Today there are businesses which apply credit card convenience fees in order to pass processing costs to cardholders and not to cover them on their own. Consequently, modern payment processing software should provide their consumers with convenience fee handling functionality. Let’s try to find out how this functionality can be added to a payment processing system.
At the very beginning you need to answer two significant questions, whether it is going to be implemented within your system or within some third-party system and how convenience fees are going to be charged. There the two options available; they can be charged as the part of the original transaction or as the separate one.
If you decide to process payment and convenience fee as a single transaction you should be aware of the fact that charging of convenience fees is allowed only under some specific merchant category codes. In case when funding of your merchant is handled by the third-party system convenience fees are going to be handled by this system too.
But if you decide to process payment and convenience fee separately, there are some other challenges which may occur. Should convenience fees be charged for declined transactions? Should convenience fee be transferred back to the merchant if transaction is cancelled? Or what should you do if there is not enough money to cover either the payment itself or the fee associated with it?
There is one more important aspect which you need to keep in mind. Convenience fees can be represented as the fixed amount, a percentage of the processed transaction or the combination of the two mentioned options. If you are interested in some more details you can read the publication at #UniPayGateway (which is available here). Also additional information on credit card convenience fees can be found in the articles at #Paylosophy (visit the blog).