Convenience Fee Definitions
The following definitions are associated with convenience fee processing:
Principal Amount - The principal amount is the amount charged by the merchant. For Example: A customer pays their real estate tax bill in the amount of $100. At that time they are also charged a convenience fee of $2.50. The principal amount is the one in the amount of $100.
Convenience Fee Amount – The convenience fee amount is determined by the collection type (i.e. real estate tax payment vs. utility payment). Whether the convenience fee amount is fixed or percentage based depends on whether the principal amount is a tax or non-tax payment.
Dual Transaction Convenience Fee Model – Dual transaction convenience fees are only applicable for tax collections when Visa is an accepted card type. In this model, the following occurs:
- Two merchant accounts are configured, one owned by the merchant, one owned by Govolution
- The tax payment (principal amount) is deposited into merchant’s bank account
- The convenience fee is deposited into Govolution’s bank account
- Two transactions are processed, resulting in two transactions on the cardholder’s statement
- Only the primary tax amount is shown in Velocity reports
Single Transaction Convenience Fee Model – Single transaction convenience fees are applicable to non-tax collections only. In this model, the following occurs:
- One merchant account is configured and owned by the merchant
- The principal and convenience fee amounts are deposited into the merchant’s bank account as one total amount
- Govolution invoices (or automatically debits) the merchant monthly for total fees processed
- The cardholder will see one transaction on their bank statement, representing the total of the principal amount + the convenience fee amount
- The principal amount and convenience fee amount are separated in Velocity reports. Both amounts can be viewed.
Tax Payments – Tax payments include personal income tax, employer-paid payroll tax, real estate property tax, other personal property taxes, unemployment tax, business income tax, and sales and use tax.
Non-Tax Payments – Any collections NOT included in the “Tax Payments” list above. Examples include, but are not limited to, permits, parking tickets, school tuition, patient payments, insurance premium payments, water & sewer payments, court fees and fines, etc.