Convenience Fees, Monthly Reminders, and 'Recurring' Payments

Convenience fees may be charged by merchants and are charged for accepting payments in an alternative payment channel outside the merchant’s customary payment channels. The convenience fee is applied only to a transaction completed in a card absent (a.k.a. card not present) environment. The convenience fee is flat regardless of the payment amount, applied to all forms of payment accepted within the channel, and cannot be charged on a recurring transaction. Where Visa is accepted, the Visa rules apply unless a waiver has been granted by the respective card network (See Visa Rules, October 2018, ID# 0027492).

Payers (e.g. cardholders, Receivers, bank account holders, etc.) can sign up for monthly reminders of their bill or invoices due with notifications sent through email, text, and other channels. Payers are notified on a monthly basis what payment amount is due.

A recurring transaction is one that has been authorized by the consumer in advance, takes place on a on a regular, periodic interval, and also requires no further action by the consumer to initiate the payment.

If a consumer wants to pay with a card on an ongoing, monthly basis, but the merchant wants to assess a fee, a pay-by-text (a.k.a. text-to-pay) conversational payment approach may be used through SMS texts.

By the merchant sending the monthly reminder via text and requiring the payer respond to initiate the payment, the monthly transaction, which requires interaction by the payer (e.g. "PAY" as a text response), is not classified as a recurring payment, so the merchant can assess a convenience fee on this type of pay-by-text transaction where permitted and desired.