In today’s business environment, credit card payment acceptance is more important than ever. Surcharging is a viable option to help offset the increase in credit card usage.
Surcharging is a fee automatically added to the bill or sale when a credit card is used for payment to offset the cost of transaction fees and is passed on to the customer.
Even though surcharging is straightforward, many regulations are in place by state laws and card brands that must be followed.
First, make sure it is legal in your state, look at what card brands you accept, and understand some of the regulations.
Notifying the Card Brands
- Mastercard requires merchants to submit a form notifying them of the intention to surcharge 30 days before the start date of surcharging.
- This surcharging notification online form can be found here: Mastercard.
Disclosure to Customers
- Online: Clearly defined within the checkout flow.
- Stax Bill provides the disclosure on invoices that surcharges apply. The messaging can be altered if you like.
- Over the Phone: Verbal notice must be given before payment is processed.
The surcharge cannot exceed 4%, and the merchant cannot profit from surcharging.
- Processing costs are variable based on the type(s) of cards you accept but don’t worry. We establish the percentage for you. Our industry-leading surcharging technology distinguishes credit vs. debit card types and automatically applies the surcharge rate to credit card transactions ONLY.
The surcharge amount and sale price are processed in one transaction.
- Simply stated, merchants cannot process the amount for your product or service and then process the Surcharge amount.
- Example: 4% Surcharging fee + $100 sale = $104 total transaction
NOTE: Stax Bill handles all of this for you.
The surcharge amount is displayed before processing and displayed on the invoice.
- Stax Bill automatically places your surcharge amount within your payment types once configured.
- The sale, surcharge, and total must be identified before processing and represented on the invoice. Stax Bill automatically implements this requirement.
Credit Card Surcharging
- Debit cards (even if run as credit), Gift Cards, and Prepaid cards cannot be surcharged.
- Surcharging fees apply to all credit cards, whether a consumer, rewards, business, corporate, or purchase card.
NOTE: Stax Bill offers the technology that determines the card type and automatically adds the pre-set Surcharge amount displayed in Online situations.
- Currently, two States and one US territory prohibit surcharging: Connecticut, Massachusetts, and Puerto Rico.
- Stax Bill will continue to monitor US state laws to determine the applicability of surcharging and will automatically check and apply to surcharge when and where legal.
- Stax Bill will leverage the address associated with the credit card used to determine the applicability of surcharging.
At Stax Bill, our team of Developers and Partner Success Managers will guide you through the enablement process, ensuring you are compliant and advise on which surcharging payment acceptance solutions make sense for your merchants, from recurring billing to card-present (in-person) transactions.
Surcharging can be complex, but our dedicated Customer Success Team can guide you. CLICK HERE to enable surcharging.