This article details a specific payment practice referred to as "surcharging" whereby credit card processing fees can be passed on to the end customers.
What is a credit card surcharge?
A credit card surcharge is an additional fee that is imposed on customers who choose to pay for their purchases using a credit card. This fee is specifically designed to cover the costs incurred by the merchant in processing the credit card payment.
When customers receive their invoice, the surcharge (3%) is clearly displayed as a separate line item, and it is added to the total amount charged.
For instance, if you charge a customer $100 for lessons on opus1.io, the end user will see a total of $103 on their bill, which includes the estimated credit card surcharge of $3. As a merchant, you will receive funding of $100.
Is surcharge supported by Opus1.io?
Yes. However, there are limitations and restrictions. Please make sure to review this F.A.Q thoroughly before deciding whether to adopt a surcharge model.
Opus1.io supports the surcharge model:
- In the United States only
- With Clover Connect / Fiserv (not Stripe)
- Credit Card surcharge is a flat 3% for all eligible transactions
Is it legal to add a credit card surcharge?
Yes, it's legal in most U.S. states to add a credit card surcharge, but there are exceptions and restrictions that businesses must follow. It is important for merchants to adhere to state laws and card network regulations when implementing a surcharge.
For example, some states prohibit or restrict the ability to charge credit card surcharges. In those cases the customer cannot be charged a credit card surcharge and the processing fees will be charged to the merchant.
Merchants are required to explicitly warn the payer about the surcharge prior to the purchase.
Opus1.io's integration with Fiserv / Clover Connect automatically determines if a card is eligible for surcharge. This also requires the Zip Code.
Credit cards that were migrated from another payment processors without zip code / postal code will not work when surcharging is enabled. End users will be required to update their credit cards in Opus1.io and add their zip codes for payments (manual or automated) to process successfully.
Can surcharges be assessed on debit card transactions?
No, surcharges are generally not allowed on debit card transactions. They are permitted only on credit card payments.
Opus1.io's surcharge implementation automatically determines if a card is a debit or credit card (and if the credit card is from a state where it is allowed / legal) and only adds the surcharge for credit cards.
When end users use debit cards, or cards from states where surcharging is not legal, no surcharge fees will be assessed. Processing fees will be charged to the merchant instead.
Is it recommended to add credit card surcharges?
It depends on your business model and customer base. While it can offset processing costs, it might also dissuade some customers from making purchases or choose to use other payment methods (like check or cash).
Consider the potential impact on customer relations and the overall customer experience. It is important to note that customers generally prefer not to feel burdened with additional charges.
As a best practice, we recommend including credit card processing fees in your standard pricing, along with all other costs associated with your business, such as rent and teacher compensation.
Implementing surcharges may lead some customers to opt for alternative payment methods like cash or check, which can result in additional overhead for your business and the need to manage late payments. It is essential to evaluate whether the benefits of surcharging outweigh the potential drawbacks for your specific business model and customer base.
Does Opus1.io handle credit card surcharging, and how?
If you opt for using surcharge, Opus1.io, in partnership with Fiserv / Clover Connect, can facilitate credit card surcharging.
- The proper warnings are shown to end users in the self-booking interface ("3% credit card fee may be assessed")
- The surcharge is added to the quote (estimated amount based on 3%),
- Once the transaction is successful the exact surcharge amount is added to the invoice & visible on the receipt sent to the payer
How Can I Turn Surcharge on for My Opus1.io Account?
To enable surcharging, contact our payments team at finance@opus1.io.
Additional useful resources about surcharge and disclosure requirements can be found here: