Sign Up  ·  Login  ·  Contact  ·  Schedule Demo  

Instant Accept


Convenience Fees… Are they beneficial for your business?

In this post we are going to cover the Instant Accept feature referred to as a convenience fee and briefly compare it to surcharging. Convenience fees can essentially be a source of income that will help offset some costs of accepting credit cards.

These fees can be added based on a percentage of the total charge or merchants can choose to just use a flat rate. Either way, make sure you understand the laws and requirements based in your location and with your payment processor.  As well as the card industry companies such as Visa, Mastercard, American Express and Discover.



In this article we will also cover:

What Exactly is a Convenience Fee?

To get started let’s go over what exactly a convenience fee is and why you would charge one. A convenience fee is a cost that a business may charge a customer when they pay with a credit card rather than the accepted traditional forms of payment such as cash or check.  Some businesses may not have customers that use credit cards as their form of payment as often as other businesses. This is where convenience fees come in handy for them.  One example is municipalities.

The name convenience fee sounds simple enough but when it comes to credit card payments it’s not as simple as it seems. Below we will show you a couple of examples of when and why a merchant may want to or choose to add this kind of fee. Specifically, merchants can charge a convenience fee to their customers based on their interchange rates. But you will need to jump through the hoops required by the credit card networks and your local and state laws.

EXAMPLE 1: Government agencies give their customers the option to pay with a check or by credit card.  If you choose to pay by check it is free but if you choose to pay with a credit card they impose a convenience fee which is normally a certain percentage of what the amount being charged is.

EXAMPLE 2: Another example of why a merchant may charge a convenience fee is as simple as a business has decided to give their customers the option of choosing to pay online. With the COVID-19 pandemic this option was most likely used by businesses more often. Businesses that would normally handle all or majority of their payments in person would now need to look at other options. With the convenience fee option merchants can offer credit card acceptance online by adding a convenience fee. This is where the offset for the interchange rates they are charged can be beneficial.

But before jumping right into charging convenience fees for your credit card payments consider offering other options that do not require a convenience fee or surcharge, such as ACH.

Convenience Fees or Surcharges. What’s the Difference?

To break down the explanation of both fees is not so simple. One is a fee that can be assessed on every purchase for the convenience of using a credit card, which is known as a surcharge. A merchant will usually charge this fee to their customers so they may offset costs incurred that they otherwise would not have.  Where a convenience fee is added, when a nonstandard form of payment is used i.e., credit card payments via online or by phone. Convenience Fees and Surcharges are not unlike each other, to your customers, as in they are both assessed by a business to help said business recoup additional costs for offering their customer the ability to pay with a credit card. However, they are not the same and they do have different rules and regulations.

Visa, Mastercard, Discover and American Express, also known as credit card companies, regulate their own specific rules when applying a convenience fee or surcharge. Your payment processing company should be able to help explain and inform you of the rules and regulations for the use of these types of fees, as well as your specific areas rules and regulations. But don’t rely on them to have all the answers make sure you do your own research. Below we will go over the card networks and help get you in the right direction to better understand what rules you need to follow.

Which is Right for Your Business Needs

It is suggested that you figure out what will work best for your business and your customers.  This means simply because it’s there does not necessarily mean your customers will want to use a payment option that offers credit card acceptance with the addition of a convenience fee. You may end up paying for a service that your specific clients won’t necessarily use. 

To determine whether your customers or clients will find a convenience fee “convenient” you will need to look at what you’re offering.  Take for instance curbside pickup.  One would think they could easily charge for this offering as a convenience fee but if you have a competitor down the street offering free curbside pickup then you are more likely to lose customers to those other competing businesses.

Following the Rules of Charging Fees

The guidelines for charging convenience fees within each of the networks are fairly simple and easy to start implementing within your business guidelines. But before you jump right in and start charging those fees you will need to be sure to review the rules and regulations for each credit card company before moving forward with using either fee structure.

We will go over each one with a high-level overview and provide links to their websites in order for you to do further research to make sure you are in compliance for your business and locational laws.

We cannot stress enough to make sure you are following your specific rules that can vary so be sure to check with your local and state laws for your specific area. You will most likely need to work with your payment processor to make sure you have implemented the convenience fees for your specific business or type of business correctly.

Debit cards and prepaid debit cards cannot have surcharges added for transactions according to Mastercard and Visa. While each card network has their own specific rules on charging convenience fees, we have found that Discover doesn’t specify any particular rules expect for keeping fees the same across the board for all credit cards. Here is an overview of each card networks policy restrictions for using convenience fees:




All nonstandard forms of payments can have convenience fees added. For some states the only restriction is for income taxes.


Education institutes and Government agencies can charge convenience fees on credit cards. But it is only a select few that are able to do so.

American Express

Credit card convenience fees can only be charged by utility companies, some rental establishments, government agencies and educational institutions.


Merchants can only charge Discover cardholders a convenience fees if the same charges are assessed on other credit cards from all issuers.

States Where Surcharges are Prohibited

As of writing this article there are only 5 states in which it is illegal to charge convenience fees or surcharges to your consumers credit card payments.  Those states include:

Even though it is illegal to charge fees to consumers in these states, it is not illegal for government agencies to impose surcharges on credit card payments.

Start Minimizing Your Costs Today!

With all of this in mind and making sure you follow the rules for your particular location you can make a better-informed decision on how or when to implement a convenience fee. There are always other options that you can choose from to keep your customers coming back. While minimizing the overall cost for your business you can offer payment options that your customers will prefer by using convenience fees. It’s beneficial to both you and your consumers.

Find out today how Instant Accept can help you with your businesses credit card processing costs today.

4 thoughts on “Convenience Fees… Are they beneficial for your business?

Leave a Reply

Scroll to top