A very popular term today in the processing space is Cash Discount Processing. Today, we want to explain what it is and its advantages and disadvantages.

First – we often are asked if Cash Discount Processing is legal. Cash Discount programs are legal in all 50 states per the Durbin Amendment. Part of the Dodd-Frank Law which was created in 2010, this law permitted businesses to offer a discount to customers as an incentive for paying with cash.

This same type of program has existed for many years at gas stations. If you go inside and pay with cash, you receive a discount. This is a very interesting point, as not many people take advantage of the discount and pay at the pump. They also don’t complain about paying the higher fee. This was established to enable merchants to offset the credit card processing fees that they incur.

Over the years with all the rewards that credit card companies offer, they have increased the number of fees businesses have to pay to accept card payments. Essentially, the business owners are paying for the rewards. Business owners have a choice to make, either include the fees in their price or give the customer an advantage of paying with cash.

So, let’s talk about the benefits and issues of Cash Discount Processing.


  • Reduced Fees
    The largest benefit is eliminating or reducing credit card processing fees.
  • Encourages More Cash Payments
    People prefer to pay with credit cards but these programs do incentivize them to use cash.
  • Discount
    You are able to offer a discount to pay with cash. Consumers love a discount.


  • Card Spend
    Consumers spend more when paying by card.
  • Angry Customers
    Some customers feel like they should not have to pay more just because they are paying with their card.

Implementing a program like this may bring some challenges. However, it will be more successful if you follow the rules.

At Proudly, it is our job to make sure that happens. We will also walk you through the good, the bad, and whether or not this makes sense for your business. We’re not saying this is good for all businesses because it’s not.

We have been in this industry for over 25 years and with our experience, we can help take you down the proper path, save you money on your processing, and offer a level of service you’ve never had in our business.

We look forward to working with you and helping your business!