Using Surcharging for Free Instant Payments
What is Using Surcharging for Free Instant Payments
Real-Time Payments is an exciting new service brought about by the Faster Payments Initiative of the FedNow ™ US Federal Reserve providing payments that are instant, final and secure. FedNow, Free Instant Payments and Real-Time instant payments, are defined simply as: Irrevocably collected funds in a bank account and usable immediately by the owner of the account. Our "Good Funds" payment gateway allows for instant real-time digital payments that are immediate, irrevocable, intra-bank and/or interbank account-to-account (A2A) transfers that utilize a real-time and text messaging system connected to every transaction participant through all U.S.-based financial institutions.
FedNow is a real-time payment service developed by the Federal Reserve, aimed at enabling instant payment and settlement for businesses and individuals in the United States. This service can provide a significant advantage for companies looking to enhance their payment processes. By integrating FedNow with strategies like surcharge and cash discounting, businesses can further streamline their financial operations.
Understanding FedNow
FedNow allows for instant payment processing, operating 24/7, 365 days a year. This service provides immediate access to funds, which can be crucial for cash flow management. It aims to support various use cases, from business-to-business (B2B) payments to customer-to-business (C2B) transactions, facilitating quicker and more efficient financial operations.
Surcharge and Cash Discounting
Surcharge and cash discounting are two different pricing strategies used by businesses to manage payment processing costs.
- Surcharge: This involves adding a fee to the total cost when a customer chooses to pay with a credit card. The goal is to offset the processing fees charged by credit card companies.
- Cash Discounting: This strategy provides a discount to customers who pay with cash or equivalent methods, such as direct bank transfers. The discount incentivizes customers to choose payment methods that have lower processing costs for the business.
Implementing Surcharge and Cash Discounting with FedNow
Businesses can leverage FedNow to provide free or discounted instant payments by integrating these strategies:
- Encouraging FedNow Payments through Discounts:
- Promote Instant Payments: Offer discounts to customers who opt to pay using FedNow. Since FedNow transactions are instant and carry lower processing costs compared to credit card payments, this can be a compelling incentive.
- Cash Discounting: Frame the FedNow payment method as part of your cash discount program, emphasizing the savings customers receive by avoiding credit card fees.
- Implementing Surcharges for Credit Card Payments:
- Transparent Surcharging: Clearly communicate to customers that credit card payments will incur an additional surcharge to cover the processing fees. This transparency can encourage customers to switch to FedNow payments to avoid extra costs.
- Regulatory Compliance: Ensure that your surcharging practices comply with state and federal regulations. Some states have specific rules about surcharges, so it's essential to stay informed and compliant.
Benefits for Businesses
- Cost Savings: Reduce or eliminate credit card processing fees by encouraging FedNow payments through cash discounts.
- Improved Cash Flow: Instant access to funds through FedNow can improve liquidity and financial planning.
- Enhanced Customer Experience: Offering immediate payment options and transparent pricing strategies can enhance customer satisfaction.
Practical Steps for Integration
- Setup with Financial Institution: Work with your bank to set up FedNow for your business. Ensure that your payment systems are compatible and that staff are trained on the new processes.
- Update POS Systems: Make sure your point-of-sale (POS) systems can handle instant payments via FedNow and apply discounts or surcharges appropriately.
- Customer Communication: Clearly communicate the benefits of using FedNow to your customers, including any discounts they can receive. Use signage, receipts, and digital communication to keep customers informed.
- Monitor and Adjust: Regularly review the effectiveness of your surcharging and cash discounting strategies. Be prepared to make adjustments based on customer feedback and changing regulations.
Example Scenario
A retail store can offer a 2% discount for customers who pay using FedNow instead of a credit card. This discount offsets the typical 2-3% credit card processing fee the business would incur. At the same time, the store can add a 2% surcharge on credit card payments, encouraging more customers to use FedNow for the cost benefits.
Conclusion
Integrating FedNow with surcharge and cash discounting strategies offers a powerful way for businesses to optimize payment processing costs and enhance financial operations. By promoting instant payments through FedNow and managing the costs associated with credit card payments, businesses can improve their cash flow and provide better service to their customers.
Features & Benefits
FedNow instant payments has benefits for all parties involved in
Financial Transactions.
Benefits to your company include:
Money Transfer: Current limit of $500,000.
It's Final: All RTP and Instant Payments are Final & Irrevocable.
It's Fast: 24/7/365 access to funds anytime vs.
several days for paper checks or ACH transfers to process.
Request for Payments ( RfP ™): Mobile & Online Real-Time Bill Payments.
Software Integration: Integrate your A/R & A/P Management
or Enterprise software with us.
Message Detail: Full 145 characters available
using ISO 20022 messaging XML format.
Online Down Payments: Don't use inconvenient
and expensive Wires & Cashier's Checks.
Online Real-Time Reporting: Configured
Dashboard with Virtual Terminal login.
Reduced calls / emails in the "Purchasing Chain": All
parties to a instant payment transaction receive immediately
text & email messaging.
The
FedNow and RTP Systems enables Participants to initiate credit transfers,
receive final and irrevocable settlement for credit transfers,
and make available to Receivers funds associated with such
credit transfers in real-time, twenty-four (24) hours a day,
seven (7) days a week, fifty-two (52) weeks a year. All instant payments are "Credit
Push" instead of "Debit Pull."
Creation Request for Payment Bank File
Call us, the .csv and or .xml FedNow or Request for Payment (RfP) file you need while on your 1st phone call! Our system will Validate your upload data payment files. We guarantee our reports work to your Bank and Credit Union. We were years ahead of competitors recognizing the benefits of RequestForPayment.com. We are not a Bank. Our function as a role as an "Accounting System" in Open Banking with Real-Time Payments to work with Billers to create the Request for Payment to upload the Biller's Bank online platform. U.S. Companies need help to learn the RfP message delivering their bank. Today Payments' ISO 20022 Payment Initiation (PAIN .013) shows how to implement Create Real-Time Payments Request for Payment File up front delivering a message from the Creditor (Payee) to it's bank. Most banks (FIs) will deliver the message Import and Batch files for their company depositors for both FedNow and Real-Time Payments (RtP). Once uploaded correctly, the Creditor's (Payee's) bank continues through a "Payment Hub", will be the RtP Hub will be The Clearing House, with messaging to the Debtor's (Payer's) bank.
... easily create Real-Time Payments RfP files. No risk. Test with your bank and delete "test" files before APPROVAL on your Bank's Online Payments Platform.
Today Payments is a leader in the evolution of immediate payments. We were years ahead of competitors recognizing the benefits of Same-Day ACH
and Real-Time Payments funding. Our business clients receive faster
availability of funds on deposited items and instant notification of
items presented for deposit all based on real-time activity.
Dedicated to providing superior customer service and
industry-leading technology.
1) Free ISO 20022 Request for Payment File Formats, for FedNow and Real-Time Payments (The Clearing House) .pdf for you manually create "Mandatory" (Mandatory .csv or .xml data for completed ISO 20022 file) fields, start at page 4, with "yellow" highlighting. $0.0 + No Support
2) We create .csv or .xml formatting files using your Bank or Credit Union. Using your invoice information database to create an existing Accounts Receivable file, we CLEAN, FORMAT to FEDNOW or Real-Time Payments into CSV or XML. Create Multiple Templates. You can upload or "key data" into our software for File Creation of "Mandatory" general file. Use either the Routing Number and Account Number for your Customers or use "Alias" name via Mobile Cell Phone and / or Email address.
Fees = $57 monthly, including Activation, Support Fees and Batch Fee, Monthly Fee, User Fee. We add your URI for each separate Payer transaction for additional Payment Methods on "Hosted Payment Page" (Request for file with an HTML link per transaction to "Hosted Payment Page" with ancillary payment methods of FedNow, RTP, ACH, Cards and many more!) + $.03 per Transaction + 1% percentage on gross dollar file,
3) Add integrating QuickBooks Online "QBO" using FedNow Real-time Payment using our Free Instant Payments system.
Fees Above 2) plus $29 monthly additional QuickBooks Online "QBO" formatting, and "Hosted Payment Page" and WYSIWYG
4) Above 3) plus Create "Total" (over 600 Mandatory, Conditional & Optional fields of all ISO 20022 Pain .013) Price on quote.
Each day, thousands of businesses around the country are turning their transactions into profit with real-time payment solutions like ours.
Contact Us for Real-time Payments processing
