Passing on card fees to customers (Surcharging)

Encyro simplifies the process of passing credit card processing fees to customers, if you opt to enable this feature.

In cases where the fee cannot be charged due to inconsistent settings (e.g., ACH is not offered as an alternative or Helcim’s fee-saver option is disabled), Encyro automatically removes the surcharge from the customer’s view, allowing the payment to proceed seamlessly.

Important Decision: Should You Pass on the Fee?

Before enabling this feature, consider the business impact as well as your compliance with state law and card network rules:

Business Impact

• Advantages: Making the cost of credit card acceptance visible may encourage customers to switch to lower-cost methods like ACH or debit.

• Disadvantages: Some customers may perceive the fee negatively, potentially impacting loyalty—especially if competitors don’t charge similar fees.

Passing on the fees tends to be more acceptable in B2B transactions, service industries (e.g., legal, construction), or where switching providers is difficult for the customer. To maintain trust, clearly communicate the reason behind the fee.

Compliance with Card Network Rules

The card networks (VISA, Mastercard, American Express, Discover, and other card brands) have their own rules related to passing on card processing fees.

Encyro uses Helcim’s technology to help you stay compliant with some of the important card network regulations:

• Limit surcharges to actual processing costs.
• Automatically exclude debit card transactions from any surcharge.
• Display required fee disclosures with mandated formatting during online payment via Encyro.

However, you as the merchant remain responsible for certain rules. For instance, you must submit the Mastercard Surcharge Disclosure Form. Per card network rules, only the merchant (you) may apply the surcharge and so the card networks hold you responsible for ensuring compliance. Use Helcim’s Surcharging Toolkit to review the requirements.

State Law Considerations

While Encyro cannot provide legal advice, it appears from our review that some US states, such as Connecticut, Maine, and Massachusetts, prohibit credit card surcharges entirely. If you operate in, or invoice clients in, these states, you probably cannot use this feature.

Encyro supports common compliance requirements, such as:

• displaying the fee before the transaction, and
• offering a no-fee payment alternative.

However, you should review any additional requirements per your state’s specific laws.

How to Enable the Feature

If you have not enabled invoicing, enable it first. See: how to enable invoicing in Encyro. Then follow the steps below.

1. Ensure that ACH is enabled in Helcim. This allows Encyro to offer ACH as a fee-free alternative payment method for customers who wish to avoid the extra fees for paying by credit card.
   • Regulations require that a no-fee payment option be available when surcharging.
   • If ACH is not enabled, while the payment will still be processed (to maximize your collections), the surcharge will not apply.
2. Enable Fee Saver in Helcim.
   • Follow Helcim’s step-by-step guide to enable Fee Saver (expand the section “In your account level settings”). Accept Helcim’s terms to activate the feature.
   • Use the links in that guide (under FAQs) to notify Mastercard if required.
   • NOTE: If the fee-saver option is disabled in Helcim, Encyro will skip the convenience fee even if you set it as required in Encyro. Encyro tries to minimize customer facing errors and maximize your collections even if the settings are accidentally left in an inconsistent state.
3. Enable Convenience Fees in Encyro.
   1. Log into your Encyro account if you haven’t already.
   2. Click “Settings” in the left menu, then click “Invoicing Settings.”
   3. Scroll down to “Convenience Fees” and turn on the “Pass on credit card fees to customers” toggle.
   4. When sending an invoice, review that the setting shows as expected. You may override this default setting on each invoice if desired. (When sending e-sign requests or secure messages that require payment, the default setting automatically applies.)