Posted by Jeff Shavitz on Thu, Feb 11, 2010 @ 04:11 PM
Internet merchant accounts are fast becoming the most popular merchant accounts due to the e-commerce boom. Internet merchant accounts are also being utilized by business that require portability and easy access.
Internet Account Qualifications
Internet merchant accounts are most commonly utilized by web-based e-commerce businesses, but may also be used by other business types. Unlike a retail merchant account where a business is expected to have a credit card present at the point of sale, an Internet merchant account is a card-not-present account (CNP). An Internet merchant account is considered a relatively high-risk account and will carry higher merchant account fees than those of retail, lodging, and grocery accounts. It is this higher risk that would allow a retail business to downgrade their account to an Internet account, but would prevent an Internet business from upgrading their account to a retail account.
Account Guidelines for Internet merchant accounts are more strict due to the higher risk factor associated with the accounts. Many processors will have guidelines that govern if and when a business will be able to obtain an Internet merchant account. Some of the businesses that would be unable to obtain an Internet merchant account fall into the high risk merchant account category and will have to search for a processor that is able to meet their needs. Some processors may also place age restrictions on acceptance where a business must be at least a year old before they are able to obtain an account.
Internet merchant accounts are also more likely to require rolling reserves or ACH delays for approval.
Business Types & Usage
Internet merchant accounts are most popular among e-commerce businesses that utilize a gateway and virtual terminal to process online transactions from a web site. A shopping cart is linked from the web site to the gateway to process real-time transactions and the virtual terminal is used to process mail or phone orders.
A gateway or virtual terminal allows a merchant to process credit card transactions from any computer with Internet access. Laptops with wireless Internet connections have become popular with many small businesses that require portability but cannot afford the up-front cost and monthly fees of a true wireless merchant account. By bringing a laptop with Internet capability to craft or trade shows or a new market is quickly discovering the convenience of processing credit card transactions online.
Account Set-UpThe thought of acquiring an Internet merchant account can be very intimidating to some business owners because of the implied technical know-how that the accounts emulate. In fact, acquiring and using an Internet merchant account is very easy. Linking the gateway to a shopping cart to enable real-time transactions is also something that someone with minimal technical know-how can accomplish. Gateway providers and most processors have customer service available to assist with integration and set-up of an account and gateway.
For more information on Internet Merchant Accounts or to find out if you are paying the lowest possible rates on your merchant account,
click here for a free rate analysis. Article courtesy of:
MerchantCouncil (www.merchantcouncil.org)
Posted by Jeff Shavitz on Tue, Jan 26, 2010 @ 09:04 AM
Figuring out how much a new merchant account will cost your business in credit card processing fees starts with something called the "effective" rate. The term effective rate is used to refer to the collective percentage of gross sales that a business pays in credit card processing fees.
For example, if a business processes $10,000 in gross credit and debit card sales and its total processing expense is $329.00, the effective rate of this business's merchant account is 3.29%. The qualified discount rate on this account may only be 2.25%, but surcharges and other fees bring the total cost over a full percentage point higher. This example illustrate perfectly how focusing on a single rate when examining a merchant account can prove to be a costly oversight.
The effective rate is the single most important cost factor when you're comparing merchant accounts and, not surprisingly, it's also one of the most elusive to calculate. When shopping for a merchant account, the effective rate will show you the cheapest merchant account option. And after you start accepting credit cards it will allow you to calculate and forecast your total credit card processing expenses.
Calculating the effective rate of a merchant account for an existing business is easier and more accurate than calculating the effective rate for a new business because figures are based on real credit card processing history rather than forecasts and estimates.
That's not to say that a new business should ignore the effective rate of a proposed merchant account. It is still the most important cost factor, but in the case of a new business the effective rate should be interpreted as a conservative estimate.
It's pretty simple to calculate the effective rate for an existing merchant account. All you need to do is figure out the percentage of expenses over gross credit and debit card sales. To do this, divide your gross sales by your total processing costs for a given month and then multiply that number by 100. For example:
$10,000 in sales / $329 in fees * 100 = 3.29%
If the effective rate ends up being substantially greater than your qualified discount rate, it's time to examine your account and make money-saving adjustments. Using the example above, let's say the qualified discount rate for this account is 1.69%. That would mean the effective rate of 3.29% is more than double the qualified discount rate. In a situation like this, the chances are very good that there are a lot of mid and non-qualified surcharges being applied.
If you notice a large discrepancy between the qualified rate and the effective rate of your merchant account, call your provider and inquire how the gap can be closed.
To calculate the effective rate for a new merchant account from existing credit card processing history, apply your business's processing statistics such as the percentage of mid and non-qualified transactions, PIN debit transactions versus signature, etc, to the rates and fees of the new account. This will yield a pretty accurate estimate of the cost associated with the new merchant account.
Calculating the effective rate of a merchant account for a new business is a little tougher because of inconsistent buckets, and the lack of credit card processing history from which to judge how a business's transactions will qualify. Nevertheless, making a conservative estimate of an account's effective rate is still vital.
To calculate the effective rate of a merchant account for a business without credit card processing history you will need to estimate a few figures such as the business's average ticket, processing volume, whether a PIN pad will be used to accept online debit transactions and more.
Any merchant account provider that's courting your business should be able to speak with you to gather the information they need to offer you a reasonably accurate effective rate. If they're unable to do this or they don't know what an effective rate is, they're probably not the best candidate for your new merchant account provider.
Article courtesy of: Merchant Council (www.merchantcouncil.org)
To learn more about effective rates or to find out if you are paying the lowest possible rates on your merchant account, click here for a FREE rate analysis.
Posted by Jeff Shavitz on Thu, Jan 21, 2010 @ 01:24 PM
A store and forward merchant account is not actually a specific type of merchant account by itself. The term "store and forward" refers to the way a credit card is processed using special equipment.
Store and Forward Explained
"Store and forward" refers to the process of using a special credit card machine to store a swiped credit card transaction in order to electronically send the data to a processor a later time.
Special credit card machines are able to store credit card information within their memory so that it may be sent to the processor once there is access to a telephone line or wireless signal.
Credit card machines that are able to store and forward also have built-in printers making it possible to swipe a customer's credit card and provide them with a receipt.
Benefits of Store and Forward merchant processing:
Low Rates and Fees - Store and forward technology makes it possible to obtain an electronic data capture without having to utilize a more expensive wireless merchant account. In most cases, processing credit cards with store and forward technology will allow you to qualify for the same low rates offered for a retail merchant account.
Lower Equipment Costs - The only other way to acquire a retail swipe rate while mobile would be to utilize some sort of wireless merchant account. Although great for some businesses, wireless merchant accounts can be cost-prohibitive for new business because of the high prices of wireless credit card machines. Credit card machines that are capable of store and forward are often half the cost of a wireless credit card machine.
Professionalism - Store and forward credit card terminals have built-in thermal printers allowing a merchant to swipe a credit card and provide the customer with a receipt all without access to a phone line or (with some terminals) a power source. Using this sort of technology gives a professional appearance to any business.
Drawbacks of Store and Forward Merchant Processing:
Inability to Obtain a Real-Time Authorization - Store and forward technology does not give you the ability to tell whether or not a credit card is good or bad the second you swipe it. You will not know if the transaction was good until you have access to a phone line making it possible to transmit the transaction information to the processor. The inability to obtain a real-time authorization is the main downfall of utilizing store and forward technology to process credit cards.
Many merchant who use store and forward to process their transactions will perform a voice-authorization if they are uncertain about the validity of a transaction, or if the transaction if for a large sum of money.
Popular Business Types for Store and Forward processing
Generally, store and forward processing is used by businesses that have a need for portability, have a low occurrence of declined transactions, have repeat dealings with the same customer, have a lot of repeat customers, and for businesses where store and forward is more cost-effective than wireless processing.
Tradespeople - Store and forward processing is often ideal for tradespeople. Businesses that deal with renovation, construction, decorating, interior design, etc. are perfect candidates for store and forward processing. The nature of their business often requires repeat contact with the same customer making a declined transaction a minor inconvenience instead of a financial burden. These business types also tend to have a high average ticket making the low retail merchant account rates associated with store and forward very appealing.
Craft Businesses/Home parties - Crafters and home-party businesses often consider store and forward as an option. However, these businesses have to use a little more caution because they often have only a single contact with their customer and would have no chance to recoup losses if a transaction were to be declined. Lower retail merchant account rates and lower monthly fees make store and forward a good alternative to Mail order telephone order merchant accounts (MOTO merchant accounts) or wireless merchant accounts if the risk is supported by the savings.
As the demand for store and forward continues to grow, more credit card machine manufacturers will begin to build to store and forward technology into their terminals. Currently, Lipman commands the vast majority of the store and forward market. Lipman also manufactures wireless terminals that are able to store transactions when cellular service or a phone line is not available and forward the transaction at a later time.
Article Courtesy of:
Merchant Council (www.merchantcouncil.org)
For more information or to find out if you are paying the lowest possible fees on your merchant account, click here for a free rate analysis.
Posted by Jeff Shavitz on Mon, Jan 18, 2010 @ 09:10 AM
MOTO Merchant Account Details
Mail order merchant accounts, or mail order telephone order (MOTO) merchant accounts are utilized by card not present businesses (CNP). MOTO merchant accounts carry the same risk factor as an Internet merchant account, and therefore usually have the same rate and fee schedule.
Any business that transacts the majority of their credit card sales when the customer is not present, and does not have the need for real-time Internet transactions is an ideal candidate for a mail order merchant account.
MOTO Merchant Account Qualifications, Rates & Fees
Credit card processors impose stricter guidelines on mail order merchant accounts, and the accounts can be more difficult to obtain than retail merchant accounts.
Some processors will not accept mail order businesses that are less than a year old, and those that will often have higher rates and fees. However, there are a few processors that will underwrite a new MO/TO business if they agree to a merchant account with a contract. Keep in mind that contracts are not always the best thing for a new business.
Where processing quotes for a retail merchant account may remain more steady from processor to processor, mail order merchant account quotes may tend to vary more widely. The main reason for this is the higher risk factor and unwillingness of some processors to underwrite the accounts at all.
Article Courtesy of: MerchantCouncil (www.merchantcouncil.org)
For more information on MOTO Credit Card Processing or to find out how much money you can save by switching to CCS, click here for a free rate analysis.
Posted by Jeff Shavitz on Thu, Jan 14, 2010 @ 10:45 AM
Wireless payment devices have become THE critical component in the emerging mobile commerce system. The ability to expand locations and services without the expense of a wired infrastructure can turn a businesses' point-of-sale into their point-of-profit.
A wireless merchant account is an account that enables a merchant to transact credit cards using a mobile system and acquire a real-time authorization. Typically, a wireless credit card machine is used to obtain such authorizations.
Different Types of "Wireless" Merchant Accounts
A wireless merchant account is often thought of as a merchant account that utilizes a portable terminal to transact credit cards on the go. Although this is the most common wireless merchant account, there are actually different types of wireless merchant accounts that allow a merchant to charge cards while on the go.
Wireless Merchant Account (terminal)
The most popular way of acquiring a credit card authorization while on the move is by using a wireless credit card machine. By using a wireless credit card terminal, a merchant is able to swipe a credit card, acquire an authorization or decline in real-time, and print a receipt for their customer while mobile.
Touchtone Telephone Merchant Accounts
Touchtone telephone merchant accounts also allow a merchant to acquire a real-time authorization while on the go. Touchtone telephone merchant accounts allow a merchant to use a cell phone to dial into an automated network to transact credit cards.
Aircharge Wireless Processing
The Aircharge wireless processing system allows a merchant to attach a card reader to their cell phone allowing merchants to swipe credit cards and transmit data to a processor over a cellular network. This technology seems very promising, and we are currently investigating its practicality, reliability, and functionality.
Content Courtesy of: MerchantCouncil (www.merchantcouncil.org)
For more information to find out how much money you can save by switching to CCS for credit card procesisng, click here to get a FREE RATE ANALYSIS today.
Posted by Jeff Shavitz on Tue, Jan 12, 2010 @ 01:59 PM
Retail merchant accounts carry the least amount of risk to the credit card processor. Because retail merchant accounts are considered low-risk, they are given the lowest rates and fees.
In order to find the best merchant account you should first learn how the different qualification rates will affect your business.
Retail Merchants
In order to qualify for a retail merchant account a business must be able to transact the majority of their credit card sales by swiping a customer's card through a credit card machine. This act is referred to as electronic data capture. Most processors will require a merchant to transact at least 80% of their sales via electronic data capture to qualify as a retail merchant.
Retail Credit Card Processing Rates
Retail merchant accounts pose the least amount of risk to a processor and therefore carry the lowest qualified discount rates. The qualified discount rate will only apply to transactions that are run using electronic data capture (swiped transactions). Any transaction that must be keyed-in will run at a mid or non-qualified rate.
If you will not be swiping the majority of your transactions you should not apply for a retail merchant account due to the downgrading of transactions described above. Instead, you should apply for a mail order merchant account.
If you are a retail merchant you should also give some thought to purchasing a pin pad in order to run debit cards at a flat per transaction rate. Knowing when to use each card can save considerable money.
Retail Merchant Sub-Categories
Certain business types qualify as retail merchants because they swipe the majority of their credit card transactions, but are assigned separate merchant accounts due to an inherent high or low risk associated with the business type.
Lodging businesses such as hotels, motels, and bed-and-breakfast establishments must utilize a lodging merchant account for their processing needs.
Grocery stores are able to utilize a grocery merchant account which has the lowest rates and fees of almost any merchant account due to the inherent low chargeback rate in the grocery industry.
Article courtesy of: Merchant Council (www.merchantcouncil.org)
To learn more or to find out how much you can save on a retail merchant account, get a free rate analysis from CCS today.
Posted by Jeff Shavitz on Mon, Jan 04, 2010 @ 03:56 PM
PCI Compliance Explained. For more information on PCI Compliance or to find out how much you can save on credit card processing fees by switching to CCS,
click here for a free rate analysis.
Posted by Jeff Shavitz on Mon, Dec 21, 2009 @ 03:19 PM
Paying close attention to your credit card processing expenses is a must, but sometimes even the most conscientious merchants miss some not-so-obvious costs. Below are three common processing expenses that you may be paying without even realizing it.
Processing fees aren't returned when you refund a credit card purchase.
When you charge a customer's credit card, you pay a discount rate and transaction fee to your merchant account provider to process the transaction. When you refund a credit card purchase, your provider does not return those fees. Depending on the type of business that you have, lost merchant account fees from credit card refunds can be substantial and you may not have considered it.
Let's use a hypothetical retail store as an example. If our make-believe store has card-present merchant account rates of 1.7%, a transaction fee of $0.25, an average ticket of $50 and an average of ten credit card refunds per month - they'll lose $11 every month in processing fees dues to refunds. That's also assuming that all of those transactions ran at a qualified rate. Common mid and non-qualified surcharges would make the loss even greater.
If you haven't considered how losses due to credit card refunds are affecting your business, sit down and crunch the numbers as soon as possible. You may be surprised at the results.
You're paying mid and non-qualified surcharges.
When credit card transactions downgrade a mid or non-qualified surcharge is added to the regular qualified discount rate. Many processors express surcharges as a separate fee on their merchant account statements and they charge them at different times of the month. Qualified charges are commonly deducted from credit card transactions throughout the month and surcharges are assessed in a lump sum at the end of the month.
The lump sum amount that's deducted for surcharges is expressed as a single large fee on the merchant processing statement. This leaves many merchants thinking that their total processing charges are represented by the surcharge amount that they see on their statement when in fact this is only a portion of total charges.
In order to realize you're total credit card processing expenses, you have to add the fee charged at the end of the month for downgrades and surcharges to the qualified discount charges that are deducted throughout the month.
It's tough to generically explain how to read merchant account statements because each processor and provider has a different layout and charge structure. If you're having trouble reading your merchant processing statement, it's best to call your merchant account provider for assistance.
You're being surcharged for a monthly minimum.
Merchant accounts often have a confusing charge called a merchant account monthly minimum fee. The monthly minimum dictates the amount of fees that a processor must collect from a merchant in a monthly period. For example, if a merchant account has a monthly minimum of $25 and the merchant's processing fees for a given month are only $15, a surcharge of $10 will be assessed to bring total charges up to the $25 monthly minimum amount.
If your business has a slow or seasonal downtime, you may be paying a monthly minimum surcharge without realizing it. Check your merchant processing statement and the schedule of fees for a monthly minimum fee. If you do have a minimum that's affecting your charges, call your provider to see if the fee can be lowered or even waived.
Article courtesy of: MerchantCouncil (www.merchantcouncil.org)
For more information on Credit Card Processing expenses or to find out if you are paying the lowest rates on your merchant account, contact CCS for a no-cost, no-obligation rate analysis.
Posted by Jeff Shavitz on Tue, Dec 15, 2009 @ 09:07 AM
When it comes to merchant accounts and credit card processing, knowledge and tools translate directly to valuable money saved. Take the time to educate yourself about different rates and fees, work with prospective providers and ask questions.
Personal Credit & Merchant Accounts
A merchant account is essentially an open line of credit that is issued to a merchant by an acquiring bank.
Bankruptcy - If you are in active bankruptcy a processor will likely decline your application. If you've had a bankruptcy that has discharged you should be able to obtain a merchant account assuming that you have re-established your credit since the bankruptcy has been discharged.
Collection Accounts - If you have debt that has gone to collections a processor will likely deny your application for a merchant account. You should be able to get an account after the collection reports are reconciled and the notifications have fallen off of your credit.
Lack of Credit History - A processing bank does not need to see multiple satisfactory lines of credit or a ten-year credit history to approve a merchant account application. However, they do need something on which to base credit-worthiness. If you don't have any credit history whatsoever a processor will likely deny your application for a merchant account.
If you fall into one of the categories above, don't give up. Some providers specialize in helping merchants with less than perfect credit. The most important thing is to be honest about your credit standing with providers up front. This will save time and energy in the long run because you won't waste time working with providers that can't get you approved.
Declaring the Correct Credit Card Processing Limits & Tickets
Failing to declare the correct processing volume, average ticket amount, and transaction percentages on your merchant processing agreement can cause significant headaches and may result in your merchant account being terminated or worse. Even if you guessed at these numbers there's no need to worry.
Processing Volume - Processing volume is the amount of funds that the processor will allow you to charge in Visa and MasterCard sales in a monthly period. Think of the processing volume as the limit on the line of credit. If you exceed your declared processing volume the processor may impose surcharges, penalties, or they may take action to stop the violation.
While moderately exceeding declared processing volume may not lead to any recourse from the processing bank, grossly exceeding processing volumes can be a serious issue. On the bright side, it's not difficult to declare the correct processing volume and providers are usually very helpful. The first important point to make is that there are no penalties for not meeting the processing volume that you declare on your merchant processing agreement. This means that you can declare a processing volume of $5,000 a month, not process a single penny, and you will not be penalized. Granted, this wouldn't be good for cash flow, but you would not face penalties or rate changes from the processor.
Average Ticket - The term average ticket is used to refer to the dollar amount of an average MasterCard or Visa sale. When applying for a merchant account some merchant service providers ask that you declare an average ticket limit instead of an average ticket amount. This means that instead of declaring your mid-range sale amount, you should declare the highest sale amount that you expect. Some providers will even ask for both of these pieces of information. In this situation you will be asked to declare your average ticket amount and also the highest overall ticket amount that you expect to process. This is usually done to accommodate businesses that have a relatively low average ticket but process a large sale every now and then. Processors pay close attention to the average ticket amount. If you process a transaction that is in gross excess of the declared average ticket amount you may be subject to penalties such as having the funds from the transaction held for as long as 6 months, having your account closed, or both.
Declaring an Incorrect Average Ticket or Processing Limit - Don't forget about these two figures once you begin to process credit cards. If after you begin processing you realize that you underestimated one or both of these figures, contact your provider as soon as possible to discuss your options. Providers can often have the limits on your account raised, or they can take others actions to avoid any service delays or penalties.
Increasing Your Average Ticket and Processing Limit - For most businesses the average ticket amount will not change over time because the business continues to sell the same products and services. However, the processing limit usually needs to be raised as a business grows and sales increase. Most processors will allow the processing limit to increase naturally over time. Processors understand that as a business grows the gross sales will increase and credit card sales will increase as well.
Contact your provider to request an increase in your processing limit. Depending on the amount of the increase that you're requesting, getting your processing limit increased may be as simple as filling out a quick change form. In some cases the provider may suggest that you open a new merchant account.
Declaring the Correct Transaction Percentages
Processor need to know how you will be transacting your credit card sales. It's a good idea to declare whatever processing method percentages that will afford you the most flexibility with your merchant account. This is especially important if you think that you will be processing a somewhat diverse array of transaction types. For example, it may be fine for a retail store to declare a 90% swipe rate and a 10% key-entered rate, but a pizza restaurant would run into problems if they were to declare the same percentages. The pizza restaurant may have to declare 50% swiped transactions, and 50% key-entered transactions, making them ineligible for a retail merchant account.
Processor Recourse and Merchant Account Penalties
The merchant processing Agreement (MPA) that you sign when opening a merchant account is a legal document that gives the processor many rights over your processing relationship.
Most of the time the processor is well within the guidelines set forth in the MPA and it's the merchant's fault for violating these regulations. It's absolutely crucial to know the boundaries and regulations described in your processor's MPA and to take them very seriously. Violation of processing limits, average tickets, and general misuse of merchant processing abilities are the most common issues, and many of these circumstances can be avoided by reading your MPA and asking your provider to clarify anything that you're unsure of.
For more information about applying for a merchant account or to find out if you are paying the lowest possible rate on your current merchant account, click here for a free rate analysis.
Posted by Jeff Shavitz on Tue, Nov 17, 2009 @ 09:01 AM
Convenience Fees: What are They, and Can You Charge Them
What is a convenience fee?
It varies slightly from one card brand to the next, but a convenience fee is basically a charge in addition to the original transaction amount for the privilege of being able to use an alternate payment method. It sounds like the same things as a surcharge, but it's not that easy.
By VISA's guidelines, surcharges are different than convenience fees. By MasterCard's definition "any fee charged in connection with a Transaction that is not charged if another payment method is used" is a surcharge. So technically, VISA says that convenience fees and surcharges are different and MasterCard says they're the same thing. Are you confused yet?
Surcharging customers for paying with a credit card is considered discrimination based on payment type. A convenience fee is a charge for offering customers another payment option that is separate and in addition to standard payment methods.
For example, a retail merchant account that takes credit cards, cash and checks as payment can't charge a convenience fee on credit card transactions. This would be considered payment method discrimination because credit card payments are not offered as a bona fide convenience and the fee isn't applied to all methods of payment. On the other hand, a utility company that primarily accepts payment via mail could charge a convenience fee on in-person credit card payments that they offer as a bona fide convenience to customers.
Can I charge a convenience fee, and if so, under what circumstances?
Different card brands have different rules on convenience fees, but VISA provides the most thorough guidelines.
VISA states (source: Card Acceptance and Chargeback Management Guidelines for VISA Merchants):
For merchants who offer an alternative payment channel (i.e., mail, telephone, or e-commerce) for customers to pay for goods or services, a convenience fee may be added to the transaction amount. If the merchant chooses to asses a convenience fee to its customers, the merchant must adhere to the following rules:
• The fee is being charged for a bona fide convenience of using an alternate payment channel outside of the merchant's normal business practice
• The Fee:
o Must be disclosed to customers as a charge for alternate payment channel convenience
o Is applied only to non-face-to-face transactions
o Must be a flat or fixed amount regardless of the amount of payment due
o Is included as part of the total transaction
o Cannot be added to recurring transactions
o Is assessed by the merchant that provides goods and services to the cardholder and not by a third party
• The customer must be given the opportunity to cancel prior to the completion of the transaction
If you do fall into the business category that can charge a convenience fee on VISA transactions, you'll notice that in addition to the other rules, the fee must be a flat rate regardless of the order total. This differs slightly form MasterCard's rules.
MasterCard (Source: "MasterCard Rules" Section "5.9.2 Charges to Cardholders")
MasterCard doesn't go into as much detail about convenience fees as VISA, they simply state that:
A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments. A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly permitted in writing. For purposes of this Rule:
• A surcharge is any fee charged in connection with a Transaction that is not charged if another payment method is used.
• The Merchant discount fee is any fee a Merchant pays to an Acquirer so that the Acquirer will acquire the transactions of the Merchant.
While the rules for applying a convenience fee are in line with VISA, MasterCard allows a flat, tiered or percentage-based fee structure.
Discover (Source: "Discover Operating Manual", Section: "2.3 Surcharges")
Discover doesn't specifically give mention to convenience fees, but they do cover surcharges. For Discover, the two terms are interchangeable.
You may assess a surcharge on a Card Sale conducted using a Credit Card provided that (i) the amount of the surcharge may not exceed the Merchant Fee payable by you to us for the Card Sale, and (ii) you assess surcharges on card sales conducted using other credit cards accepted by you. You may not assess a surcharge or other penalty fee of any kind on any other type of Card Transaction or for any Card Sale conducted using a Card other than a Credit Card.
Discover states that "you assess surcharges on card sales conducted using other credit cards accepted by you." With this Discover has effectively deferred to other card brands for rules governing surcharges. Therefore, to surcharge Discover you'll also have to surcharge the other card brands that you accept - which will bring you back to VISA's more strict guidelines that differentiate between convenience fees and surcharges.
American Express (Source: "American Express Operating Procedures for US Merchants" section: "1.7 Prohibited Use of the Card" and "8.5 Apartment Rentals")
AMEX doesn't specifically mention surcharges in the "Prohibited Use of the Card" section of their operating procedures but they make specific reference to this section from the "Apartment Rentals" section of the same guide stating that:
"The prohibition in subsection 1.7 "Accepting the Card - Prohibited Uses of the Card" against imposing restrictions, conditions, or disadvantages (e.g., fees, surcharges, "convenience" or "administrative" fees, penalties) when the Card is accepted will apply whether or not your Rental Establishments impose them on any Other Payment Products."
There actually is no reference in subsection 1.7 that mentions surcharging, but it's obviously implied. In light of this, it's apparent that American Express also generally rules against convenience fees. If you'd like to make sure, we suggest that you contact AMEX directly, reference your merchant identification and request their convenience fee policy for your business's situation.
Courtesy of: merchantcouncil.org
For more information on convenience fees or to find out how much money you could save with Charge Card Systems,
click here for a free rate analysis.