

    For small businesses, these seemingly small fees add up. In fact, U.S. merchants paid $224 billion in credit card processing fees alone in 2023, according to The Merchants Payments Coalition. That’s why understanding how these fees work—and how to reduce them—is critical to protecting your margins.

    As a leading credit card processor, Aurora Payments offers a transparent, low-cost pricing model designed to help businesses understand their credit card processing fees and learn how to keep more of what they earn.

    What Are Credit Card Processing Fees?

    Credit card processing fees—or processing rates—are the cost merchants pay to accept credit and debit card payments for goods and services.


    These fees are split among multiple players in the payment chain:

    • The card-issuing bank (like Citi, Chase, or Bank of America)
    • The card network (like Visa or Mastercard)
    • The payment processor (like Square, Stripe, or Aurora Payments)

    Rates typically range from 1.5% to 3.5% of each transaction, depending on the type of card used and method of payment.

    How Processing Rates Affect High-Risk Businesses

    For businesses in high-risk industries—such as CBD and firearms—processing rates usually skew higher. That’s because these sectors face elevated risks of fraud, chargebacks, or legal restrictions, which increase the cost of underwriting and compliance for processors. As a result, high-risk merchants may see rates closer to 4% to 6%, and they often have fewer processing partners to choose from.

    How Processing Rates Affect B2B Transactions

    Business-to-business (B2B) transactions often involve high-ticket payments, like invoices for equipment, materials, or services. These transactions are eligible for Level 2 or Level 3 processing, which allows for more detailed transaction data to be submitted (like invoice numbers, tax amounts, and shipping info).

    If this enhanced data is passed correctly, the interchange fees charged by card networks can be significantly reduced.

    How Processing Rates Affects Seasonal and Nonprofit Businesses

    Nonprofits and seasonal businesses often have irregular or low-volume payment activity, which makes flat monthly fees or high minimums costly.

    Many processors charge monthly minimums, PCI non-compliance fees, or other surcharges that can eat into limited revenue during off-seasons or donation lulls.

    Who Gets a Cut of Each Transaction?

    Every time your customer swipes, dips, or taps their card, the multiple entities in the payment chain take a slice of the sale. Here’s where that processing fee goes:

    Issuer Bank – Interchange Fee

    The card-issuing bank (like Citi, Chase, or Wells Fargo) earns the largest portion of the fee. This interchange fee compensates them for assuming credit risk, fraud protection, and handling the transaction.

    Card Network – Assessment Fee

    Networks like Visa, Mastercard, Discover, and American Express charge assessment fees for access to their infrastructure. These payment processing fees support the secure, global systems that allow card transactions to occur in seconds.

    Payment Processor – Markup or Service Fee

    Companies like Aurora Payments, Square, or Stripe charge a markup to manage transaction logistics, deposit funds into your merchant account, and offer tools like reporting, customer support, or POS integration.

    Payment Gateway (if separate) – Gateway Fee

    In online transactions, a payment gateway (like Authorize.net) securely transmits the customer’s payment information to the processor. Sometimes built into the processor’s platform, this may also be a separate fee if using a third-party gateway.

    Understanding who gets what helps demystify the true cost of accepting credit cards and gives you leverage when comparing providers.

    Types of Merchant Processing Fees You Might See

    Credit card fees go beyond the standard percentage cut per transaction. Here’s a breakdown of the most common fees you might encounter as a business owner:

    Interchange Fees

    The typical range for interchange fees is 1.15% to 3.25% + $0.10 per transaction.

    Paid to the issuing bank, these fees vary by:

    • Card type – A standard debit or credit card with no rewards programs will often have lower fees compared to a credit card with a generous rewards program.
    • Transaction method – A card that is swiped in person often has lower fees compared to a card manually entered for an online transaction.
    • Industry – High-risk industries will typically have higher fees than low-risk ones.

    Assessment Fees

    The typical range for assessment fees is 0.13% to 0.15% per transaction.

    These are paid to the card networks (such as Visa or Mastercard) and remain fairly consistent across most transactions.

    Processor Markup Fees

    Processor markup fees will vary based on your pricing model. Common options include:

    • Flat-rate pricing
    • Tiered pricing
    •  Interchange-plus

    We’ll explore these options more in depth below.

    Gateway Fees

    Gateway fees are usually $10–$25/month or a per-transaction charge (e.g., $0.05–$0.10)

    If your payment processor doesn’t include a gateway, you may pay separately for services like Authorize.net or NMI to handle secure online transactions.

    PCI Compliance Fees

    PCI compliance fees will run you about $75–$150 annually (or spread out across monthly installments).

    These fees are charged to cover costs of maintaining PCI DSS (Payment Card Industry Data Security Standard) compliance, which helps protect customer card data.

    Monthly Minimums

    Some providers require you to process a minimum volume (for example, $25–$50 in fees per month), or you’ll be

    Chargeback or Retrieval Fees

    Chargeback or retrieval fees can cost $15–$100 per occurrence.

    These processing rates are charged when a customer disputes a transaction. Some processors also charge for retrieval requests, even if the dispute is resolved in your favor.

    Statement or Account Fees

    These fees are monthly administrative or “junk” fees (usually $5–$15) for account maintenance or printed statements. These are often negotiable or avoidable with the right provider.

    Common Pricing Models Explained

    Credit card processing fees are structured in different ways depending on the payment provider. Here are the three most common pricing models you’ll encounter, along with their pros and cons.

    Flat-Rate Pricing

    Flat-rate pricing is typically offered by aggregators like Square and PayPal, companies that are not considered true credit card processors. An example of a common processing rate is 2.6% + $0.10 per transaction. This is the most expensive pricing structure and while it can be convenient for certain merchants, its processing rates can quickly affect profit margins in high-volume businesses.

    Pros and cons of the flat-rate pricing model:

    • Pros:
      • It’s easy to understand.
      • Costs are predictable.
      • It’s suitable for small or low-volume businesses.
    • Cons:
      • It’s often more expensive overall.
      • You may end up paying more than necessary for lower-cost transactions.

    Tiered Pricing

    Tiered pricing divides transactions into three categories based on card type and how the payment is processed.

    Transactions are categorized as:

    • Qualified — Debit or basic credit cards
    • Mid-Qualified — Cards that are entered manually and cards with some rewards, such as the Chase Sapphire Preferred® Card
    • Non-Qualified — Premium rewards or corporate cards, such as the American Express Platinum card

    In tiered pricing, interchange rates (the largest portion of credit card fees that go to the issuing bank) are the lowest for Qualified transactions and the highest for Non-qualified transactions. This structure also includes a percentage-based fee, but the fee is based on the type of card presented for payment and varies based upon the card. It’s less expensive than flat-rate pricing because you pay less for qualified transactions. As an example, a non-rewards Visa card might have an interchange rate of 1.56% and that’s what you would pay instead of flat-rate price of 2.6%.

    Pros and cons of the tiered pricing model:

    • Pros:
      • It can be more nuanced than flat-rate pricing.
      • It involves potentially lower credit card fees for qualified transactions.
    • Cons:
      • It can be hard to audit or predict.
      • It lacks transparency—you often don’t know which tier a transaction falls into until after the fact.

    Interchange-Plus Pricing (Aurora’s Model)

    This model charges you the actual interchange fee (set by the card networks) plus a fixed markup from the processor. For example, you might pay 1.80% + $0.10, depending on the card and how it’s used.

    Pros and cons of the interchange-plus pricing model:

    • Pros:
      • It’s transparent so you see exactly what goes to the bank and what goes to the processor.
      • It scales well with business growth.
      • It is typically the most cost-effective model.
    • Cons:
      • It’s slightly more complex to understand at first.
      • Your monthly statements may include more line items.

    We know that interchange rates vary based on card brand (Visa, Mastercard, etc.), card type (rewards vs. non-rewards), and method of entry (in-person vs. online). With the interchange-plus pricing structure, you always pay the true underlying rate plus a consistent, clearly defined markup that goes to the processor. You will enjoy the lowest interchange rate based upon the card presented to you with this pricing method and that makes it the best for merchants.

    Aurora Payments uses the interchange-plus pricing model, but also offers:

    • Cash discounting – lets you offset processing fees by offering a lower price to customers who pay with cash.
    • Dual pricing – displays both cash and card prices, giving customers a clear choice at checkout.
    • Surcharging – adds a small fee to credit card payments to help recoup processing costs.

    Consider Your Total Cost of Ownership (TCO) When Choosing a Pricing Model

    Credit card processing rates aren’t just a transactional expense—they directly impact your total cost of ownership over time. A seemingly small difference in credit card processing fees (say, 2.9% vs. 2.3%) can translate into thousands of dollars annually, especially for businesses with high sales volume. Hidden fees, inflated markups, and unnecessary equipment leases can quietly erode margins month after month. Choosing a transparent, cost-efficient pricing model—like interchange-plus—can significantly lower your long-term expenses and improve profitability without changing how you do business.

    How to Lower Your Credit Card Processing Rates

    Credit card processing fees can add up quickly. But with the right strategies, you can reduce what you pay without sacrificing service. Here are a few practical ways to lower your costs:

    • Choose interchange-plus pricing – This transparent model separates the true card network costs from your processor’s markup, so you know exactly where your money is going and can often save more in the long run.
    •  Negotiate processor markups or flat fees – Many payment processors have wiggle room in their pricing. Ask about lowering the per-transaction fee or monthly service charges, especially if your business has steady volume.
    • Avoid equipment leasing; buy instead – Leasing card terminals may sound convenient, but the long-term cost is often much higher. You could pay as much as five times the cost of a terminal if you lease. Purchasing equipment outright usually pays off after just a few months.
    • Ensure PCI compliance to avoid extra charges – Being PCI compliant helps protect your customers’ data and prevents costly non-compliance fees that can be tacked on monthly.
    • Monitor for junk fees or hidden line items – Watch for vague charges labeled as “regulatory fees,” “service add-ons,” or “batch fees” on your statement. They might be unnecessary or inflated.
    • Review monthly statements carefully — Take time to understand your monthly breakdown. If something looks off or unclear, ask your provider to explain or justify the charges.

    Small changes can lead to major savings, especially as your business scales. Aurora Payments helps merchants stay on top of processing rate costs with transparent pricing and proactive support.

    Email us at sales@risewithaurora.com.

  • What Is Cash Discounting? A Complete Guide for Business Owners

    What Is Cash Discounting? A Complete Guide for Business Owners

    Reading Time: 4 minutes

    If you’re accepting credit or digital payments, you’re likely paying processing fees that can eat into your profits. These fees can reach up to 4 percent per transaction. While card payments are convenient for customers, they come at a cost to your business.

    While going cash-only isn’t realistic for everyone, alternative pricing strategies like cash discounting offer a middle ground – allowing you to offset processing costs while still accommodating customer payment preferences.

    A deeper look at cash discounting

    What is cash discounting?

    Cash discounting is a pricing strategy where businesses offer customers a discount on the posted price of an item if they pay with cash instead of a credit or debit card. The mechanics are straightforward. Businesses pre-adjust their pricing to include credit card processing fees (typically 2-4% of the transaction value). 

    The psychology behind cash discounting is particularly compelling for consumers. The discount is perceived by customers as a benefit – essentially, a reward for paying with cash. And, studies show that getting a discount raises a person’s oxytocin levels, literally making them happier. 

    Real-world savings examples with cash discounting

    Here’s what different businesses can save by implementing cash discounting programs. 

    Business TypeMonthly ProcessingProcessing RateMonthly FeesCash Conversion RateMonthly SavingsAnnual Savings
    Restaurant$50,0002.8%$1,40040%~$560$6,720
    Retail Store$100,0002.5%$2,50030%~$750$9,000
    Plumbing Company$25,0003.2%$80050%~$400$4,800
    Gas Station$200,0002.2%$4,40060%~$2,640$31,680

    Cash Discounting vs. Other Pricing Strategies

    What is the difference between cash discounting and surcharging?

    A surcharge is when you post cash prices and charge an additional fee on top of that price for customers who pay with a card. Essentially, customers pay less than the listed price with cash discounting, and more than the listed price with surcharging. 

    What is the difference between cash discounting and convenience fees?

    A convenience fee is a form of surcharging where you charge a fee when your customers choose to pay in a non-standard payment channel or method, like online or over the phone. Convenience fees can be a flat fee or a percentage of the total amount, while cash discounts are usually percentage-based. 

    What is the difference between cash discounting and dual pricing?

    Dual pricing and cash discounting are often used interchangeably, but they differ in a key way. With dual pricing, both cash and credit prices are posted simultaneously, while cash discounting involves posting only the credit price with a discount applied at checkout for cash payments.

    Payment Strategy Comparison Chart

    FactorCash DiscountingSurchargingConvenience FeesDual Pricing
    Legal statusLegal in all 50 statesProhibited in CT, MA; restricted in othersLegal in all 50 statesLegal in all 50 states
    Price displayCredit price posted, discount at checkoutCash price posted, fee added for cardsBase price posted/fee for alternative channelsBoth prices displayed simultaneously
    Customer perceptionPositive Negative Neutral Transparent
    Business fitLocal businessesEstablished brandsAllThose with robust systems
    Transaction volume$10,000-$100,000/mo$50,000+/moAny$50,000+/mo
    Average ticket$15-$100$50+Any$25+
    Industry fitRestaurants, retail, services, healthcareProfessional services, B2B, luxury goodsUtilities, government, online servicesGas stations, automotive, large retail

    Regulatory considerations for cash discounting

    State-level regulations

    With few exceptions, states have largely remained uninvolved in regulating the practice of cash discounting. In California and Texas, merchants who offer a cash discount must apply for and hold a special license in order to remain compliant. In Wyoming, there is a 5% discount limit imposed on businesses. For all remaining states, it’s fair game.

    Industry-level regulations

    There are few industry-specific regulatory considerations for cash discounting. One example is within retail and e-commerce. Online implementation requires website disclosures and checkout flow modifications to clearly communicate pricing differences.

    In highly regulated industries such as healthcare, additional compliance considerations may apply, particularly regarding billing practices and insurance processing.

    Weighing the decision to implement cash discounting 

    There are a few factors to consider when it comes to whether or not a business should implement cash discounting.

    Do the math on ROI

    It’s important to analyze your current processing fees and transaction patterns. Cash programs are most effective for businesses with average transaction sizes above $25, as smaller transactions (under $10) make it difficult to justify program costs while still offering meaningful customer incentives.

    Assess customers

    Cash discounting is only successful if your customers adopt it at scale. Older customers and those in cash-heavy industries may be more receptive to cash discounting programs. If your customers strongly prefer paying by card, it may be too hard to gain traction.

    Budget implementation costs

    It will be easier for some types of businesses to implement cash discounting programs vs. others. For example, it’s a pretty heavy lift for restaurants and food service companies to update menus, menu boards, and POS systems to reflect changes to the pricing structure. Factoring these implementation costs into your ROI will keep your expectations realistic.

    Consider additional upsides

    Consider the practical side of how cash incentives would shake up your normal operations. One positive example of this is in healthcare. Because the accounting administrative burden is so high, healthcare providers often offer cash discounts to avoid the expenses of billing, mailing statements for unpaid amounts, processing partial payments, not collecting amounts owed, etc.

    Implementation best practices

    In-store implementation

    There are three key things you need to get right when setting up cash discounts in your store.First, you’re required to have specific signage at the store entrance and point of sale, mandated by federal and card network regulations. These signs must clearly state the cash discount percentage, conditions for the discount, and that posted prices are card prices. 

    Second, your POS system must include automatic cash discount features that apply discounts for cash payments, display both prices to customers, and generate compliant receipts showing the discount as a separate line item. Consider using a payment platform like ARISE that can accommodate cash discounting. The ARISE payment terminals can automatically handle the discount calculation at the point of sale.

    Third, all customer-facing materials including menus, price tags, digital displays, and marketing materials need to reflect new card prices. You’ll also need to plan for 2-4 hours of staff training, ensuring they mention the discount option early in customer interactions and frame it as a savings opportunity rather than a card penalty.

    Online implementation

    For those of you who sell online, you will need to implement clear pricing disclosures on product pages and update your terms of service. Most e-commerce platforms require custom development – anywhere from $2,000–$10,000 – or specialized plugins to handle dual pricing effectively.

    Checkout flows will also need to be modified to show payment method options with real-time price calculations while maintaining conversion rates. Enabling your system to process the transactions is only the beginning – you’ll also need to update FAQs, train live chat staff, and standardize responses for the increased volume of pricing questions during the first 30-60 days after implementation.

    When implemented correctly, cash discounting can be a powerful strategy to reduce payment processing costs – potentially saving thousands of dollars each year.  

  • Level 2 and Level 3 Payment Processing: A Simple Guide to Lowering Interchange Fees

    Level 2 and Level 3 Payment Processing: A Simple Guide to Lowering Interchange Fees

    Reading Time: 4 minutes

    The digital payment environment is increasingly complex. Today, merchants and service providers must accommodate a growing number of payment methods and platforms, as well as navigate PCI DSS compliance amid the fraud risks that come with them.

    There’s also a complicated “cost of doing business” – made up of interchange fees, assessment fees, and processor markup. According to NerdWallet, they can add up to 1.5-3.5% of a transaction’s value. Overwhelmingly, 70-90% of that comes from interchange fees. Today we’re breaking them down to help merchants uncover any potential savings opportunities.

    What are interchange fees?

    Let’s start with a quick definition. An interchange fee is what a merchant’s bank pays to a customer’s card-issuing bank each time a credit or debit card transaction is processed. It essentially serves as compensation for the issuing bank for the risk and cost of providing credit to the cardholder. These costs are passed through to merchants by their banks as part of their overall processing costs.

    This fee is not a specific dollar amount, but rather a percentage of the total value of the transaction. That percentage varies by processing level. Each transaction is processed at one of three levels.

    Level 1 processing

    Level 1 processing applies to most business-to-consumer (B2C) transactions, using personal credit cards – think retail store and restaurant purchases. This level requires businesses to share only a few basic details when processing the card. It has the highest interchange fees. 

    Level 2 processing

    Level 2 processing applies to business-to-business (B2B) and business-to-government (B2G) transactions. This level requires more data to be collected, lowering the risk that the issuing bank is taking on, like costly chargebacks. Due to this, the interchange rate is reduced by up to .5% when compared to Level 1.

    Level 3 processing

    Level 3 processing applies to the higher value and volume of transactions by large B2B and B2G companies. Level 3 processing has much more complicated data requirements (more on that later), but it offers the deepest interchange discounts – often 1% below Level 1 rates.

    What do these interchange fees look like on paper? Let’s take a B2B manufacturing company processing $2 million annually, as an example. Here are the annual cost estimates at each processing level: 

    • Level 1 (~2.75% interchange rate + $0.30 per transaction): $55,000 + transaction fees
    • Level 2 (~2.25% interchange rate + $0.25 per transaction): $45,000 + transaction fees
    • Level 3 (~1.85% interchange rate + $0.20 per transaction): $37,000 + transaction fees

    Qualifying for Level 2 and 3 payment processing

    On paper, it would appear that all merchants and services providers should try to benefit from the cost savings of Level 2 or 3 payment processing. However, businesses must meet certain criteria in order to qualify for a higher processing level. The biggest factors include customer base, transaction value, commercial card percentage of transactions, and system capabilities for data capture.

    Qualification Assessment Chart

    CriteriaLevel 1Level 2Level 3
    Customer BasePure B2CMixed B2B/B2CB2B/B2G
    Transaction Value~$25-$75~$75-$250~$250+
    Commercial Card %Less than 20%20-60%60% or more
    System CapabilityManualSemi-automatedFully automated

    A deeper dive on the critical element of data capture

    Even qualifying businesses can struggle to meet Level 3 data capture requirements. Doing so effectively depends on how advanced their ERP system is and whether they’re actually using all of its features and functionality. Companies without fully automated processes will need to invest additional time, money, and training to capture the detailed transaction data that Level 3 processing requires. 

    It’s important to consider these costs when determining if the ROI is high enough to outweigh the operational and technical costs. That’s why many businesses choose to start with Level 2 processing, given the significant lift required for Level 3.

    Data Requirements by Payment Processing Level

    Data FieldLevel 1Level 2 Level 3 ERP Source
    Card Number✅✅✅Payment processing
    Expiration Date✅✅✅Payment processing
    Transaction Amount✅✅✅Order total
    Merchant ID✅✅✅Payment gateway
    Tax Amount❌✅✅Tax calculation module
    Customer Postal Code❌✅✅Customer master file
    Purchase Order #❌✅✅Order management
    Line Item Details❌❌✅Product catalog/inventory
    Product Codes/SKUs❌❌✅Item master file
    Unit of Measure❌❌✅Inventory management
    Freight/Shipping❌❌✅Order processing
    Discount Amounts❌❌✅Pricing engine

    Considerations for advancing payment processing levels

    Advancing to Level 2 or 3 payment processing can bring significant cost savings from reduced interchange fees – if you have the back end systems and processes to support it. But there are additional benefits, too.

    • More secure transactions from the additional work in validating customer data
    • Streamlined processes through stronger integration with internal procurement and accounting systems
    • Ability to meet compliance requirements for government and corporate purchases
    • Enhanced dispute resolution from better documentation 
    • Improved customer service with more data available to troubleshoot client issues
    • More complete data allows for deeper customer and operational insights to make better business decisions

    Achieving (and maintaining, without penalty) a higher level of payment processing for your transactions takes work. Here are five next steps when evaluating if moving to level 2 or 3 processing is the right move.

    1. Assess card mix. Look at a minimum of three months of transaction data to identify commercial card volume and average ticket sizes.
    2. Audit systems. Inventory what Level 2 and 3 data your current systems capture and identify gaps. Consider the cost/benefits of switching to a platform like ARISE that can provide enhanced security features that support Level 2 and 3 processing.
    3. Start with Level 2. If you’re not capturing enhanced data yet, implement Level 2 requirements first. This will help you start realizing immediate savings while you further prepare your processes and operations for Level 3 processing.
    4. Plan out integration efforts. Work with your payment processor and gateway to map out field requirements and testing procedures.
    5. Continuously optimize. Track qualification rates monthly and address any data issues that prevent transactions from qualifying. In 2024 Visa introduced new penalty rates for incomplete data, stricter validation of product category codes, and enhanced fraud monitoring. These changes make data accuracy and security critical.

    Level 2 and Level 3 processing often require significant system changes and a whole new approach to ongoing data management. However, it can be worth it, as long as businesses are well informed, prepared, and have clear expectations for ROI.