GoChyp’s ‘Free’ Payment Processing Isn’t Free
GoChyp markets “zero cost” credit card processing to business owners that promises to eliminate credit card processing fees altogether. But the math behind this no-fee pitch tells a different story. Rather than absorbing transaction costs, GoChyp shifts the burden directly onto consumers by adding a surcharge at checkout, typically around 3% to 4%. While this tactic may reduce overhead for small businesses, it comes with a cost that’s often harder to quantify: customer satisfaction and long-term loyalty.
Customer Loyalty Impact
The model is known in the industry as “cash discounting” or “dual pricing,” and GoChyp is far from alone in offering it. But what sets this approach apart is how it reframes a fee avoidance strategy as a business enhancement. For first-time customers, a small surprise fee at the register may be tolerable. For returning ones, it can erode goodwill. Studies have long shown that added friction at the point of sale, particularly unanticipated fees at checkout, can impact a shopper’s perception of fairness and value, leading to reduced repeat visits and negative word of mouth. For service businesses where trust and client retention are paramount, the impact can be even more pronounced.
Compliance
Complicating matters is the legal patchwork governing surcharges. While the practice is federally legal in the U.S., individual states impose a range of restrictions, with some outright prohibiting surcharges on credit transactions. As of this writing, states like Connecticut and Massachusetts maintain bans, while others have intricate disclosure requirements or enforcement gray zones. Yet GoChyp’s promotional materials often gloss over these legal nuances, leaving compliance obligations, and the liability for violation, squarely on the shoulders of the business owner.
Undisclosed Liabilities
That’s where the risk lies. Business owners who unknowingly implement surcharging in non-compliant ways could face fines, legal disputes, or even class action litigation. And because GoChyp positions itself as merely the facilitator, merchants are left to navigate these complexities alone. For a business owner focused on day-to-day operations, the promise of “free” processing can quickly turn into a regulatory minefield.
Generally speaking, we advise that most businesses avoind cash discounting and payment card surcharging and instead choose highly rated payment processors that offer fair and transparent fees.
