How to Avoid Increasing Credit Card Processing Fees: Tips for Small Businesses

Inflation and spiraling utility costs have been devouring your profits like a pack of wolves in recent years. Now, in 2026, credit card companies are after a larger piece of the pie, too.

As a small business owner, you have literal mouths to feed. That's getting harder, with everyone else taking bigger and bigger bites. Still, your loyal customers have families and bills, too, and you don't feel right about overcharging them the same way you're getting gouged. But that isn't your only option - the finance experts at Better Payment Solutions explain ways to encourage payment methods that don't incur fees.

Fees In Flux

Historically, processing fees typically cost merchants 3-4% for each credit card transaction. That translates to 30-40 cents on a $10 purchase; $3-$4 on a $100, and $30-40 on a $1,000 purchase. However, this norm is in flux for 2026.

Visa raised its fees in January; some by as much as 33 percent, according to data recently published in the Payments Dive newsletter. Square also raised its per-transaction fees by a few tenths of a percent the same month. Others are expected to quietly follow suit.

Cash Versus Credit

These fee hikes are creating challenges for small businesses that need to cut costs but are reluctant to sneak these price increases by to their customers. Some companies are turning to "zero-fee" processing systems. A slight misnomer, these setups encourage cash use while transparently disclosing the surcharge customers will pay if they use a credit card. In short, the customer can opt to pay the fee; the business pays nothing.

More aptly named a "cash discount" model, these "zero fee" programs usually offer customers a price reduction when they pay with cash. This approach transfers processing costs away from the business while providing buyers with a savings incentive. Small businesses using this system save an average of $7,500 annually, with some operations reporting savings up to $100,000 per year.

Systems like these can be integrated across multiple business environments, including physical storefronts, online platforms, or hybrid models. The work can be done without disrupting existing operations, fitting into existing payment setups while supporting contactless payments and online checkouts

Time For A Change?

Not sure if the zero-fee model is right for you? You're a good candidate if:

• You run a cafe, restaurant, or other business that runs on slim margins
• Your operation is largely B2B or has recurring clients with predictable, consistent, and large-volume transactions
• Your business handles high-ticket services like landscaping, auto repair, HVAC, legal or accounting services, or other contractors, where a fee of 4+ percent significantly cuts into profits

While some may appreciate knowing how much of a fee they're absorbing, you will probably lose some customers over this policy. Some may switch to competitors where they aren't "charged a fee," even though, in reality, it's baked into the price of their product.

When it comes to small business success, it's all about the customer. So to avoid turning off customers, it's best to highlight the cash discount aspects rather than the fee. Clear, transparent signage is recommended. Some highly successful businesses offer monthly raffles, punch cards, or other incentives for individuals who pay with cash. After all, when your customers win, you win.

Northern Media Services
City: Oswego
Address: 274 Cemetery Rd
Website: https://www.northernmediaservices.com/