How Free Payment Processing Works

A comprehensive guide on the popular dual-pricing technology that small businesses are rapidly adopting in order to completely eliminate their credit card processing fees:

“A free POS that also comes with free payment processing? You’re joking, right? How is that even possible?”

Yes, it’s true, yes it’s possible. And yes, how it’s done makes complete sense once you understand a couple of key features of the technology.

In this article we’ll explore:

How small businesses are receiving a free POS system that includes free payment processing to completely eliminate their credit card processing fees
How payment processing actually works- what businesses are involved in the transaction and how the processing fees are shared among them
What the dual pricing model is, and how the technology works in order to provide no-fee credit and debit card transactions for businesses
Why it’s a no-brainer for businesses to adopt this pricing model

Here's how we can offer a free point-of-sale system that also comes with completely free credit card processing:

If you drive an automobile, I’m sure you’ve visited a gas station before where they offer a cash price and a card price. Gas stations have been using this exact pricing model for half a century!

But how does it actually work? Visa and Mastercard don’t work for free, do they? Merchant services and payment processing companies aren’t charities, are they? Well, there’s a simple pricing model that answers these questions. And it’s taking the country by storm! More and more small businesses are using it.

You are starting to see a lot of local businesses adopt this pricing technology. Your local convenience store, liquor store, pizza shop and other small businesses are now using what’s called the dual-pricing model. What does it look like? When a customer gets to the cash register, they see two prices. There’s the card price and a cash-discount price which is a little less, if paying with cash.

The card companies (Visa, Mastercard, American Express, etc.) and payment processor still get their transaction fees for card transactions. Afterall, they’re providing a valuable service to businesses and customers.

Also, simple compliance mechanisms are put in place. This ensures that businesses can legally charge two different prices. The card network companies have their own rules and so do states. Dual pricing stays within these guidelines with virtually no extra work on the business owner’s part. (It’s usually just placing a sticker by the cash register.)

Dual Pricing Technology And Free Payment Processing Is Taking The Small Business World By Storm, Here's How It Works

To understand how dual-pricing and no-fee payment processing works, you need to have a basic understanding of how the payment processing process actually works. There are three main components:

You have the POS system (point of sale) which is the actual credit card terminal or computer software that accepts the customer’s credit or debit card. This is also referred to as the payment gateway.
You have the card network companies: These are the Visas, the Mastercards and other main card companies that your bank credit or debit cards have their logo on. These are the card networks that the transactions run on.
And finally, you have the payment processor. The payment processor is the company that accesses the card networks to check the customers’ account balance at the issuing bank to see if they have enough money to complete the purchase. Then, after receiving an approval, it sends a code back to the POS approving the transaction for the customer. It also takes the financial risk of sending those funds to the merchant’s bank account before the transaction is actually settled a couple days later.

Think of it like this: A customer has money in their bank. They need to get some of that money to the bank of the merchant in order to receive the merchant’s product or service…

So if we were to use an analogy of a package being delivered by car it would look like this:

The package inside the car is the money for the product or service being driven from the customer’s bank to the merchant’s bank. The roads and highways that the car travels on to get there are the card company networks, (Visa, Mastercard). And the person driving the car and ensuring the package’s safe delivery is the payment processor.

But Where Do The Payment Processing Fees Go? Exactly Who Gets Them?

All three of these components, the point of sale, the card networks and the payment processor work together to make seamless transactions. But there’s another factor to mention in regard to transaction fees: the customer’s issuing bank.

Their bank, the one that issues them the credit or debit card they’re using actually takes the lion’s share of the entire transaction processing fee. The card networks and the payment processor only take a tiny portion.

The average credit card processing fee that businesses have to pay is usually around 3% on average. Payment processing companies package it differently with various structures like flat rates, per item charges, percentage points, etc. But it usually ends up costing the merchant around 2-4% of the transaction total.

Usually, the issuing bank takes around 2/3 to 3/4 of the total transaction fee. Of the remaining portion, the payment processing company takes around 2/3 to 3/4 and the card network company takes the smallest fraction.

The issuing banks use this huge money source to fund their incentive programs such as frequent flier miles and cash-back rewards. So ultimately, the vast majority of people using their debit card at a business aren’t even receiving any benefits that are being funded by the business! Funding the free incentives for a very small percentage of people who actually have these reward program cards are being paid for BY YOUR BUSINESS!

Why should your business fund a free vacation for a tiny percentage of your customers who happen to own a rewards card?

How We Eliminate Your Payment Processing Fees With Dual-Pricing Technology

Ultimately, the cost of running a business is covered by the revenue collected from customers. From the lease on the building, the power bill, the internet, employee payroll, business insurance…all of it.

All of these business expenses should be factored into the profit equation and ultimately covered by the incoming revenue brought in by customers.

With dual-pricing technology, no longer do businesses have to force their card-using customers to fund free incentive programs by big banks. And businesses no longer have to eat the 3% transaction fees. Customers can pay the card price, or choose to pay with cash for a slightly lower price.

With dual-pricing technology, the customers who wish to use the convenience of their card and participate in the payment processing ecosystem, can do so and cover the fees associated with it. After all, the customers ultimately are the main ones benefiting from the transaction fees that are normally passed on to the business!

If they don’t want to participate in the payment processing ecosystem, they can pay with cash.

Either way, the business now keeps ALL of its money, for EVERY transaction. No more selling a $100 item and only getting $97 deposited in the business account!

How We Can Provide A Free POS System And Free Payment Processing For A Business

As the payment processor, we collect a fee only when cards are used. We make sure the issuing bank gets its share and the card networks get their share. What’s left is our revenue. We use it to:

Give your business a free Payanywhere POS system of your choice. (From a simple credit card terminal to a more complex system required by some restaurants and retail shops.) It’s shipped out and arrives in just two days after you’re merchant account is approved! *Your existing payment terminal can usually be used if you don’t want the free upgrade.
We include 24/7 phone support for the setup of your free point of sale equipment, for the ongoing use of it and for learning more of the advanced features in the future. Whatever you need, just call our expert tech support team 24/7!
Give your business access to the Paymentshub software suite where you can access your transactions online, see payments, do billing and invoicing, create reports, integrate with accounting software and much more!
Allow your new free POS system and payment gateway to seamlessly integrate with Quickbooks and other accounting software.
Provide ongoing service, tech support and maintenance for your all-in-one payment processing solution.
And of course, cover our operating expenses and pay our employees.

Our Onboarding Process For The Free POS System And No-Fee Payment Processing

The process is simple and easy. You’ll be assigned a dedicated account manager to work with you every step of the way. Here’s the basic process:

Step 1: Fill out the Merchant Service Request Form on the Free POS System page. This will initiate the process and assign an onboarding agent to you. (You’ll receive their contact information after submitting the form.)

Step 2: Speak with your onboarding agent to fill out the actual Merchant Application. They will help determine which free POS system is best for your business. (Or if you insist on keeping your existing point of sale system). And they’ll walk you through the Merchant Application and help you submit it.

Step 3: Get approved! Most small businesses are approved within 24 hours and the free point of sale terminal is immediately shipped out to your business. Some larger or more complex businesses take a little longer for approval if more information is needed.

Step 4: Receive your free point of sale system, plug it in and call our 24/7 tech support to get it set up and running! And that’s it!

We can get most businesses set up, running and have all of their payment processing fees completely eliminated within one week!