Alternatives to Surcharging

Surcharging is just one solution. You also have the ability to assess Convenience Fees and Service Fees, or offer a Cash Discount. Each of these solutions work differently according to Card Brand rules so we wanted to provide you with a little insight into each below.

• Convenience Fees can be charged only to a Transaction completed in a Card-Absent Environment. The Convenience Fee is implemented via a flat or fixed amount (not a percentage) that may be imposed on all forms of payment when a payee is using an alternative payment channel that is different from the merchant’s normal payment acceptance channel. As an example, a merchant selling movie tickets may offer the convenience of purchasing tickets online as opposed to in person at the box office. This Convenience Fee must be clearly disclosed, before the completion of the transaction, and represent payment for the convenience of paying through an alternate payment channel (such as online) that is different from the merchant’s normal payment channel.
• Service Fees can be a flat, fixed, banded, or ad valorem amount, regardless of the value of the payment due, and can be charged in both Face-to-Face Environment and a Card-Absent Environment. A service fee can be implemented by merchants in the following Merchant Categories: 8211 – Elementary & Secondary Schools, 8220 – Colleges, Universities, Professional Schools, and Junior Colleges, 9311 – Taxes, 9211 – Court Costs, 9222 – Fines, and 9399 – Misc Government Services, 8244- Business and Secretarial Schools, 8249- Vocational and Trade Schools.
• Cash Discount differs slightly from the above models and instead of being a fee based product, it offers a discount for paying in cash, however, the discount must be given as a reduction from the stated or standard price. Merchants may request or encourage a cardholder to use a means of payment other than a Credit Card, the method of doing so must be permitted under the Association rules, such as offering a discount from the merchant’s list, stated or standard price, among other possible incentives.