A cash discount program is a merchant pricing model that posts slightly higher card prices and gives a discount to customers who pay cash — passing the cost of card acceptance to the card transactions that cause it. Programs typically run at 3.50%, 3.75%, or 3.99%.
Cash discounting matters to merchant rewards because it creates fundable margin inside the merchant’s existing pricing. In Prestige Rewards, merchants earn 0.10, 0.15, or 0.20 points per dollar of settled card volume, depending on their cash-discount program rate (3.50%, 3.75%, or 3.99%) — with reward funding carved from inside the program rate, not added on top.