Can The Merchants Charge Customers Additional Fee To Offset Credit Card Processing Fee?
Credit card processing fee is something that every online merchant should understand. The ecosystem is quite dynamic and merchants operating online must embrace it to conduct their online business smoothly. There are different types of credit card processing fees and at International Payment Solutions, we have already covered those fees. Here, we will basically cover an important question that definitely titillates the mind of most businessmen and consumers.
If you are operating an online business, you have probably know the different types of credit card processing fees. Well, these are something that merchants want to skip. They utilize various plans in order to offset the credit card processing fees. Well, merchants operating online businesses think that they can reduce the credit card processing fees by charging customers some additional credit card processing fees. But, is this possible?
Well, there are different consumer guidelines, credit card brand agreements and different laws that merchants will have to follow. The entire scenario depends upon the type of business you do and the region where you are doing the business.
Different Types Of Credit Card Processing Fees- Surcharge Fees And Convenience Fees
In order to know the answer, you must know the difference between the surcharge fees and the convenience fees. Surcharge fee is something that is closely associated with the credit card processing fee. Well, merchants generally pay fees for accepting card payments from the customers. Now, the surcharge fees are designed in such a way so that they can mitigate or reduce the overall cost of these credit card processing fees that merchants pay. Surcharge fees basically indicate the passing of credit card processing fees onto the customers. The main objective of these types of processing fees is to mitigate or reduce the burden of overall credit card processing fees from the shoulder of the merchants.
On the other side, the convenience fee is completely different from the surcharge fees. Merchants charge customers convenience fees when they offer any additional payment option that is not generally available at their business. If the merchants accept payments that are in-person in nature and offering any additional payment option to add convenience to the overall payment process, the merchants can charge convenience fees.
Credit Card Processing Fees- MasterCard And Visa Issued Settlements
MasterCard and Visa are the two top credit card brands. In Canada, these credit card brands issued lawsuit settlements regarding the credit card processing fees. It is something that merchants will have to pay when they receive card payments from the consumers. So, last year, these two credit card brands sketched guidelines. The guidelines were all about charging the surcharge by the merchants. However, there is no additional information on when the surcharge can be applied.
If we talk about the United States, merchants can charge customers surcharge.