Convenience/Service Fee Definitions
The following definitions are associated with convenience/service 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 service fee of $2.50. The principal amount is the transaction in the amount of $100.
Convenience/Service Fee Amount – The convenience/service fee amount is determined by the collection type (i.e. real estate tax payment or tuition payment versus utility payment). Service fees are associated with government and education-related collections and convenience fees are associated with other industry sector collections.
Dual Transaction Service Fee Model – Dual transaction service fees are only applicable for government and education-related 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 principal amount is deposited into merchant’s bank account
- The service fee is deposited into Govolution’s bank account
- Two transactions are processed, resulting in two transactions on the cardholder’s statement
Single Transaction Convenience Fee Model – Single transaction convenience fees are applicable to collections for industries other than government and education. 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 on a monthly basis for total fees processed
- The cardholder will see one transaction on their bank statement, representing the total of the principal amount plus the convenience fee amount