A. Here’s how the money flows:

Traditional processing: $100 payment → $97 to you (after 3% fee)
Service fee processing: $100 payment + $3 service fee → $100 to you, $3 to processor for fees

You receive the full amount owed. The customer pays the processing fee separately, and your payment processor uses it to cover all costs. No deductions from your deposit.

A. Confusing, right? Mastercard calls their government program a “convenience fee,” but it works like Visa’s service fee program. Same concept, different name.

What matters: Visa and Mastercard let government, utilities, and education institutions achieve zero-cost processing.

To learn more or get your questions answered, talk to one of our experts.

A. Federal, state, and local entities with eligible MCCs:

• Tax collection agencies
• Courts (fines, fees, costs)
• DMV and licensing departments
• Building and permitting departments
• Parks and recreation (when processing government fees)
• Utilities

Check with your processor if you’re unsure – they can verify your MCC classification.

Do nonprofit organizations qualify for service fees?

Generally no. Service fee programs are specifically for:

• Government agencies
• Public higher education institutions
• Some qualified private educational institutions

Nonprofits typically need to use dual pricing, convenience fees (if they have alternative channels), or traditional pricing. There are other cost-saving strategies for nonprofits – consult with your payment processor.

To learn more or get your questions answered, talk to one of our experts.

A. Yes. Service fees can be applied to:

• Credit cards (all brands)
• Debit cards (all brands)
• Prepaid cards
• All transaction types within your eligible MCCs

This is one advantage over surcharging, which cannot be applied to debit cards.

To learn more or get your questions answered, talk to one of our experts.

A. You can only charge service fees on transactions that match Visa’s  list government, utility or education MCCs.

Example – City Government:

• ✅ Property tax payments – Service fee allowed
• ✅ Parking tickets – Service fee allowed
• ❌ Gift shop sales at city museum – Service fee NOT allowed (retail MCC)

Your payment processor helps you configure systems to apply fees correctly based on transaction type.

To learn more or get your questions answered, talk to one of our experts.

A. If you’re not merchant classification code (MCC) is not on VISA’s approved list as a government, utility or educational institution, you don’t qualify for service fee programs. Consider these alternatives:

• Dual pricing – Works for any business, legal in all 50 states
• Convenience fees – For businesses with alternative payment channels
• Better processing rates – Sometimes the simplest solution

A. Yes. If you are a government, utility or higher ed merchant within a specific list of merchant category codes. This is a major advantage over convenience fees. Service fees can be:

• Percentage-based (like 2.5% of the transaction)
• Flat dollar amounts (like $3.00)
• Whatever structure works best for your needs

This flexibility is perfect when you handle both small payments (parking tickets) and large ones (tuition).

A. Mastercard: Calls it a “government convenience fee” but it works the same way
American Express: Offers it through their OptBlue program
Discover: Follows the same rules as other card networks

Your payment processor coordinates everything across all card brands for you.

A. No.  Visa removed that requirement.

A. Clearly tell customers about the service fee before they pay:

• Show the fee amount on your payment page
• Display it at payment kiosks
• Include it in payment instructions
• List it separately on receipts

Simple language works best: “A processing fee will be added for card payments.”

A. Keep it simple and transparent:

“There’s a [X%] processing fee for card payments that covers the cost of accepting cards. You can pay by card for convenience, or use check/ACH at no additional charge.”

Most people understand that processing cards costs money and appreciate having the option.