Surcharge
Surcharge is an additional fee added to a transaction on top of the base price of a product or service. In payments, surcharges are commonly applied to cover processing costs, taxes, or specific service fees. They must comply with local regulations and rules, and merchants are required to clearly disclose them to customers before the transaction is completed. Surcharges can be fixed amounts or percentages of the total price. They are usually imposed to generate additional revenue or offset higher commodity prices or regulatory fees.
Examples:
- Adding a 2% processing fee for credit card payments.
- Applying extra charges for weekend deliveries.
- Government-imposed environmental or regulatory fees.
Considerations for merchants:
- Surcharges should be applied consistently and only to permitted payment methods.
- Overcharging or hidden fees may lead to disputes or fines.
- Merchants should regularly review surcharge policies to remain compliant with local laws and card network rules.