Zero Fee Processing Definition

Merchant Account Zero Fee Processing Explained

What is zero fee processing? Zero fee processing (often confused with a “cash discount” program) is a pricing plan that adds a fixed surcharge to any transaction that a customer pays for with a credit card. Also called “reverse fee processing” or “free processing,” zero fee processing uses the revenue generated by these surcharges to offset the transaction fees that merchants owe for accepting electronic payments. This has the ultimate effect of passing the cost of payment processing to consumers rather than merchants.

Zero fee processing is subject to certain restrictions due to unresolved legal issues between retailers and the major card brands. Specifically, under a zero fee processing plan, surcharges cannot be added to debit cards, cannot exceed 4%, must be announced via proper signage at least 30 days in advance, and are outright illegal in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and Puerto Rico.

Zero fee processing is often confused with cash discount programs, and sometimes the two terms are used interchangeably. However, there is a key difference between credit card surcharge programs and cash discount programs. The surcharges added under a zero fee processing program only apply to credit card transactions, while the surcharges under a cash discount program apply to all non-cash transactions. Furthermore, cash discounts have been permitted by Visa and MasterCard for more than a decade and are completely legal as long as merchants provide adequate disclosure of the surcharge and apply it to the proper transaction types. Zero fee processing, on the other hand, comes with additional restrictions that have been outlined above.

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Why I'm Qualified to Write About Credit Card Processing and Merchant Account Services

I'm a former credit card processing sales director who left the industry because I didn't like how it takes advantage of small business owners. It feeds like a leech on businesses and thrives by imposing fees that are nearly impossible to comprehend. Seeing a need for change, I left and built this website help business owners better understand the industry, research merchant services providers, and get refunds of excessive merchant account fees. My experience of working "behind the curtain" in the industry, and using that knowledge for good, has resulted in millions of dollars returned to hard-working small business owners as well as enterprise-level companies.

From the time that I starting working in the merchant services industry to when I left to create this website, I've been on the pulse of payments for nearly 15 years. It didn't seem fair to keep this "insider" knowledge to myself. To lift the fog, I've reviewed hundreds of companies, read thousands of user reviews, and learned the pricing tricks of every provider. If you have questions about credit card processing, you can find the answers on this website.

How I Can Help You

I specialize in helping businesses get refunds of excessive fees and have recovered $1,567,184 this year alone! Submit a recent statement below to find out if you are getting overcharged. I'll take a look at it for free. If I find fees that can be refunded, hire me on contigency. I only get compensated if I put money back into your pocket.

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2 Reviews Leave Your Review Below

  1. Heartland is a major rip-off. Recent rates were 5%, 6%, & 8%!!!

    1. Brian Clark says:


      You may find this article helpful: Cheapest Merchant Accounts.


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