How Can I Enable and Manage Credit Card Surcharges for Client Payments?
Enabling credit card surcharges allows you to pass processing fees to clients, helping to offset costs. Below is a comprehensive guide to understanding and managing surcharges in 8am.
Overview of Surcharging
Surcharging is a feature that adds a percentage fee to eligible credit card payments, allowing clients to cover processing costs. This feature is subject to compliance with state laws, card brand rules, and professional regulations. While surcharges help recoup costs, your firm remains responsible for paying the underlying processing fees.
Eligibility and Activation Process
To enable surcharges:
Submit a request to 8am support to activate the surcharge feature on your account by calling 800-459-5798 or emailing [email protected].
Confirm acceptance of the applicable terms and conditions.
Specify the surcharge percentage (up to 3% in most U.S. states, or lower where legally required). The percentage cannot exceed your actual cost of acceptance.
Once activated, the surcharge will appear on your secure payment page, Quick Bills, and invoices. It will be displayed in the subtotal after a valid credit card number is entered.
Rules and Compliance
Maximum Surcharge: Typically capped at 3% in most states.
Exclusions: Surcharges cannot be applied to: - Debit card payments - Trust account transactions - Scheduled payments, Card Vault charges, or recharged payments - Payments made via the mobile app or integrated partners (unless supported by the partner)
Compliance: Ensure adherence to state laws, card brand rules, and professional regulations. Notification to card brands is handled by the payment processor.
Payment Types and Exclusions
Credit Cards: Eligible for surcharges.
Debit Cards: Not eligible due to card brand regulations.
eChecks: May include a surcharge, commonly up to 1%.
Pay Later Transactions: Not eligible for surcharges.
Client Notification and Receipt Details
Clients are notified of the surcharge during checkout, where it is displayed separately from the base amount. Payment receipts also include a breakdown showing the original amount and the surcharge.
FAQs
Why am I still charged processing fees despite enabling surcharges?
The surcharge helps recoup costs but does not eliminate your responsibility for paying processing fees. The client’s full payment, including the surcharge, is deposited into your account, and processing fees are billed monthly.
Can clients avoid surcharges?
Yes, clients can avoid surcharges by paying with a debit card or eCheck.
What happens if I enable surcharges globally?
The surcharge will apply to all eligible credit card transactions. For specific cases, such as reimbursements, consider adding a line item instead of enabling global surcharges. By following these guidelines, you can effectively manage surcharges while ensuring compliance and transparency for your clients.
Who can use surcharge?
Anyone, except if your practice is in Connecticut, Massachusetts, Maine, New York, or Puerto Rico. There are laws against Surcharging in these states. To set up surcharge, call 800-459-5798 or email our support team to set up surcharge for specific processing accounts.
Can surcharges be set up for eCheck payments?
Yes. eCheck surcharge is now supported, allowing firms to apply compliant surcharges without interrupting their billing workflows.
How can I disable the surcharge for when I don't want a client to pay a surcharge?
You can request that our support team create a "No-Surcharge Payment Page" that you can send out to clients for this specific situation. You can call or email us to complete this request.
How do surcharges appear on my monthly statement?
There is no separate line item on the monthly statement for surcharges. The surcharge is added to the original transaction total and the full amount is deposited to the bank account. The firm needs to set aside these funds when billing time comes, then we debit these fees from the firms operating account.
Does my client get billed for the surcharge?
Surcharge is not a pass through processing fee, as stated above you receive the full deposit amount plus the surcharge amount. Enabling the surcharge feature does not mean your client pays for your processing fees, it means that when a client pays via credit card into your operating account, you will receive an extra % to cover the cost.