Card processing fees take a slice of every membership payment, and ACH bank payments usually cost less. A small discount for paying by bank can shift members over, but run the math first, and check the rules before you add any fee for paying by card.
Find out what cards cost you now
Pull the last three months of processing fees from your membership platform or payment processor, then divide by the membership revenue that came in by card. That's your effective card rate. Do the same for ACH.
If your deposits arrive with fees already taken out, your books may not show the fees at all unless someone records them. This post explains why deposits come in net.
A made-up example
Say you have 400 members at $75 a month, which is $30,000 a month. All of them pay by card at an effective rate of 3%. That's $900 a month in fees, or $10,800 a year.
If half of them moved to ACH at a much lower cost, you'd keep most of that $450 a month. If you gave ACH payers $2 off, that discount costs $400 a month. In this example, you'd come out about even or a little ahead, and the members who switch save money. Change any number and the answer changes, so run yours.
Discount vs surcharge
There are two ways to do this, and the rules for each are different.
- A discount for paying by bank. You set your price and take a little off for ACH or cash. Discounts like this are generally allowed.
- A surcharge for paying by card. You add a fee to card payments. The card networks cap surcharges and require you to register and disclose them, surcharges generally can't apply to debit cards, and some states ban or limit them.
Your payment processor and your attorney can tell you what applies in your state. I'd check before adding any fee, because the rules change and the details matter.
Things to think through
- Failed payments. ACH payments can bounce for insufficient funds, and you may not find out for a few days. Make sure your platform retries and tells you.
- Member experience. A discount feels like a reward. A surcharge can feel like a penalty.
- Your price. Some owners skip all of this and set the price high enough to cover card fees.
What I'd do this week
- Add up last quarter's card and ACH fees.
- Work out your effective card rate.
- Run the made-up example above with your own member count and price.
- Ask your processor what payment options and rules apply to you.
Common questions
Do card fees belong on my P&L?
Yes. They're an expense, and they should be recorded every month even when the processor takes them out before the deposit lands.
Can I require ACH?
You can set the payment options you accept. Some members will push back, so weigh the savings against people who might leave.
Is it legal to charge a card fee in my state?
It depends on the state and the card networks' rules. Ask your payment processor and an attorney before you add one.
Want to see what each payment method costs you?
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