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Options to Help Offset Processing Fees


We recently surveyed our merchants for feedback to help make their processing more streamlined. One of the most requested solutions was for updated details on how to help offset processing fees. Below is a list of options that fall in line with card association regulations to consider when you are trying to offset processing fees.

We always recommend that you consult with your legal counsel to ensure that your choice is in line with all federal, state, and local laws, as well.

  1. Ask for Debit Cards

Debit card rates are considerably lower than normal credit card rates and Ascent Processing passes those savings along to you. 

Merchants that accept Amex are technically prohibited from “steering” consumers to a different payment product, such as debit. 

  1. Pass on to the owner all or part of the average credit card cost

To calculate the average credit card cost, take your total credit card volume and divide it by your total credit card fees.

  1. Booking Fees

You can charge a “booking fee” on every reservation. This can help offset credit card processing fees indirectly by bringing in additional revenue on every reservation. Specific regulations are listed below.

  • It must be a fixed amount, not a percentage
  • It must be charged on every reservation, regardless of payment method
  1. Cash Discounts

You can offer a discount to your guests that use a different means of payment, such as cash, check, ACH, or debit cards. Specific regulations are listed below.

  • The discount can be either a percentage or flat dollar amount
  • The advertised price MUST be the credit card price
  1. Convenience Fees

You can charge a “convenience fee” on credit card payments. This gets a little more complicated than the booking fee or cash discount options. The complete list of regulations is below.

  • It must be a flat fee (not a percentage)
  • It must be associated with a bona fide convenience in the form of an alternative payment channel (not just the convenience of using a credit card)
  • It must be charged on all forms of payment within the payment channel
  • You must accept some face-to-face credit card transactions AND
  • It can be assessed only on non-face to face transactions
  • It cannot be charged by a third party – only by the merchant that provides the good or service to the cardholder
  • It must be disclosed as a charge for the alternative payment channel convenience
  • It must be disclosed prior to the completion of the transaction with an option to cancel
  • It must be included as part of the total amount of the transaction and not collected separately
  • It must not be charged in addition to a surcharge
  • It must not be charged on recurring or installment transactions
  1. Surcharging

In 2013, the Visa and MasterCard regulations were updated to allow merchants to surcharge consumers for using their credit card. Federal and state regulations allow surcharges on credit card payments to cover transaction costs, but there are requirements that must be met in order to qualify. Failure to meet those qualifications could mean the removal of your merchant account. We’re the experts on the topic so you don’t have to be. Our team can ensure your business complies with all rules and regulations to keep you 100% compliant with our AscentZeroCost Surcharge Program.

  • If you accept Amex cards, you are effectively prohibited from surcharging on any transactions because of a competitive “level playing field” limitation
  • No surcharges on debit or pre-paid cards – you need to know if the card is a debit card before surcharging!
  • State laws trump the new surcharge regulations in states that prohibit surcharging.  Contact your legal counsel to check state’s laws.
  • Written notification to the card associations is required 30 days prior to imposing surcharges.
  • Notification is required to acquiring banks 30 days prior to imposing surcharges.
    • Contact Ascent Processing and we’ll help you notify your acquiring bank
  • There is a cap on the surcharge fee.
    • Fee can be no greater than your average discount rate for card type for the preceding one or 12 months, OR
    • Fee defined by SIC code – contact Ascent for help with the acceptable fee for your SIC code
    • Fee can never be greater than 4%
    • If you surcharge on more than one payment brand, you cannot assess a higher surcharge for one card brand than another. So, you must assess the lowest fee to all card brands surcharged.
  • Notice and disclosure to the consumer required
    • Point of store entry or online on 1st webpage that references credit card
    • At the point of sale/transaction
    • Dollar amount of surcharge must be broken out on receipt/lease agreement

If you have any questions on any of these options, please fill out the form on the right or contact us for more information.


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