Card processing glossary.
Short answer: The words you’ll hear when you take cards, in plain English: from cash discount and surcharge to interchange and chargebacks.
- Cash discount
- Pricing where every tag shows a cash price and a higher card price before the customer pays. Cash buyers get the lower price; card buyers pay the posted card price.
- Cash discount program
- A card processing setup built around a cash discount: tags or menus with both prices, signs, and a terminal programmed to charge the posted card price.
- Dual pricing
- Another name some processors use for a cash discount with both prices posted.
- Two-tier pricing
- New York’s legal term (GBL §518) for posting a cash price and a credit card price.
- Surcharge
- A fee added to card payments, usually at the register. Capped by card networks, never allowed on debit, banned in some states.
- Non-cash adjustment
- A card fee added at the register under another name. Card networks and New York treat it as a surcharge.
- Interchange
- The fee the card-issuing bank charges on each card sale. Most of what you pay to take cards.
- Merchant discount rate
- The total percentage a business pays to accept cards, including interchange and processor fees.
- Chargeback
- When a customer disputes a card sale and the bank takes the money back while it’s reviewed. Usually carries a fee.
- Merchant account
- The account that lets a business accept card payments and receive the deposits.
- Point of sale (POS)
- The register or system where you ring up sales. Some, like Toast and Square, only work with their own payments.
- Terminal
- The card machine customers tap, insert or swipe their card on.
General information, not legal advice. Rules change and differ by state and city; check the rules where your business is. See our terms and disclaimers.