Surcharge

Disclaimer

It is the partner’s and merchant’s responsibility to comply with applicable surcharge laws and credit card network rules. Ensure that:

• You follow card brand and regional/state regulations

• Proper disclosures are provided to the customer before applying any surcharge

1. What is a Surcharge?

A surcharge is an additional fee applied to a credit card transaction to cover processing costs. Businesses often use surcharges to offset the fees imposed by credit card networks, allowing them to retain more revenue per transaction.

Merchants choose to apply surcharges:

• To reduce processing costs for credit card transactions

• To maintain profitability without increasing base prices

• To remain competitive while transparently passing on payment processing costs

Surcharges are legal in many jurisdictions but are subject to strict rules and disclosure requirements. Merchants must ensure that customers are made aware of the surcharge before completing a transaction.

2. How Surcharge Works in PayEngine

1. Merchant Level Configuration In the partner portal, the surcharge can be configured at the merchant level and it will be automatically applied to all the transactions for the merchant. Following fields are the ones that will be configured

   1. Surcharge Fee Name: Custom name for the surcharge fee. Defaults to "Convenience Fee".

   2. Surcharge Fee Percentage: Specifies the surcharge percentage .The fee is calculated based on the percentage of the total amount.

   3. Surcharge Print On Receipt: true | false - Whether to display the surcharge on the receipt.

2. Transaction API

   When processing credit card transactions through the API, you will have the option to override the merchant level configuration:

   1. data.surcharge_amount: Specifies the surcharge value to override the merchant level configuration. This amount will be in addition in the total transaction amount.

   2. data.surcharge_bypass: true | false - Optional field to bypass surcharge fee. Default is false

   Flow:

   1. When capturing card details via secure fields, use the Get Token API to determine if the card allows surcharges based on the card type (Credit)

   2. If a surcharge is applied and the card supports it, display a consent prompt to the cardholder and capture their approval before processing.

3. Virtual Terminal If the merchant is configured to accept surcharge, optional UI fields - Bypassing surcharge and overriding the configuring surcharge amount

4. Payment Link & Payment Session When generating a payment link:

   1. Include the relevant surcharge fields such as data.surcharge_bypass, data.surcharge_amount.

   2. The UI will prompt the end user to accept the surcharge before proceeding with payment.

5. Card-Present Transactions (e.g., PAX Devices)

   1. If surcharge is enabled for a merchant, the device will automatically apply the configured surcharge percentage.

   2. Ensure that PAX or other hardware configurations align with laws and regulations regarding surcharge.

3. Best Practices for Surcharge Policies

• Ensure Compliance: Stay informed about legal and network rules on surcharges in your jurisdiction. Consult with legal advisors or compliance experts.

• Transparent Communication: Always notify the cardholder before applying a surcharge, both online and in person. Provide clear language explaining the fee.

• Documentation: Maintain clear, written surcharge policies for your business. Include how and when surcharges are applied and under what conditions.

• Employee Training: Make sure staff understand when and how to apply surcharges. Provide scripts and documentation to ensure consistent communication with customers.

• Audit and Monitor: Regularly review surcharge settings, card brand requirements, and legal updates to stay compliant and avoid penalties.