Convenience Fee & Surcharging

Convenience Fee – Government & Education

Adjust the amount of the convenience fee in proportion to what each transaction actually costs.

1. Automatically calculate rate based on card type
2. Pass on the real cost of card acceptance
3. Effectively reduce transaction costs to zero

Many institutions, such as municipalities and colleges, choose to pass on a processing fee to cardholders. Different cards have different costs. Intelligent Rate allows these institutions to automatically calculate the right fee based on the actual cost of each transaction. For example, if a college chooses to pass on a processing fee to its students, those students no longer have to pay a flat rate for making a payment, as other solutions require them to do. A flat rate forces a student with a low-cost card to subsidize a student with an expensive rewards card. Instead, if a student uses (for instance) a debit card to make a payment with Intelligent Rate, his or her fee may be less than 1%. We know that both your bottom line and your patrons’ satisfaction are important to your institution.

Surcharging – (Rules and State Laws apply)
New rules, per settlements with Visa and MasterCard, allow American merchants to add a fee (a “surcharge”) for the use of credit cards—but merchants are not permitted to surcharge debit cards. Traditional payment technologies, however, cannot determine card type until after the transaction is processed. Our patent-pending technology ensures regulatory compliance by determining whether a given card is a credit card or a debit card before the transaction is processed. The platform automatically applies a surcharge whenever a credit card is swiped or entered so that you get back what you pay for processing. Under the old rules, businesses were required to pay the cost of accepting credit cards—which often exceeds 3% of the sale price—without help from the group of customers who created these costs. As a result, businesses increased their prices for all customers, forcing customers who paid with debit cards or cash to subsidize the customers who used rewards cards, which cost much more to process. Now, customers who want rewards can choose to pay for them. This is a game changer. By analogy, surcharging became legal in Australia in 2003. Today, 42% of all Australian merchants, and 60% of large Australian merchants, recover their costs by passing on a surcharge to customers.

Compliance is critical. In order to surcharge, businesses must observe the new rules. To that end, our product solution team includes regulatory experts: we’ll complete the registration process, provide the necessary signage, and setup your account with the right parameters.

New Rules at a Glance
• The merchant must be registered with Visa, MasterCard, and Discover.
• The merchant must inform his or her customers of the surcharge with appropriate signage at the store entrance and at the point of sale.
• The amount of the surcharge must not exceed the merchant’s retail cost of acceptance or 4%, whichever is less.
• The surcharge and the price of the product or service must be processed together as one transaction.
• The receipt must show the amount of the surcharge as a separate line item.
• The merchant must not surcharge debit cards.

Merchants Can Surcharge in these States:
Alabama
Alaska
Arizona
Arkansas
California
Delaware
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maryland
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

To learn more about the most current payment methods available, contact  NACCA.