This article describes the types of fees you can apply, the components of a fee, and the fee collection process. See Set Up Fees for information on how to set up and configure fees in your portfolio.
Fee Types
You can create customized fees for your portfolio in addition to customizing existing merchant processing fees. The following table describes the most common fee scenarios:
Fee Type | Description | Scenario |
|---|---|---|
Boarding Fees | Collected from your merchants as they onboard to the platform | As a partner, you want to charge a Fee to your merchants for boarding and whenever they board sub-merchants. This fee helps you generate revenue from merchants boarding under your portfolio, even if the merchant ultimately has little or no activity after boarding. |
Chargeback Fees | Collected for managing merchants’ dispute responses | A merchant receives an initial dispute opening the chargeback process, also known as Retrieval. When a chargeback fee is configured and Retrieval is chosen as the fee schedule (trigger), the merchant will be assessed a fee when the chargeback cycle is opened and dispute stage is Retrieval. |
Convenience Fees | Collected from cardholders for alternative payment method acceptance | A merchant that typically accepts in-person and over-the-phone/mail order payments. The cardholder requests to make a payment using the merchant’s website to send a card-not-present payment. As the website is not the primary method accepted by the merchant, they can charge a convenience fee to the cardholder. |
Interchange and Processing Fees | Collected to reimburse interchange and other costs assessed by the processor or card brands | You want to pass along the cost of acceptance for debit and credit card interchange to your merchant. |
Platform Service Fees | Collected for enabling payment acceptance for merchants using your platform | The payment acceptance platform you offer comes at a cost to the merchant, usually in the form of monthly service plan costs or subscription costs. As the merchant has agreed to your platform’s terms and conditions, it accepts the costs setup as a Monthly Fee Schedule, eliminating the need for a third-party billing solution. |
Risk Decision Fees | Collected for triggering automated Risk Decision on an entity | You want to charge a merchant when the platform risk service performs an automated transaction check. This happens when specific risk criteria are met and delay the disbursement of transaction funds in addition to fraud and risk compliance concerns. As a result, you charge a fee when these events occur to actively discourage the merchant from high-risk transaction actions and behaviors. |
Risk Service Fees | Collected for usage of third-party risk services, like GIACT | You want to assess fees to your merchants to cover the costs of external risk services they use to ensure their compliance. These services could include OFAC checks, personal credit pulls, or other necessary risk items needed for boarding or ongoing risk reviews. |
Surcharge Fees | Assessed to credit card transactions by merchants to their customers as an additional charge to cover specific costs associated with credit card processing | The payment acceptance platform you offer assesses a 3% surcharge to merchants for processing credit-only transactions to offset associated processing fees. As a result, you enable each of your merchants to collect this surcharge from their customers using credit cards. |
Transaction Fees | Collected when transactions are authorized or captured | Your payments service uses flat-rate pricing to combine the discount rate with a fixed per-item fee, commonly stylized as 3% + $0.10 per transaction. |
Value-Added Service Fees | Collected for enablement and usage of Value-Added Services like Omnitoken and SaferPayments | You enabled the Account Updater service for your merchants. Each time a merchant’s customer has their tokenized information automatically updated, you can charge a fee. This fee can reflect the exact cost outlined in the Account Updater service agreement or include a markup to cover platform overhead or generate revenue. |
Fee Structure
A fee’s structure includes required configuration details and optional advanced settings. A fee consists of the following core components:
Entity or Group: The entity or group being monitored and charged.
Schedule: The time or event that triggers the fee.
Rules: Optional conditions that refine the schedule.
Modifiers: Optional adjustments about the paying entity or markup.
See Overview of Entities for information about entities and groups. The following sections describe the remaining components in detail.
Fee Schedules
Fee schedules, also known as fee triggers, provide the logic necessary to initiate the assessment of a fee to a merchant. Various fee schedules are available. Some are time interval-based and others are event-specific, which are assessed in real-time based on the scheduled event. An example setup would be an Auth fee that is incurred when a transaction is authorized on the platform. However, when you set up a date-specific fee, such as a monthly or yearly service fee, this incurs on the date specified when creating the fee.
The fee schedule serves as the approval necessary for a fee to be charged. Fee schedules fall under one of the following categories:
Time interval: Recurring time intervals act as the schedule that triggers the fee charge.
Event specific: Action or event occurrences act as the schedule that triggers the fee charge.
Risk event: Compliance action or event occurrences act as the schedule that triggers the fee charge.
Third-party service: Off-platform service costs act as the schedule that triggers the fee charge.
See descriptions of each available fee schedule and trigger in Reference: Fee Schedules.
Fee Modifiers
By default, when you set up a fee, it is applied directly to the merchant and paid to your available balance. Another fee customization is the ability to configure the entity liable for a specific fee. By setting up fee modifiers, you can change who is paying the fee. As an example, if you have a fee that you want to charge to one merchant based on the activity of another account, such as if they were linked businesses, you can set up a fee modifier so that when one merchant triggers a fee, the funds are taken from a different merchant entity.
Note
If you adjust or modify a fee, this can impact how the merchant is charged. For example, if you have a monthly fee set to apply on the first of the month and update it to the fifteenth, the merchant can potentially incur two monthly fees if you make this modification in between the original and new trigger dates (for example, if you make this change on the seventh of the month).
Additionally, if you wanted to change a fee type from authorization to capture, you would need to time this change after the batch has closed so the merchant does not incur multiple fees.
Use fee modifiers to set a specified entity as the payer for a specific fee and whether the final fee amount paid by the chosen entity is marked up. See Add Fee Modifiers for more information on applying fee modifications.
Fee Rules
Fee rules apply a fee only when certain conditions are met, such as fees by individual, total transaction amount, or CVV and AVS results. You can set up pricing that is tailored to your merchants and offer optimized rates based on payment best practices, such as reduced rates for card-present transactions or transactions that have a full CVV and AVS authorization.
Use fee rules to refine your fee schedule requirements for specific criteria to be met before charging a fee to the assigned entity. See Add Fee Rules for more details about available fee rule options and how to apply them.
Fee Collection Process
Any fee created, assessed, and charged is recorded as an entry to track who is paying or receiving the fee charge. The following outline describes the general process for a fee collection:
When an active fee is applied, it creates an entry with a Processed status to immediately debit the amount from the entity paying the fee.
Both the paying and receiving entity see a new entry listed on their Balance Details page.
The paying entity sees a negative amount matching the fee total.
The receiving entity sees a positive amount matching the fee total.
When the fee’s entry has completed processing and is no longer in a Pending status, the receiving entity can add the newly available amount to a payout schedule.