Dual pricing explained, with the real math

Card processors do not work for free. On every card transaction a processor takes a percentage of the amount plus a flat charge — for the rate QuoteHQ passes through, that is 4% plus $0.30 per charge. On a $1,800.00 deposit that is real money, and if you absorb it, it comes straight out of the number you quoted.

There are three ways to handle that fee. You can eat it. You can add it back naively. Or you can price the two rails correctly. Only the third one leaves you whole, and the difference is arithmetic, not opinion.

Eating the fee compounds

Absorb 4% plus $0.30 and it feels small on any one invoice. On our $1,800.00 deposit the fee is $75.32. Collect four deposits like that in a month and eat the fee on all of them, and you have handed the processor $301.28 that month — $3,615.36 across a year. That is not a rounding error. It is a line you could have kept.

Adding a naive surcharge doesn’t break even

The instinct is to add the fee back: take 4% of the base, add the $0.30, and bill that. On our example that is $1,872.30. It looks right. It isn’t — because the processor’s 4% now applies to the larger number you just charged, not to the base you started from.

You are short $2.89. Small, but it is short every single time, and it grows with the ticket. The fee has to be grossed up, not added on.

The correct gross-up

To net your full base after the processor takes its cut of the charged amount, you divide, you don’t multiply. The card price is the base plus the fixed charge, divided by one minus the rate:

card = ⌈ (base + $0.30) ÷ (1 − 4%) ⌉

On our deposit that is ($1,800.00 + $0.30) ÷ 0.96, rounded up — $1,875.32. Now when the processor takes 4% plus $0.30 of $1,875.32, what lands in your account is your full $1,800.00. The rounding always goes up, so you are never a cent short.

Dual pricing is not a checkout surcharge

Worth being precise here, because the words get used loosely. A surcharge adds a fee to a card sale at the register — you ring up the base, then tack a card fee onto it. Dual pricing lists two prices from the start: a card price and a lower cash-or-bank price. The client sees both before they choose and picks the rail they prefer. Because the fee is built into a listed price rather than added after the fact, dual pricing is generally the cleaner posture under card-network rules. Rules vary and none of this is legal advice — but presenting two honest prices is a very different thing from bolting a fee on at the end.

The rail with no card fee at all

The other half of dual pricing is that a bank transfer (ACH) carries no card fee. On a big-ticket balance that matters: the client moves $1,800.00 from their account, it costs them nothing extra, and you receive $1,800.00. Card is for speed and convenience; bank transfer is for size. Listing both prices lets the client trade one against the other themselves.

In QuoteHQ this is automatic. Every invoice offers both rails, the card price is computed with the formula above and frozen when you send, and the client picks. You can read the full mechanics on invoices & payments, and if you write big-ticket quotes, QuoteHQ for contractors walks through a deposit on a five-figure job.

The whole idea is small and stubborn: a processing fee should land on whoever chooses the convenient rail, not on the number you worked out for the job. Price both rails honestly and it does.