Everything you need to know about “Convenience Fees”

There has been a great deal of confusion regarding how and when convenience fees can be applied by a Merchant. To help Merchants determine how these fees may be applied, the following credit card processing convenience fee guide should answer any questions you may have.

What is a Convenience Fee?

A convenience fee is a fee assessed by the merchant to the cardholder for payments processed through an alternative payment channel. The alternative payment channel offers the cardholder an added convenience, thus a convenience fee is allowable. A convenience fee cannot be assessed to payments received in the standard payment channel since there is no added convenience to the cardholder.

An alternative payment channel can be defined as by phone or over the internet. The customary payment channel is “in person” (card present) or by US mail.

Standard Convenience Fee General Rules

The general Convenience Fee rules are:

  • A Convenience Fee can only be charged in an alternative payment method.
  • Transactions must be card not present (non face to face).
  • You must disclose that the fee is for using an alternative payment method.
  • The fee must be a flat or fixed amount (not a percentage of the sale).
  • The fee must be applicable to all forms of alternate payments accepted (all card types).
  • The fee must be included in the transaction total (not a separate sale).
  • The fee cannot be charged by a third party.
  • The fee cannot be added to a recurring transaction.
  • The fee cannot be assessed by merchants that conduct business online only (e-commerce merchants).
  • The fee must be clearly disclosed to the cardholder prior to the sale and the cardholder must be given an opportunity to opt out.
  • The fee should not be advertised as a fee assessed by MasterCard, Visa, American Express or Discover.
  • The fee cannot be advertised or otherwise communicated as an offset to the merchant discount rate.

Convenience Fees FAQ’s

Who can assess a Convenience Fee?
  • Any merchant can assess a convenience fee as long as it is in a compliant manner.
  • All MCC/SIC business types are allowed, providing each merchant meets the requirements and follows the guidelines to assess this fee properly.
  • Certain exclusions will apply if the merchant is already participating in a special program such as the Utility Program, Large Ticket Program, etc.
Isn’t offering the cardholder the option to pay via credit card considered an “added convenience” to the cardholder?
  • No. Offering the cardholder the option to pay with a credit card is not considered an added convenience.
  • This is an additional form of payment acceptance the merchant has elected to offer to their customers.
Can a Convenience Fee be assessed for internet only merchants?
  • No. A Convenience Fee cannot be assessed by a merchant who only accepts payment through the internet.
  • Since this is the only payment channel offered, there is no added convenience to the customers/cardholders.
Can a Convenience Fee be assessed by a third party servicer (TPS) or a billing company contracted by the merchant?

No. The convenience fee cannot be assessed by a third party servicer (TPS) or a billing company. Only the merchant that is rendering the services or products that are being paid for may assess a convenience fee.

Can the Convenience Fee be a percentage?

No. The convenience fee cannot be a set percentage of the sale. The convenience fee must be a flat/fixed amount that is assessed to all transactions. Each transaction, regardless of dollar amount, must pay the same convenience fee amount. Additionally, the fee cannot be tiered based on or assessed to recurring transactions.


The following type of merchants and programs are exempt from the standard or general convenience fee rules:

Any merchant participating in the Visa Government and Higher Education Payment Program. Merchants on this program are allowed to do the following in regards to a convenience fee:

  • Assess the fee as a variable or percentage for credit transactions.
  • Assess the fee to a flat/fixed amount for debit, not to exceed $3.95.
    *Merchants must be enrolled in this program

Merchants participating through a reduced interchange specialty program cannot assess a convenience fee. Any merchant participating in these types of programs will need to cease their convenience fee or be removed from program participation. A merchant cannot have the benefit of both the specialty program and convenience fee together.

Sample of specialty programs:

  • Utility
  • Large Ticket
  • Debt Repayment

Any merchant participating in American Express in the government, utilities, or certain education industries (i.e. higher education, private school – kindergarten to grade 12). Merchants on this program are allowed to do the following in regards to a convenience fee:

  • Merchants classified as government entities, including government utilities, and privately owned utilities may assess convenience fees on all charges.
  • Merchants classified as educational institutions may assess convenience fees only on charges for tuition, room and board, school lunch payments or other mandatory fees.
  • Third-party service providers can only assess a convenience fee when it complies with the rest of the general convenience fee requirements.

Any merchant participating in the MasterCard Convenience Fee Program. Merchants on this program are allowed to do the following in regards to a convenience fee:

  • Fee can be assessed on card present, recurring transactions, MO/TO, internet, and kiosk on qualifying transaction types.
  • Fee can be combined with the transaction and submitted as one or submitted as two separate transactions.
  • May be flat, tiered, or percentage based on transaction amount.
  • The fee can differ across payment channels offered (e.g. point of sale, web, phone)
  • Fee must be assessed equally to all other card brands accepted for payment by the merchant.

*Merchants must be enrolled in this program. If the merchant accepts any other card type, even on a separate merchant account, they cannot be enrolled in this program. This is different from the standard convenience fee program and only certain MCCs apply.


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