|I get this question a lot.
“Interesting, but, I am concerned. Is it legal in my state to charge a fee for accepting credit card payments? How did you get the exception?”
I very, very, very much appreciate this concern.
Individual State General Business Laws On Convenience Fees
First, and most importantly, our fee is not a convenience fee. Convenience fees are well defined. We have spoken with state insurance departments, many state attorney general offices, many state departments of banking about why we are not considered a “convenience fee”. They have all agreed we are definitely not a “convenience fee”.
With this said, convenience fee laws are still very important to you.
There are 12 states that currently have laws on the books addressing you – the actual merchant – charging a surcharge based on method of payment. In all of these states, if you use a third party processor or gateway with whom you have a contract, to whom you pay any money or with whom you have a merchant agreement, then that processor or gateway is considered you or your legal agent for the purpose of the payment transaction. That means it is also not legal for that processor or gateway to charge the fee on your behalf.
States with Laws Prohibiting Convenience Fee
If you receive payments from customers in states which have convenience fee laws, even though your servers or call centers reside in a state which does not have convenience fee laws, it is normally accepted that transactions fall under the laws of the state from which the payment is made.
One of the keys to our service in these states is that our business relationship is with the person making the payment. You, as the merchant, do not pay Simply Easier Payments any fees or charges. There are no monthly, reporting, integration or miscellaneous costs associated with your Simply Easier Payments merchant account.
This is the same situation which exists when Federal Express charges the person who sends an overnight check or Western Union charges a person who wire funds for a payment. In both these cases the person sending the overnight check or wiring the payment has a business relationship with Federal Express or Western Union. No regulator will make the argument that you, the party receiving that payment, is also charging the fee charged and collected by Federal Express or Western Union. It is clearly a separate transaction with an independent business. This is true even if you suggested that wiring funds or sending a check overnight were a possible solution for your customer to get their payment to you on time.
|Staying Current with Regulations
Compliance is the job of our acquiring partner Moneris’ (1200 total employees) legal department and compliance departments. Rules and laws change and one of our jobs in providing this service is to change to stay in compliance. We actually have an independent third party approved by the Credit Card Association do a monthly audit on everything we do to be certain we stay in compliance.
I hope this addresses your concerns. Please call me – Duke Williams – 800-768-0907 – if you have more questions.