Compliant method to add surcharging for in-person credit cards in Canada

[theartofdying]

Hello, I want to start taking credit card payments using Square, but due to the additional costs of processing credit cards, I also want to apply a surcharge.

From my research, I know there are requirements from both Visa and MasterCard to start surcharging. Assuming I meet these, what is the correct way to go about surcharging in Canada using Square? I have read that the service charge feature is not compliant (supposedly, but it also doesn't explain why it is not compliant very clearly).

In my particular use case - I will only be using Square to record credit card and debit card payments in-person. All other payment methods (including anything paid online only) I plan to record elsewhere (for various other reasons).

Any advice is greatly appreciated. Thank you in advance!

[RobynR]

Hello @theartofdying,

Welcome to the Community!

If you wish to add a surcharge to a transaction – a fee added to the bill when a buyer pays with a credit card to cover the cost of payment processing fees – it is your responsibility to meet all legal and card network requirements. Credit card surcharge permissions may vary by regulatory or card network rules.

Contact a tax professional or your local government for further guidance on whether your area permits surcharges, and keep in mind that debit card transactions are prohibited from surcharging.

Since Square’s card processing fee is taken out of the total amount of each transaction, including tax, tips and any surcharges. Fees vary by payment entry method, and the estimate is based on Square’s Standard pricing. To view your rates, visit your online Square Dashboard.

Note: Debit card transactions are prohibited from surcharging.

To apply a surcharge you generally need at least:

-For it to be listed separately on the customer’s receipt.
-To identify it as a surcharge.
-For it not to exceed the actual processing fee that the merchant is charged for the transaction in question.
-Disclose the surcharge to the customer, and provide the customer the option to cancel the transaction at no cost, in each case prior to completion of the transaction.

I hope this information helps. Please let me know if you have any further questions.