B2B Credit Card Surcharging 101 [Excel Template]
What prevents your company from accepting credit card payments? High processing costs, surcharge laws, PCI guidelines, or something else?
This excel template has all the relevant information you need to know in order to roll out a surcharge program and welcome credit card payments. The template also includes tips on how to reduce interchange rates and improve customer experience, without compromising on the security of credit card data or breaking any surcharge laws.
Bonus – It has a Surcharge Calculator! Download Now!
Frequently Asked Questions About Surcharge
What is surcharging?
In every credit card transaction, whether B2C or B2B, a fee is imposed on merchants, including suppliers, to process the payment. Surcharging is the process by which the interchange fee is passed on to the customer who uses a credit card to pay an invoice.
What is the purpose of surcharge?
The purpose of the surcharge is to cover the interchange fee that the supplier is charged for processing a credit card payment. The supplier may not charge more than the average interchange fee, so this is not an opportunity to extract additional profits.
What is the maximum surcharge permitted?
The maximum surcharge cap for Visa, MasterCard, and American Express is 4%. The amount of the surcharge for each brand of credit card shall be that card brand’s lowest average of all the credit card brands, and shall be made available by the credit card companies for posting on the credit team payment portal, at surcharge.
Who must the supplier notify?
The credit card company rules require that notice of the surcharge policy be provided to
(1) the credit card companies, acquiring banks, and processors
(2) the customer prior to payment, and
(3) the customer as a line item in the invoice.
Any merchant (supplier) that surcharges Visa and MasterCard transactions must satisfy notification and disclosure requirements relating to Visa and MasterCard, the merchant’s banks, and the merchant’s customers. Merchants must notify Visa and MasterCard and their acquiring banks/payment processors of their intention to surcharge at least 30 days before surcharging begins, and must state whether they intend to surcharge at the brand level or product level.
What must the supplier disclose to customers?
The supplier must disclose the following to its customers:
1.The exact amount or percentage of the surcharge
2.A statement that the surcharge is being assessed by the supplier and is only applicable to credit-card transactions
A statement that the surcharge is not greater than the fee the card companies charge to the supplier
Is surcharging legal in every state?
Surcharging is illegal in Colorado, Connecticut, Kansas, Maine, Massachusetts, and Oklahoma.
What is a convenience fee?
Convenience fees are charged for the convenience of an alternative payment channel outside the Merchant’s customary payment channels.
What is the difference between a surcharge and a convenience fee?
The key distinction from a surcharge: a convenience fee is not a charge for using a card, it is a charge incurred for using a payment method that normally would not be used for such a product or service.
Can surcharge be applied on debit cards?
You must never surcharge a debit card or a prepaid card, only credit cards.