Comments on: Convenience Fees and Surcharge Rules http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/ Useful Insights and Information About Electronic Payments for U.S. Merchants Tue, 24 Jan 2012 15:56:38 +0000 hourly 1 http://wordpress.org/?v= By: anandkgoel http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5659 anandkgoel Thu, 08 Dec 2011 16:26:58 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5659 Keep in mind that a convenience fee is applied for all payment "tender" accepted within a channel. So if you are only accepting credit/debit cards via web/phone then you are fine to charge a convenience fee. However, if you accept e-check via the web then you have to apply the same convenience fee to the e-check. For the Utility vertical, Visa does not allow a convenience fee for face to face transactions. However, if you do not accept Visa then you can charge a convenience for face to face transactions. Again, you have to charge the same convenience fee if anyone pays by check in a face to face environment. You may limit cards to web/phone and redirect face to face customers to these channels. Keep in mind that a convenience fee is applied for all payment “tender” accepted within a channel. So if you are only accepting credit/debit cards via web/phone then you are fine to charge a convenience fee. However, if you accept e-check via the web then you have to apply the same convenience fee to the e-check.

For the Utility vertical, Visa does not allow a convenience fee for face to face transactions. However, if you do not accept Visa then you can charge a convenience for face to face transactions. Again, you have to charge the same convenience fee if anyone pays by check in a face to face environment. You may limit cards to web/phone and redirect face to face customers to these channels.

]]> By: Tommy McDonald http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5657 Tommy McDonald Wed, 07 Dec 2011 02:26:59 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5657 I am a General Manager for a Water District in Texas. We are reviewing the rules on a local governments legality to assess a convenient fee to make the transaction revenue neutral. After reading various rules it appears that if a customers logs on to the District's website/a third party website or uses a phone to pay the water bill with a credit card it is OK to assess a convenient fee. Is it legal in a face to face transaction with VISA MC and Discover to assess a convenient fee? The bills customers are paying will be for water and sewer gallonage, a water and sewer base fee, and any late fees or penalties ect. Please help! Tommy McDonald Manager JCWCID 10 I am a General Manager for a Water District in Texas. We are reviewing the rules on a local governments legality to assess a convenient fee to make the transaction revenue neutral. After reading various rules it appears that if a customers logs on to the District’s website/a third party website or uses a phone to pay the water bill with a credit card it is OK to assess a convenient fee. Is it legal in a face to face transaction with VISA MC and Discover to assess a convenient fee?
The bills customers are paying will be for water and sewer gallonage, a water and sewer base fee, and any late fees or penalties ect.

Please help!
Tommy McDonald
Manager
JCWCID 10

]]> By: anandkgoel http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5408 anandkgoel Mon, 11 Jul 2011 14:08:14 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5408 Andrew, Visa regulations prohibit a merchant from charging a convenience on recurring transactions. So a merchant can charge a convenience on recurring transactions if they do not accept Visa. Moreover, the radio station has to charge the same convenience fee for all the payments (credit card, debit card, ACH) that are accepted via the "convenience" channel (i.e. web, phone, etc.). In terms of being being "legal"....there are no laws that govern convenience fees, outside of a few industries like insurance. There are only card association (Visa, MasterCard, AmEx, and Discover) regulations. If the merchant isn't following the regulations, you can inform the merchant and inform the bank that issued your credit card. At the end of the day, if you don't want to pay a convenience fee send the radio station a check. Andrew,

Visa regulations prohibit a merchant from charging a convenience on recurring transactions. So a merchant can charge a convenience on recurring transactions if they do not accept Visa. Moreover, the radio station has to charge the same convenience fee for all the payments (credit card, debit card, ACH) that are accepted via the “convenience” channel (i.e. web, phone, etc.).

In terms of being being “legal”….there are no laws that govern convenience fees, outside of a few industries like insurance. There are only card association (Visa, MasterCard, AmEx, and Discover) regulations. If the merchant isn’t following the regulations, you can inform the merchant and inform the bank that issued your credit card. At the end of the day, if you don’t want to pay a convenience fee send the radio station a check.

]]> By: Andrew http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5393 Andrew Thu, 07 Jul 2011 17:00:28 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5393 WE are currently running advertising on many radio stations. Have currently started on a new station and will have monthly billing. Went to pay with a Credit card & answer was that a 2.5% charge will be added to each transaction as a convenience fee? Is this legal? Please advise. thanks andrew WE are currently running advertising on many radio stations. Have currently started on a new station and will have monthly billing. Went to pay with a Credit card & answer was that a 2.5% charge will be added to each transaction as a convenience fee?

Is this legal?

Please advise.

thanks
andrew

]]> By: anandkgoel http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5390 anandkgoel Mon, 27 Jun 2011 15:19:19 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5390 It is perfectly legal for an apartment to charge a convenience fee if you pay via credit card online. Apartments typically haven't accepted credit cards due to processing fees. Now, some apartments accept cards because they can charge a convenience fee for truly providing a "convenience" to renters. You can avoid this fee altogether by dropping off a check to the apartment office. It is perfectly legal for an apartment to charge a convenience fee if you pay via credit card online. Apartments typically haven’t accepted credit cards due to processing fees. Now, some apartments accept cards because they can charge a convenience fee for truly providing a “convenience” to renters.

You can avoid this fee altogether by dropping off a check to the apartment office.

]]> By: Chazz http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5389 Chazz Tue, 14 Jun 2011 21:27:25 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5389 my question is...Is it legal for my apartments to charge a fee of $12.95 to pay with credit card online? It is not just a one time fee, if I pay online any other time again I will have to pay it again. my question is…Is it legal for my apartments to charge a fee of $12.95 to pay with credit card online? It is not just a one time fee, if I pay online any other time again I will have to pay it again.

]]> By: anandkgoel http://www.optimizedpmts.com/blog/index.php/convenience-fees-and-surcharge-rules/comment-page-1/#comment-5384 anandkgoel Thu, 14 Apr 2011 19:15:53 +0000 http://www.optimizedpmts.com/blog/?p=13#comment-5384 yes. here are some general guidelines... Must provide a true “convenience” in the form of an alternate payment channel Fee is designed for one-time payments only Fee cannot be applied to recurring payments Fee must be a flat fee Fee must be equally assessed to all payment types in the same channel Fee must be included in the total amount of the transaction: it cannot be split out from the payment Fee must be assessed by the same merchant actually providing the goods or services Fee cannot be collected in a Retail (face-to-face) environment. yes. here are some general guidelines…

Must provide a true “convenience” in the form of an alternate payment channel
Fee is designed for one-time payments only
Fee cannot be applied to recurring payments
Fee must be a flat fee
Fee must be equally assessed to all payment types in the same channel
Fee must be included in the total amount of the transaction: it cannot be split out from the payment
Fee must be assessed by the same merchant actually providing the goods or services
Fee cannot be collected in a Retail (face-to-face) environment.

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