Convenience Fees Handling

When do merchants use credit card convenience fees? This type of fees is used in order to pass processing costs to the cardholder. Consequently, merhants need payment processing software which has this functionality. Let’s try to explain how it can be added into your payment system.

First you need to find answers to the following questions. Is it going to be implemented within your system or within some third-party system? Will convenience fees be charged as the part of the original transaction or as a separate transaction?

Businesses which decide to use the first approach and to process payment and convenience fee as a single transaction should remember that charging of convenience fees is allowed only under some specific merchant category codes. That’s why when funding of your merchant is handled by the third-party system convenience fees will be also handled by this system.

In case when you choose to process them separately there are still some aspects to consider: whether convenience fees should be charged for declined transactions, how to act when transaction is cancelled but the fee has already been charged or what should be done if there is not enough money to cover both the payment and the fee.

There is one more important thing which you need to pay your attention to – convenience fees calculation. There are three options available. It can be a fixed amount, a percentage of the original transaction or a combination of two.  

Additional information on the implementation of convenience fee handling functionality can be found in the new publication at #UniPayGateway. If you are interested in the more detailed explanation of credit card convenience fee concept visit Paylosophy Payment Advice Portal.