What is a surcharge?
A surcharge is a fee added to a transaction when a customer chooses a payment method that costs your business more to accept. Your Verifone Android EFTPOS terminal can automatically detect eligible transactions and apply a surcharge for you.
Setting an appropriate surcharge
As per Commerce Commission guidance, your surcharge must not exceed the extra cost of accepting that payment type. In most cases, this is your merchant service fee for those transactions.
Do not include terminal rental, network connection costs, POS costs, staff wages, or other general business expenses in your surcharge.
If you accept multiple card types with different merchant service fees, you'll need to use a weighted average surcharge. This helps you apply a fair rate that reflects your actual processing costs.
If you’re charged different rates for contactless debit and credit cards, don’t set your surcharge at the higher credit rate. This does not accurately reflect your cost of acceptance.
How to calculate a weighted average surcharge
Your bank may provide you with your weighted MSF average as the ‘average rate’ or 'MSF rate' on your statements.
If not, here is how you work it out using the sales breakdown and applicable fees on your monthly Merchant Service Fee statement from your bank:
Total Merchant Service Fees ÷ Value of Transactions that incurred a surcharge × 100
Example: A merchant processes $25,000 per month in Visa and Mastercard transactions and pays $215 in total fees. The merchant in this example should set their surcharge at 0.86%.
215 ÷ 25,000 × 100 = 0.86%
| Visa & Mastercard type & rate |
Total MSF |
Sales |
|---|---|---|
| Domestic contactless debit (0.7%) | $140 | $20,000 |
| Domestic credit card (1.5%) | $75 | $5,000 |
| Total | $215 | $25,000 |
There is no merchant service fee for cash, EFTPOS, or debit cards inserted or swiped through the terminal. These transactions should not be surcharged or included in your calculation.
Get in touch with our Customer Services team, if you’d like us to update your surcharge rate.
TIP: Build a report in Verifone Central to track surcharge amounts
How to process a transaction with a surcharge
If surcharging is enabled on your terminal, the Present Card screen will display 'Surcharge may apply' for all Purchase transactions. To complete a surcharged transaction:
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Enter the transaction amount
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Tap Purchase
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Customer presents their card or mobile wallet
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Terminal displays the surcharge and prompts the customer to accept (unless disabled)
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Customer enters PIN (if required)
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Terminal processes the transaction and displays Approved or Declined
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Merchant receipt prints
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Customer selects their preferred receipt option
The surcharge prompt can be disabled for contactless transactions during setup
Customise your surcharging setup
Eftpos NZ can tailor your surcharging solution to suit your business needs. Options include:
- Rate by card type
Set one rate for Visa and Mastercard, and a different rate for other schemes to reflect different costs of acceptance -
Surcharge thresholds
Apply surcharges only for transactions over or under a certain value -
Min/max surcharge values
Set minimum and maximum surcharge amounts -
MOTO Surcharge Override
Choose whether to apply a surcharge to Manual or MOTO transactions
Call 0800 338 767 (option 3) or contact us to request surcharging or customise your setup