2021 Convenience Fee Rules Explained

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Credit card convenience fees 2021 rules explained. Visa rules on convenience fees as outlined in Table 5-5 Convenience Fee Requirements remain unchanged since 2020.

What’s a convenience fee and when can I use it? Convenience fees can only be charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant’s customary payment channels and not charged solely for the acceptance of a Card. If a merchant only accepts credit cards, it’s prohibited. Alternatively as an example, if a merchant gets 99% checks in the mail, ACH, and wire, they could be eligible to charge a convenience fee.

The following are all elements that can impact whether you can charge a convenience fee:

  • Federal law
  • State law
  • Rules of card acceptance, for example, Visa Core Rules
  • Merchant acquirer (credit card processor)

Who can and cannot charge a convenience fee?

  • If the Merchant operates exclusively in a Card-Absent
    Environment, cannot charge a convenience fee.
  • Convenience fee can only be charged by the merchant that provides the goods or services to the cardholder, not a third party.

Visa convenience fee rules excerpts:

  • Cannot be charged on a Recurring Transaction or an Installment Transaction.
  • Must be listed as a separate line item on the receipt.
  • Must be included with the total transaction. In other words, the receipt must split out the amount, but only one transaction is sent.
  • Added only to a domestic Unattended Transaction. In other words, customers self-pay.
  • Must be disclosed to customers as a charge for alternate payment channel convenience.

How much is allowed for a convenience fee?

Per Visa, the convenience fee must be a flat, or fixed amount, regardless of the value of the payment due. There isn’t a limit on the amount and a merchant may choose to dynamically generate the convenience fee amount. Regardless, the consumer must be able to opt-out prior to completing the transaction.

See Visa Core Rules Table 5-5: Convenience Fee Requirements for more information. Note, this is a change from the 2018 blog post.

Rules may vary by card brand, but typically, if a merchant complies with Visa rules, they’ll be compliant with the other brands. A convenience fee is not the same as a credit card surcharge for Visa, which also has another type called a service fee,which applies to government and education only.

Call Christine Speedy, PCI Council QIR certified, for simple solutions to complex payment transaction problems, 954-942-0483, 9-5 ET. CenPOS authorized reseller based out of South Florida and NY. CenPOS is an integrated commerce technology platform driving innovative, omnichannel solutions tailored to meet a merchant’s market needs. Providing a single point of integration, the CenPOS platform combines payment, commerce and value-added functionality enabling merchants to transform their commerce experience, eliminate the need to manage complex integrations, reduce the burden of accepting payments and create deeper customer relationships.

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