Convenience Fee:
- A convenience fee is a fee charged by a businesses, government agencies, schools, etc for payments made by credit cards instead of cash, check, or ACH.
- Before the decision to allow convenience fees in almost all states, only federal, state & local agencies were allowed to impose this fee when paying taxes, tickets, tuition etc!
- A Convenience Fee is typically a fixed flat amount.
- Convenience fees are charged by businesses to cover the cost they pay for processing a credit card payment.
- There are strict policies and regulations when it comes to convenience fees and surcharges; make sure you kow them prior to setting up a program.
SURCHARGE FEE:
- A Surcharge Fee is a percentage charged by businesses/merchants to a credit card transaction to cover the merchant’s costs for processing that payment. Instead of the merchant having to absorb this expense, the customer who chooses to pay by credit card pays.
- Many know this better as "cash-discounting". The practice of offering a lower cost to customers that pay with cash instead of credit cards.
- Surcharge Fees are still not legal in several states.
- Rigerous posting that items or services are Cash Pricing and that use of a credit card will incur a Surcharge Fee.
SERVICE FEE:
- Service Fees are charged by government agencies, schools, etc for payments made by credit cards instead of cash, check, or ACH.
- A service charge is also a fee charged to customers for something specific, such as a bank charging a fee for using an ATM that's not part of its network or a vendor charging a fee for making a payment with a credit card.
- Service Fees can range from a convenience in the manner of purchase to a fee for faster response. Each merchant will impose their own Service Fee based on their business model.
Merchant Processing Solutions can help you understand your options and save money with one of our options. Give us a call today!
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