Credit Card Surcharge: Fees, Laws & More Explained

Credit Card Surcharge: Fees, Laws & More Explained

The days of almost exclusively accepting cash payments are long gone, and electronic payments and credit cards are now the norm. Some new businesses are even opting out of cash altogether — deciding to save overhead costs by only supporting lean, cheaper merchant hardware. And these changes are happening for good reasons, no one doubts that electronic payments have dramatically improved financial efficiency and consumer convenience, but with that “convenience” comes additional fees — namely interchange rates & processing fees. And those fees really add up. So much so that many businesses have opted to add a credit card surcharge to payments conducted with cards to compensate for this loss. This is typically a low percent or flat rate. If you’re considering this in your business, you need to be careful. The laws around surcharges change often and vary state by state. Customers aren’t always thrilled by the practice, either….

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Interchange fees & rates

Interchange Fees & Rates: What You Need to Know

Interchange fees are easily the most confusing transaction fees you need to understand as a merchant, but they are also arguably the most important. They make up the bulk of the fees you pay and can vary widely across industry & customer base, and it’s all too common for shady merchant services providers to charge extra percentages or purposely confuse clients on the terms of interchange in hopes of getting more money. We’re sick of seeing that happen, and that’s why we’re writing this blog: to bring some clarity to interchange fees. The easiest way to understand interchange fees is by first understanding the basic definition & reasons why they exist before digging into the variations and more complex aspects of how interchange affects your business. With that in mind, let’s start at the top. Definition of Interchange Fees In short, interchange rates and fees are fees the issuing bank…

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FANF (Fixed Acquirer Network Fee) Explained

Trying to budget for credit card transaction fees is tough. It’s tempting to think that it could be a lot easier – a flat fee or percentage would seem to do the trick. If your business processes Visa card payments, however, you’re probably somewhat familiar with the seemingly unpredictable FANF fee that appears on a monthly basis. The reason it seems to vary so wildly is because the FANF fee is calculated based on a number of details about your business as well as the nominal dollar amount of visa transactions every month. This article is intended to help you understand the Visa FANF fee and provides a step-by-step process for calculating your monthly FANF bill. What is FANF? FANF stands for Fixed Acquirer Network Fee. That is a fancy way of saying, “the cost of taking money from Visa cardholders for you.” The idea behind Visa FANF is that it’s a set fee that…

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Merchant Education & Learning Center

What Is a Convenience Fee?

In a world where almost all money is in digital bank accounts, paying with a card is a matter of course, and yet a large number of stores and restaurants charge an extra fee to any guest who pays in the most practical manner. This is called a convenience fee and is charged because the businesses think it will save them money. What most don’t realize is that the pittance they are collecting from each card paying customers isn’t worth the annoyance most customers feel for being discouraged from using their primary payment method. Everything is bought with cards now. Even vending machines have card readers so why are businesses still pretending that paying with cash or check are the ‘normal’ ways? The Cost of Processing The reason that many venues charge a convenience fee is because the bank and processor service both take a small percentage from each credit…

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