Glossary

Surcharge

Surcharge refers to an extra fee imposed on a customer for using a payment card to make a purchase under certain circumstances. This fee is added to the purchase amount and is typically a percentage of the total transaction value. Surcharges are intended to help merchants offset the cost of processing payment card transactions, which can vary based on the type of card used, the transaction method, and other factors. There are different types of surcharges, including customer surcharges, which are added to the customer's bill when they pay with a credit card, and non-qualified surcharges, which are additional fees charged to merchants for processing non-qualified transactions that do not meet specific criteria set by the payment processor.

Surcharge practices are regulated by various payment card networks and government authorities. Merchants must adhere to specific rules regarding disclosure, the amount of the surcharge, and how it is presented to customers. For instance, merchants in some regions are required to inform customers of the surcharge before completing the transaction and to display the surcharge amount separately on the receipt. Surcharges can affect both customers and merchants. While surcharges can help merchants recover processing costs, they must balance this with the potential impact on customer relations. Transparent communication about surcharges is essential to maintain trust and avoid negative customer experiences.

Surcharges are generally calculated as a percentage of the total transaction amount, with the percentage varying based on the payment card type and the policies of the payment processor. Best practices for merchants include clear disclosure of surcharges to customers before completing transactions, ensuring compliance with payment card network regulations and local laws, and proactively communicating surcharge policies to avoid misunderstandings and maintain trust. Proper management and communication of surcharges are essential for maintaining customer satisfaction and regulatory compliance.

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