What is Surcharging?
Surcharging is the practice of adding a fee to credit card transactions to help businesses cover processing costs. Instead of absorbing these fees, businesses pass them on to customers who choose to pay with a credit card. Surcharge fees apply only to credit card transactions—they do not apply to debit card payments.
Why Use Surcharging?
Credit card processing fees can add up quickly, cutting into your bottom line. By applying a surcharge, businesses can recover these costs while still offering the convenience of credit card payments.
How Does It Work?
A customer pays with a credit card – Instead of charging the full sale amount, the system automatically adds a surcharge (typically a percentage of the total).
The customer is informed – Regulations require businesses to disclose surcharges before payment is processed.
The fee is passed on – The surcharge covers the credit card processing cost, reducing expenses for the business.
How much is the the Surcharging fee?
A surcharging fee of 3.30% + $0.20 is applied to all credit card transactions processed through Canopy Payments. Clients will see this fee clearly displayed when issuing a payment. This fee does not apply to debit card transactions.
Are Surcharging fees refundable?
If the transaction is refunded to the client, the processing fee will also be refunded to the client.
Do Surcharging fees apply to recurring invoices?
Surcharging fees only apply to credit card transactions that are generated through Engagements with recurring billing enabled.
If a recurring invoice is created outside of an Engagement, surcharging fees will not be applied to any of the associated transactions.
Is It Legal?
Yes, but compliance is key. Surcharging is allowed in most U.S. states, but businesses must follow specific rules, such as:
Transparent disclosure: Customers must be notified before completing a purchase.
Debit card restrictions: Surcharges can only apply to credit card payments, not debit cards.
Fee limits: The surcharge cannot exceed the actual processing cost (typically up to 4%).
How Do I Enable Surcharging in My Account?
Surcharging requires the Time and Billing license, as well as enrolling in payment processing through the Billing Settings tab. To enable surcharging, check out our step-by-step guide Enable Surcharge for Client Portal Payments here!