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What is a merchant services cash discount program?

A merchant discount rate refers to the rate charged for payment processing services to a merchant on the credit and debit card transactions. The merchant is expected to set up this service and to agree to pay the rate while accepting the payments through credit and debit cards.

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Credit card processing is slowly becoming expensive for merchants. It is the reason they are looking for avenues to reduce the expense. One such avenue is the cash discount merchant services. It offers incentives to customers to pay by check or cash, and allows business owners to offset the payment processing costs.

Cash discount program
Businesses use a cash discount program and offer discount to customers paying by check or cash, instead of paying using a debit or credit card.

Merchants incentivize by offering discount for the cash payments done to the customers and include a service fee. The cash payments are a way to offset the processing charges of the payment coming with card transactions.

How does it work for the merchant?

The merchant services cash discount program offers various benefits to the merchant such as:

Reduced fees- It is the obvious benefit that merchants get on adopting cash discount program. Their processing fees on cards get eliminated or reduced. Deciding not to process the cards implies avoiding paying for the services.
Reduction in chargebacks- With the card payments frequency reduction, the chargebacks also reduce. People or merchants can opt for the cash discount program, if they are struggling with high chargebacks number. Opting for the program of cash discount is a way or reducing the risk of continuing with the current rate.
Increase in cash payments- Customers commonly prefer using cards, but providing the customers a discount will certainly bring more cash payments. It also means faster access to funds as processing times for the merchant gets eliminated. The decrease in card payments reduces drastically the likelihood of fraud and cash is favored.
Increase purchases- The customers and merchants have alike benefits that it is best to consider adopting the cash discount program. It is good and may suit most businesses to see increase in purchases.
There are few enticing tricks of marketing than offering sales discounts on the prices marked. Customers also love saving money and when they get to save through cash discount, they appreciate it. Even if the saving is a small amount, it is enough for people to use this facility and there is the possibility of increasing additional purchases.

The popularity of the cash discount programs has given birth to different questions. For instance, the question regarding the legality of the credit card processing cash discount program has begun. Are there any states that prohibit credit card processing? Let us understand the credit card processing hereunder:

a. What is Credit Card Processing Cash Discount Program?
A cash discount is a benefit that is offered by a seller to a purchaser in exchange for making a payment before the due date. A cash discount is when the seller reduces the amount owed by the purchaser by a modest percent or a specific monetary amount.

Following we have explained in detail regarding the credit card processing:

Customers are rewarded with cash savings if they pay their bills within a particular time range.
A cash discount allows a seller to get her money faster than she would if she didn’t provide the reduction.
A vendor who gives a 2% reduction on an invoice due in thirty days if the customer pays within the first 10 days after receiving the billing is an example of a cash discount.
b. In Which States Is A Credit Card Processing Cash Discount Program Not Legal In?
Eleven states have seen the error of their ways. They have made it unlawful to engage in cash discount merchant services programs. Merchants are prohibited from imposing surcharges on credit card purchases in California, Colorado, New York, Oklahoma, Texas, Puerto Rico, Massachusetts, Florida, Kansas, and Connecticut. Minnesota bans a vendor of products or services that establishes and is responsible for its consumer credit card from charging a premium to a buyer who chooses to pay with that credit or debit card rather than cash, check, or other similar methods.

The PFP team believes that the majority of states that consider this unlawful will keep rising. All businesses, in our view, should avoid these types of initiatives and urge their customers to return to a no-surcharge setting, such as free lollipops or a give-back scheme.

Conclusion
Cash Discount Merchant Services Programs are currently illegal in 11 different countries around the world. The vendors, in the mentioned countries, should not use the cash discount programs at all. Other states in America are also imposing restrictions on the employment of cash discount programs. Many more states will declare the cash discount programs as illegal.

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Navigating the Mortgage Maze: The Benefits of Choosing a Broker Over a Bank

When embarking on the journey to homeownership, navigating the complex world of mortgages can be daunting. A mortgage broker can be your ally, offering personalized service and access to a wide array of loan options to secure the best possible rate for your dream home. This article delves into the reasons why opting for a mortgage broker could be a smarter choice than going directly to a bank.

Table of Contents
The Role of Mortgage Brokers in Home Financing
Comparing Mortgage Brokers and Banks
The Comprehensive Services Offered by Mortgage Brokers
Understanding How Mortgage Brokers Facilitate Your Loan Process
Conclusion: Streamlining Your Path to Homeownership
The Role of Mortgage Brokers in Home Financing
When it’s time to secure financing for a new home, many prospective buyers default to their local bank or credit union. These traditional financial institutions have long been associated with lending, but they may not always offer the most competitive or suitable mortgage products for every individual. In contrast, mortgage brokers operate as intermediaries who can scour the market to find the best mortgage rates and terms tailored to your unique financial situation.

According to a 2019 report by the Intermediary Mortgage Lenders Association (IMLA), mortgage brokers in the UK were responsible for 74% of all mortgage transactions. This significant market share underscores the value that brokers bring to the mortgage process.

Comparing Mortgage Brokers and Banks
While banks provide a direct route to mortgage applications and offer a selection of their own mortgage products, they may not cater to the diverse needs of all borrowers. Mortgage brokers, on the other hand, have access to a vast network of lenders, including those that may not be directly accessible to the general public. This extensive selection means brokers can often secure more favorable deals than banks.

Moreover, mortgage brokers are typically compensated by the lenders, not the borrowers, which aligns their interests with finding you the lowest possible rates. Personalized service is another hallmark of mortgage brokers; they offer consistent, dedicated assistance throughout the entire process, unlike the potential for fragmented service at larger banking institutions.

The Comprehensive Services Offered by Mortgage Brokers
Mortgage brokers are not just for those with pristine credit histories. They can also assist individuals who have faced financial challenges, such as bankruptcies or foreclosures, in securing a loan. Their expertise extends to refinancing options, helping clients to renegotiate their existing mortgages for better rates.

For first-time buyers, the mortgage landscape can be particularly perplexing. A broker’s knowledge of the market and the various mortgage products available can be invaluable. They can advise on different mortgage terms and how they impact the overall cost of the loan, potentially saving clients substantial amounts over the loan’s lifetime.

Understanding How Mortgage Brokers Facilitate Your Loan Process
Banks may not specialize in mortgages, which can lead to longer processing times. Mortgage brokers, however, are focused solely on home loans and have established relationships with lenders, streamlining the approval process. They understand lender requirements and can provide guidance to help clients prepare their applications, increasing the likelihood of a swift and successful approval.

Conclusion: Streamlining Your Path to Homeownership
Choosing a mortgage broker over a bank can simplify the home-buying process, providing clarity and confidence as you make one of the most significant financial decisions of your life. If you’re in the UK and seeking expert mortgage advice, consider reaching out to a reputable broker like Mortgage Broker Huddersfield for personalized assistance tailored to your needs.

In conclusion, the expertise and personalized service offered by mortgage brokers can make them a preferable choice for many homebuyers. With their ability to navigate the complex mortgage landscape and secure competitive rates, brokers can be instrumental in helping you achieve your homeownership goals.

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Should You Invest in SIPs when the Market Is Rising?

As a new investor if you wish to invest in mutual funds or make new investments to achieve your financial goals, then you would have wondered if this was the right time to invest in SIPs…

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As a new investor if you wish to invest in mutual funds or make new investments to achieve your financial goals, then you would have wondered if this was the right time to invest in SIPs.

Investors generally believe that if they invest in rising markets, they will earn lower returns because further growth may be limited.

The meaning of SIP in mutual fund is that you invest a certain amount at regular intervals on a weekly, monthly, quarterly or bi-annual basis.

Any time is a good time to start investing through an SIP in mutual fund meaning as long as you invest regularly despite the market conditions. Timing the market can be a meaningless activity as it is challenging to predict market behaviour.

Investing via SIP in mutual fund means timing the market becomes futile and you can focus on ‘time in the market’. When you invest in SIP meaning investment, you acquire more mutual fund units when prices are low so when the market rises, it results in higher returns. When prices are high you acquire fewer mutual units when prices are high. This lowers your average investment cost over a period. However, one should note that investing in SIP are subject to market risk and do not assure a profit or returns or protection against a loss in a downturn market.

It is important to consider the following factors to get the best out of your investment:

1) Select worthy schemes

Different mutual fund schemes have different investment strategies, objectives, risk profile, etc. Select schemes that meet your financial goals, risk profile, and investment objective. Also consider qualitative parameters like the efficiency of the mutual fund house’ systems and processes, the fund management team, and portfolio characteristics. Once you have determined your requirements, select the mutual fund scheme by examining risk-reward parameters. Do not be fixated on the fund’s past performers because past performance is no indicator of future returns.

2) Invest the right amount

Though the mutual fund scheme is good, you could fall short of reaching your goal, if you do not invest a sufficient amount. The amount to be invested regularly will depend on your desired corpus as well as the investment goal. Use an SIP calculator to calculate returns to be earned on the investment amount meant to receive from SIPs. You should adjust the investment amount for inflation.

3) Ignore the market noise

Erratic market conditions can make investors nervous about investing further. You may decide to stop or redeem your SIP investment whenever the market turns volatile. However, you can partake of the benefits of SIP investment meaningfully only if you invest regularly despite the market conditions.

If you stop SIP or miss instalments, you might forgo the advantage of compounding and thus miss your investment target. Therefore, it is important to continue investing till you meet your goal.

To conclude

Keep in mind that equity investments take time to grow. In case of SIP, give each instalment sufficient time to grow and generate long term risk adjusted returns. As you start approaching your goal, gradually reduce your equity exposure to invest in a more stable and less risky investment avenue, such as debt mutual funds and bank deposits.

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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