### Convenience Fees vs. Surcharging

A **convenience fee** is a charge applied by businesses to cover the costs associated with payment processing. This fee is legal as long as merchants offer alternative, non-card payment options.

A **surcharge**, on the other hand, is an additional fee imposed simply for using a credit card without providing other payment options. This practice is illegal in certain states.

At **Paystand**, we do not support surcharges. Instead, we enable merchants to manage convenience fees and even offer cash discounts, which are legal in all U.S. states.

### Legal Considerations

Convenience fees are regulated under several key U.S. laws:

- **The Truth in Lending Act (TILA)** – Requires merchants to disclose all fees associated with credit card transactions, including convenience fees.
- **The Fair Credit Billing Act (FCBA)** – Prohibits merchants from imposing surcharges without prior notice and requires them to be reasonable.
- **The Dodd-Frank Act** – Amended the FCBA to place additional restrictions on credit card surcharges.

Because surcharging is restricted or prohibited in many states, Paystand provides a fully compliant solution by allowing merchants to use **convenience fees** instead.

### How Paystand Supports Convenience Fees & Incentives

With **Paystand’s Convenience Fees module**, merchants can:

✔ Pass the processing fee to the payer, reducing the impact on their revenue and profit margins.

✔ Offer **credit card payments** while maintaining compliance with state and federal regulations.

✔ Use **incentives** to encourage payers to use lower-cost payment methods, such as ACH or bank-to-bank transfers.