In merchant services, surcharging means the merchant charges clients an extra fee when paying by credit card in order to recoup their processing fees. Surcharging is available on request for customer-facing forms in ClientPay but requires compliance with card brand operating rules and regulations.
Here are some important things to remember:
- There are several states that have enacted rules around surcharging. Please check your state’s laws before you activate surcharging. State and federal laws supersede card brand rules and regulations.
- Surcharging only applies to credit card purchases. Certain card types, such as debit cards, are prohibited from surcharging.
- You can select what modules use surcharging but, once turned on, it applies to all customers.
- While it appears to be one single transaction for the client, the original payment and the surcharge will always appear as separate payments in the back office and the client will see two separate charges on their credit card statement.
- The root charge and surcharge can go to different bank accounts. Example - A trust payment will deposit to your trust bank account but you can route the surcharge to go through your Operating account if that is the account you use for all processing fees.
Click here for a full list of frequently asked questions.
Turn on Surcharging
An authorized admin user must email firstname.lastname@example.org and request Surcharging. Our team will reply to confirm as soon as the feature is added.
Once it is available, you still need to turn it on and configure settings in order for it to start working. As a reminder, you must be an admin user to access the Settings tab in ClientPay.
- Go to Settings.
- Click the Surcharging tab.
- Read the Surcharging Agreement.
- Check the box agreeing to the rules and regulations.
- Enter a surcharge rate (must be less than 4%).
- Select which module(s)* should have surcharges added to customer-facing payment pages.
- Select where to deposit surcharges for each merchant account.
- Click Enable Surcharging to activate the feature.
Once you click the button, an automated email is sent to all admin users notifying them of the change. You will also receive a copy of the Surcharging Agreement by email for your records.
*Payment Pages does not appear in the list of modules in your Surcharging settings because they are considered to be a feature, not a module. Surcharging is automatically available as soon as Surcharging is turned on but not activated. You will need to go into each page individually to enable.
Enable Surcharging on a Payment Page
- Go to Payment Pages.
- Select the page you want to edit.
- Click Edit.
- Check the box next to Enable Surcharging in the Basic Information section.
- Scroll to the bottom and click Save.
What does it look like?
The surcharge amount and percentage are disclosed just below the Recaptcha box and above the Pay button. The button will confirm the total amount charged to your client's card (payment total + surcharge).
The example below is a 2.5% surcharge on a $1,500.00 payment.
Both payments will appear in the Payment Manager for reporting purposes. If you enabled the "Is Surcharge" column, you will be able to quickly identify if a transaction is the root payment or the surcharge payment.
Please note that if a root payment is refunded, you must also refund the surcharge payment in order to return all funds back to the cardholder.