GoDaddy Says “Pay 0%”—But Who Really Pays?

If you are like most business owners, you probably receive emails from companies trying to earn your credit-card processing business.

I recently received a GoDaddy promotion offering a free POS device and “0% credit-card processing fees.” Because I have worked in the payments industry for more than 20 years, I immediately knew there had to be more to the offer.

The headline certainly gets your attention, but business owners need to understand what “0%” really means. Unfortunately, finding the conditions and qualifications behind the claim wasn't easy.

GoDaddy is not eliminating the cost of processing credit cards. Its Rate Saver program adds a surcharge to eligible credit-card transactions, transferring that cost to the customer.

What the advertisement does not prominently explain

• Rate Saver requires a paid subscription plan.

• The customer pays a surcharge when using a credit card.

• The merchant still pays 1.9% on in-person debit-card transactions.

• Debit cards cannot be surcharged, even when processed without a PIN.

• Manually entered credit-card transactions still cost the merchant 0.5%.

• Some ecommerce transactions are not eligible for Rate Saver.

• Disputes cost $15 each.

• Same-day and instant deposits cost an additional 1.75%.

• The merchant remains responsible for complying with surcharge laws, signage rules, disclosure requirements, and card-network regulations.

For example, a business accepting $20,000 per month in debit-card transactions would pay approximately $380 per month in debit processing fees, plus the monthly subscription—even though the advertisement leads with “0%.”

This does not necessarily make Rate Saver a bad program. For the right business, surcharging can substantially reduce processing costs. However, “0%” does not mean there is no cost. It means much of the cost is being transferred to the customer.

Questions to ask before accepting a 0% offer

1. Who is actually paying the processing fee?

2. What will I pay for debit-card transactions?

3. Is there a monthly software or subscription charge?

4. Which transactions are excluded from the offer?

5. What will keyed, online, and invoiced transactions cost?

6. Who is responsible for surcharge compliance?

7. Is the equipment truly free, and what happens if I cancel?

8. Is the pricing guaranteed in writing?

The headline may say “0%,” but the complete story is always in the details.

Cost is only part of the decision

Beyond rates and fees, business owners should ask another important question:

Who is the better company—or person—to trust with your business?

Will you have a dedicated representative who knows your business, or will you speak with a different person every time you call a customer-service center? When you have a funding problem, equipment failure, or chargeback, who will answer the phone—and how quickly will that person help you?

Every processor must deal with interchange and card-brand assessment fees. These wholesale costs are established by the card networks and vary based on factors such as:

• Type of business

• Type of card used

• How the transaction is processed

• Whether the card is present

• Information submitted with the transaction

Restaurants, nonprofit organizations, grocery stores, professional services, and retail stores can all qualify for different interchange categories. No processor can simply make these underlying card-brand costs disappear.

What processors can control is their markup over those costs, their additional fees, the technology they provide, and the quality of service they deliver.

With Ray Harrington, you receive straightforward answers, honest and transparent pricing, and no misleading games. You have our direct telephone number, and you know exactly who will help you when you need assistance.

Before making a decision based on a headline promising “0%,” make sure you understand the entire offer—and the level of service that comes with it.

Reach out if you have questions.!