Reduce Processing Costs with NetSuite Surcharging

Understanding Surcharging in the B2B Landscape

The rise of surcharging is a growing trend. While some businesses initially consider reverting to check payments, a well-structured surcharging program can be a more efficient and profitable solution. It's crucial to understand the nuances of surcharging and how it differs from convenience fees:

• Surcharge: A percentage added to the transaction total for credit card payments only, designed to cover processing costs.
• Convenience Fee: A fixed amount or percentage added to transactions in alternative payment channels (e.g., online versus in-person). Customers must have an option to avoid this fee.

You cannot apply both a surcharge and a convenience fee to the same transaction.

Key Considerations for NetSuite Merchants

Before implementing surcharging within your NetSuite environment, consider these critical factors:

• Cost Optimization: Work with a NetSuite partner, such as PayPack, to explore opportunities to lower your overall card acceptance costs. Optimizing your current setup may reduce the amount you need to recover through surcharging.
• Tax Implications: Consult with your tax advisor regarding the deductibility of credit card processing fees. While this can offer some relief, it won't fully offset costs like surcharging can.
• Competitive Landscape: Analyze your competitors' surcharging practices. Understanding industry trends will inform your strategy and minimize potential customer pushback. In many B2B sectors, especially distribution and manufacturing, surcharging is becoming increasingly common.
• NetSuite Integration: Ensure your NetSuite setup (i.e. PayPack with InterPayments and Stripe) can seamlessly integrate with your payment gateway to handle surcharge calculations and reporting. This is crucial for accurate accounting and compliance.

Navigating the Regulatory Landscape with NetSuite

Surcharging regulations vary by state and region. While most states permit surcharging, specific rules apply. It's critical to stay updated on these regulations as they can change. Here are some essential points:

• State Laws: Currently some U.S. states prohibit surcharging. However, other state-specific regulations may exist. State laws supersede card brand rules.
• Card Brand Rules: Visa, Mastercard, American Express, and Discover have specific requirements for surcharging:
  • Notification: Notify your acquirer in writing at least 30 days before implementing a surcharge.
  • Universality: Apply the surcharge to all card brands, not just select ones. Surcharges cannot be applied to debit or prepaid cards.
  • Maximum Surcharge: The maximum surcharge allowed varies by card brand. Profiting from surcharging is prohibited.
  • Disclosure: Clearly disclose the surcharge at the point of entry (physical or online) and the point of sale.
  • Transaction Cancellation: For online transactions, provide the cardholder with the option to cancel.
  • Line Item Display: Display the surcharge as a separate line item on the receipt.
  • Zip Code Verification: Verify the cardholder's zip code to ensure compliance with state regulations, especially important for B2B transactions across different states. This can be a significant challenge for NetSuite users without advanced payment gateway integration.

Mitigating Risks and Maximizing Returns with NetSuite

Non-compliance with surcharging rules can result in significant fines. Partnering with a specialized payment processor experienced in surcharging is essential for NetSuite users. These partners can help:

• Ensure Compliance: Stay up-to-date with ever-changing regulations.
• Optimize NetSuite Integration: Seamlessly calculate and apply surcharges within your NetSuite workflows.
• Minimize Risk: Avoid costly penalties through adherence to card brand rules and state laws.
• Enhance Customer Satisfaction: Implement surcharging transparently and professionally to maintain positive customer relationships.

Strategic Surcharging with NetSuite

Beyond simply recovering costs, surcharging can be a strategic tool. For example, offer discounts for early payments made by credit card, incentivizing faster collections and improving cash flow. This can be easily managed within NetSuite.

Conclusion: Integrating Surcharging with NetSuite for Optimized Payment Processing

Surcharging can be a valuable strategy for NetSuite merchants to manage credit card processing costs effectively. However, navigating the complexities of regulations and ensuring seamless integration with your NetSuite environment requires expertise. By partnering with a specialized payment processor, you can implement a compliant and profitable surcharging program, optimizing your payment processing and maximizing your bottom line.

For additional resources, check out the links below to help you navigate the surcharge journey.

Stripe Resources: Credit card surcharges explained: What businesses need to know

InterPayments General Counsel: Maximum Fee Recovery With Minimum Risk