Lower Your Costs With Convenience Fee Programs

With the cost of gas, supplies and overall business becoming more costly, business owners are looking for ways to reduce expenses. One of the most popular and frequently discussed solutions in the payment industry is the use of convenience fees to offset card cost.


Convenience Fee

Under this program, a fee is added to the transaction and incurred by the cardholder. The fee is set at a rate that covers the cost of the transaction, usually 3.50%. The convenience fee is applied to all card transactions, giving you the added funds you need to pay your credit card processing cost in advance of the bill.

  • Example: $100.00 sale with a 3.50% surcharge. Your merchant rate remains the same and you pay card processing fees on your program for the entire transaction.
  • The cardholder receipt will display a net sale of $100.00, convenience fee of $3.50, and total amount to be billed at $103.50.
  • Under the convenience fee program, you are collecting the fees. You would receive $103.50 as part of your deposit.
  • We are not an accountant, nor an attorney. The money received would be reported as income, taxable and you will still receive your normal monthly merchant billing.
  • Franchisors will have to decide whether convenience fees collected are subject to royalties. If you do decide perhaps, we raise the convenience fee an additional .25%, increasing the cost to 3.75% to cover the additional royalty expense.


Is It Legal?

  • Convenience fee programs are perfectly legal in all states except for Connecticut, Massachusetts and Puerto Rico.
  • The convenience fee will have to be disclosed on the cardholder receipt.
  • It is recommended that the invoices clearly display a message that when paying by cash or check, there are no additional fees, and that payment by card will result in a 3.50% (or 3.75%) convenience fee, for example.


How Can FPN Help?

  • The convenience fee is available on your payment form. Currently the convenience fee is not available for recurring payments or normally daily transactions.
  • FPN requires a signature to initiate the program and an additional $10.00 per month will be added to facilitate and support the feature. Please keep in mind, you are collecting enough in the convenience fee to offset your card costs (sometimes, and then some).
  • The process to add the fee will only take two business days to complete and the billing will go into effect the following month, billed monthly.


Have questions on payment strategies specific to your business? Contact FPN today!