NOTE FROM FOXY: We get a lot of questions from our users about passing credit card processing fees along to the customer, and when it comes up, we always recommend connecting with CardX. So we asked them to contribute to our blog with some more info about their solution.

Note also that, if you’re a US merchant, you might be surprised to learn that interchange fees in other countries are generally lower and radically simplified. We hope this post is interesting and informative for you. Yes, it’s salesy, but it’s a slick solution, and we’d be happy to introduce you to our friends at CardX. Just reach out and we’ll make it happen.

Price Pressure: Rising Interchange and its Impact on Businesses

For years, price has been one of the top pain points for businesses choosing a payments provider. 

Despite increasing economies of scale, and decreases in interchange in other countries, the cost of card acceptance continues to rise for businesses in the US: from 2012 to 2018, the total interchange fees levied by Visa and Mastercard in the US went up by a shocking 77%.

New rules, however, have changed the payments landscape by finally providing businesses an option they had been clamoring for since the introduction of credit cards: the choice to pass on credit card fees to customers who choose those cards for convenience or rewards.

New Rules for Payments: Credit Card Surcharging

In 2013, facing antitrust pressure, the card brands introduced new rules allowing businesses to pass on credit card fees to their customers. 

While passing on the cost of payment acceptance to cardholders had long been the norm for government and educational institutions, surcharging was new model for businesses and came with an extensive set of rules from the card brands. These rules require, among other things, that:

  • businesses that pass on their fees must be registered with the card brands;
  • businesses must disclose the credit card fee prior to completion of the transaction;
  • businesses must not charge a fee to a debit card, but rather only to credit cards;
  • businesses must not charge a fee greater than what they pay to accept the card (i.e., businesses cannot profit from the fee);

It was widely recognized that the card brands introduced these rules to ensure a customer-friendly experience for payers using cards, but in doing so created significant compliance overhead for businesses. It’s difficult to understand how these rules could serve as a checklist for businesses to complete; rather, many within the industry understood that widespread adoption of credit card surcharging would require technology solutions that automate compliance with the card brand rules.

CardX and Foxy: An Integrated Solution for Surcharging

Foxy has partnered with CardX, the leader in turnkey solutions for credit card surcharging, to bring its businesses a seamless experience for accepting credit card payments at a true 0% cost. 

With CardX, Foxy’s users can use an integrated payment page that provides the disclosure language required by the card brands and automatically distinguishes between credit and debit—in real-time and prior to authorization—to ensure that fees are only assessed to credit card transactions. 

This is a great opportunity for businesses: they can accept credit cards at a true 0% cost while paying only for the low cost of debit card acceptance. This ensures that the business can reduce its costs while keeping debit as a “no-fee” option so that they don’t have to turn away customers unwilling to pay the fees associated with the use of a credit.

Foxy and CardX have worked together to save businesses thousands of dollars on credit card transactions, and Foxy continues to work with CardX to provide business solutions that meet their requirements for 0% cost credit card acceptance. 

If your business is interested in accepting credit cards at 0% cost, reach out to learn more about our hosted payment page experience or explore other integration options.