Lockstep Receivables customers now have access to surcharging through payments partner InterPayments. For customers using Fortis, Repay, and Authorize.net, surcharging is a viable option. Using Lockstep Self Service, your client can opt-in to pay with a credit card or by ACH. For credit card payments, a modest surcharge covering the cost of the transaction processing fee and Interpayments fees will be added.
Surcharging is where businesses add an extra fee to credit card customers to pay for the fees charged by credit card companies. This can be controversial as it can impact the customer experience negatively. However, surcharging can also be a way for businesses to offset the costs of processing credit card payments.
Complex but compliance is easy
When surcharging, businesses must be sure to follow the rules and regulations set forth by credit card companies and local laws. For example, businesses are not allowed to surcharge debit cards. Additionally, businesses must make surcharges clear to customers before they complete a purchase. Businesses that choose to surcharge must work with a payment processor that can help them comply with the rules and regulations.
One underlying benefit is that Interpayments can determine if the card used can be charged a surcharge fee based on location and type of card. Because some states ban surcharging fees and the Dodd-Frank act prohibits surcharging on debit cards, having the ability to flag these instances is essential.
Within Lockstep Receivables, businesses can choose to add a surcharge to credit card payments. The surcharge is automatically calculated and added to the total amount due. Once enabled, you’ll see verbiage within Lockstep Receivables indicating that a transaction fee may be applied to cover credit card processing costs. In accordance with federal and state regulations, this has to be in a clear, easy-to-read font/size and placed directly above the pay button right, so these two lines show up. Interpayments takes on all of the liability to conform to federal and local laws.
Elevated customer experience
With surcharging, Lockstep customers’ clients have the same experience that they have come to expect. When your customers pay, Lockstep sends an additional API call to Interpayments to tell them that this surcharge occurred. Interpayments handles the rest financially, and tacks on their fees to cover the costs of providing this service to you. The entire process is seamless and easy to use.
Your invoice processes remain the same. The difference comes in the fact that the payment received will include the collected surcharging and Interpayments fees. Invoices that are paid via ACH or check will not have the surcharge added.
From the accounting point of view, you have several options in managing the additional fees you see coming in. At the end of the month, Interpayments will bill you for all transaction and processing fees. and the card, the processing fees. You can run a downloadable report from Interpayments, as often as needed to ensure your fees collected match the fees owed.
Because of the partnership between Lockstep, Interpayments, and the merchant providers (today, Fortis, Repay, and Authorize.net), you do not need to leave your trusted provider. These steps save you significant time, money, and headaches. You can focus on your business and maintaining the high-quality customer service your clients have come to expect from you.
Surcharging can be a great way for businesses to offset the costs of processing credit card payments. By partnering with Lockstep and Interpayments, you can take advantage of this revenue stream without having to leave your current provider or worry about compliance.