Credit card Surcharge

Let me ease your confusion, @Jessicaisme.

I’d be delighted to add more information on how credit card fees are applied and recorded in QuickBooks Online and Point of Sale.

In processing credit card payments, there are different fees  that comes with it depending on the payment method you use. May I ask in which state your business is operating in?

Credit card surcharges are fees illegal in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and Puerto Rico. However, you can charge a convenience fee to customers who use credit cards rather than another form of payment that’s standard for the business.

To record your payments and processing fees for QuickBooks Payments, here’s how:

1. Click the Gear.
2. Choose Account and Settings (or Company Settings).
3. Select Payments from the left menu.
4. In the Chart of Accounts section, click the pencil (edit) icon.
5. For Where do you want to record payments?, choose the correct bank account.
6. For Where do you want to record processing fees?, select the proper expense account for tracking processing fees.
7. Click Save.

That should do it!

If you’re having difficulty recording credit card processing fees on your end, I’d recommend reaching out to our Customer Care Team . A specialist will review your account on a secured environment and provide the information you need.

Feel free to leave a comment below if you have follow-up questions about applying and recording credit card processing fees in QuickBooks. I’m always here to help.

In QuickBooks 2018 under customer payment screen their is a button for Credit Card Processing fee. How does this work? How do I turn it on? I have never used QuickBooks but I might want to start charging customer paying their bills with a credit card a processing fee. 

Thanks 

it depends partly on the state, some states are rolling back the law that says you can not, others have not. but ... this is the most current I can find
https://www.finder.com/review-guide-to-credit-card-surcharges

Since you can not, in any state, surcharge for a debit or prepaid card, there is no way to issue a surcharge for online sales at all - you do not know the type of card being used.

And in QB an invoice is final, there is no way to issue an invoice that says this much if you pay by cash/eft/elect check, or this much if using a credit card.

I just don't see the issue myself, I use square, so the only time I deal with a merchant processor fee is when I make a sale - no monthly dues or anything - so to me it is a cost of doing business, less than 3% of the sale in actuality.  Now I can see a sign saying something like 4% discount if paid with cash/check.  But then again now you have to deal with bounced checks , and if that happens it is a much higher fee.

My company KMP Financial specializes in setting up fully compliant surcharge programs. At the time of writing (May 2020), surcharging is legal in 46 states. Colorado, Connecticut, Kansas, and Massachusetts currently do not allow it.

Even if you are in one of the 46 states that do allow surcharging, there are some regulations on both the State level and the Card Brand level that you need to keep in mind. Here are the main ones in layman's terms:

• Notify the card brands (Visa/MC/Discover/AMEX) in writing prior to starting a surcharge program
• Disclose the surcharge at the point of sales (i.e. "we apply a small fee for credit card transactions, no fee for debit")
• The surcharge amount must not be greater than your actual cost of processing the card
• Never apply a surcharge to debit cards
• Calculate and display the surcharge amount on the payment page prior to clicking "submit"

As you can see, there are some tricky technical and compliance requirements that need to be executed in order to do this correctly. However, if you have the right partner, it is possible to achieve a 0% rate on credit card processing.

Our payment gateway handles all of this for you at no charge, and our compliance team will take care of all the paperwork with the card brands. In addition, we have a reporting module that allows you to easily update each transaction back in Quickbooks. Feel free to visit https://www.kmpfinancial.com/ for more information.

Would this be the same in Canada?

Hi dji1. Thanks for reaching out here. I'll be happy to answer questions related to QuickBooks Canada. Could you elaborate more on what you'd like to accomplish using the program? 

Does Quickbooks/Intuit require that I notify customers prior to charging that a surcharge is added for use of credit card?

Hi Harley14,

As of right now, we're not supporting the option to surcharge customers for using credit cards in their payments. For this reason, there isn't a requirement to notify customers about it since it's not an existing feature in the first place.

Hope this clears up everything.

If you have other concerns, feel free to go back to this thread. Take care and have a good one!

I respectfully suggest that you may be mistaken.  I was charged a 3.5% surcharge that the vendor does not list on the receipt but does appear on the invoice.

Hello there, @Harley14.

I can share information about fees when processing transactions in QuickBooks Payments.

Each time you complete a transaction, QuickBooks Payments charges you a fee. Fees also depend on how the payment was processed.

In addition, you may need to incorporate surcharges or service fees for the products and services you sell at times. These costs can be manually added to new or existing invoices. We'll show you how to make a fee item in QuickBooks, which you can then use as a line item on an invoice.

To begin with, create a service fee item in QuickBooks:

1. Access the Sales menu and choose the Products and services tab.
2. Click on New.
3. Choose Service.
4. Give the fee a name.
5. Choose the category that best describes the fee from the Category ▼ dropdown. Learn more about item categories.
6. Fill in the rest of the information needed.
7. Once done, hit Save and close.

To completely add the fee to an invoice, follow step 2 from this article: Add service fees manually to invoices.

Also, feel free to learn more about payment processing fees .

Let me also add this article to guide you on how to manage invoices: Customize invoices, estimates, and sales receipts in QuickBooks Online.

Just hit the Reply button if you need further help with this or with QuickBooks. It's my pleasure to always help you. Have a good one!

Hi Jessica. We may be a little late in answering this one for you, but you can easily (and freely to sign up) use Freedom Merchants to do exactly what you're looking to do - Credit-card surcharging, automatically from within any of Intuit QuickBooks products (both QBO and QB Deskto/Pro/Enterprise). You just create the regular Invoice as you're currently doing and then - on the Payment Page - there's a selection for the End-customer to choose how she/he wants to pay. You are legally allowed to do this if your business is based out of 48 US States that allow it (all but Connecticut and Massachusetts) and if the process of the surcharge is handled properly - (1) pre-notification before "Submit" button is clicked, (2) reasonable %, (3) no surcharging on Pin-Debit, etc. All of that is handled for you by the Payment-Pages that Freedom Merchants creates for you. The accounting treatment of the Surcharge is also automatically handled by the Freedom Merchants page too.

If you want to discuss further, feel free to reach out to Freedom Merchants directly at 212.931.9064 x.200. It's free to setup and free to cancel.

Hi Harley. It's not that Quickbooks requires any pre-notification of a Card-surcharge to customers. It's a Visa/Mastercard requirement to pre-notify a payor at any time just before the "Submit" button is clicked. So that the payor has a choice to pay that Surcharge or use a different payment method.

As mentioned in an earlier response, the Freedom Merchants solution perfectly handles this within the Quickbooks ecosystem (QBO and QB Desktop/Pro/Enterprise). You should check them (us) out to see if it's a fit for you for compliant dynamic Card-surcharging.

It can definitely be confusing navigating credit card surcharges, especially with the varying rules across states. Here are a few things to keep in mind if you decide to apply a surcharge:

• Disclosure Requirements: You need to display proper signage or notify customers at the point of sale (both in-person and online). Here’s a free downloadable surcharge sign to help with this!
• Surcharge Limits: The surcharge cannot exceed a certain percentage of the transaction, typically capped at 4%.
• Equal Treatment: The surcharge must be applied uniformly to all credit card transactions.
• Prohibited States: Some states prohibit credit card surcharges altogether.

The best way to ensure you stay compliant with all these requirements is to use a payment processor that automatically handles surcharge rules. EBizCharge provides automated surcharge compliance to avoid any accidental issues, especially in states where surcharges are prohibited. Plus, they're a native QB solution, so you can manage payments seamlessly while staying compliant. More info here.