Does the credit card surcharge apply to Afterpay, Google Pay and Apple Pay?
We have Square as our active merchant with Apple Pay, Google Pay and Afterpay all enabled, and Payment Preferences set to a 3.000% credit card surcharge (Apply Tax on Surcharge Fees = No).
On the Finalize Contract page, the "Buy with Google Pay" and "Buy with Afterpay" buttons render inside the Credit payment method, and the surcharge notice displays directly above them. On a test quote with a $140.43 required deposit it read "A payment surcharge fee of $4.21 will be added when using this payment method" — exactly 3.000%.
Two questions:
1. When a customer completes payment by clicking "Buy with Afterpay", is the 3.000% surcharge added to the amount actually charged, or does the surcharge only apply to a card typed into the card fields? Same question for Google Pay and Apple Pay.
2. If the surcharge IS applied to Afterpay, is there any way to exclude Afterpay from it while keeping it on regular credit cards?
The reason question 2 matters: Afterpay's own Merchant Terms of Service (Schedule A, section 2(c)) prohibit surcharging. The clause reads "Merchant must not impose a surcharge on the Customer for using the Payment Method. A surcharge includes any charge or increase in the sale price, shipping costs or any other Customer fees and charges that are applied because the Customer has elected to use the Payment Method."
If IO applies our card surcharge to Afterpay and there is no way to switch it off for that method, we would be in breach of the Afterpay merchant agreement on our very first Afterpay sale, and we would have to disable Afterpay entirely rather than risk it.
We have not taken an Afterpay payment yet and we are about to start promoting it, so we would much rather confirm this now than find out from a customer's statement afterward. Please let us know either way.
Thanks,
DJ Preble
Event Edge Rentals, LLC
The same question
The surcharge would be added if any of these are chosen the software does not know the difference.
Here is what google says about Afterpay:
In the U.S., credit card surcharges (extra fees added to a purchase for using a credit card) are generally allowed under federal law, with a maximum of 4% on credit card transactions Merchant Cost Consulting. However, debit card surcharges are illegal in all 50 states.
Afterpay is a Buy Now, Pay Later (BNPL) service that splits a purchase into four equal, interest‑free installments. When you pay with Afterpay, the merchant bills your linked credit or debit card for each installment. The Afterpay service itself does not charge you extra for using it — the cost is built into the installment payments cardix.us.
That said, some merchants have been reported to add an extra fee if you choose Afterpay. For example, one customer reported being charged $96 instead of $90 for a $90 item because “Afterpay is extra” Reddit. This is not a standard Afterpay fee; it’s a merchant‑imposed surcharge. Whether this is legal depends on your state’s laws:
Key points:
Bottom line: You should not be charged more than the legal surcharge limit for using a credit card, and Afterpay itself does not impose such a fee. If you see an extra charge for choosing Afterpay, check your state’s surcharge rules and ask the merchant for clarification.
The surcharge would be added if any of these are chosen the software does not know the difference.
Here is what google says about Afterpay:
In the U.S., credit card surcharges (extra fees added to a purchase for using a credit card) are generally allowed under federal law, with a maximum of 4% on credit card transactions Merchant Cost Consulting. However, debit card surcharges are illegal in all 50 states.
Afterpay is a Buy Now, Pay Later (BNPL) service that splits a purchase into four equal, interest‑free installments. When you pay with Afterpay, the merchant bills your linked credit or debit card for each installment. The Afterpay service itself does not charge you extra for using it — the cost is built into the installment payments cardix.us.
That said, some merchants have been reported to add an extra fee if you choose Afterpay. For example, one customer reported being charged $96 instead of $90 for a $90 item because “Afterpay is extra” Reddit. This is not a standard Afterpay fee; it’s a merchant‑imposed surcharge. Whether this is legal depends on your state’s laws:
Key points:
Bottom line: You should not be charged more than the legal surcharge limit for using a credit card, and Afterpay itself does not impose such a fee. If you see an extra charge for choosing Afterpay, check your state’s surcharge rules and ask the merchant for clarification.
Thanks Jen — that first line answers it, and it raises a bigger question I need to close out.
If the software cannot tell the difference between methods, then: does the 3.000% credit card surcharge also get applied to a DEBIT card typed into the normal card fields? Payment Preferences only has one "Credit Card Surcharge" field, with separate fields for PayPal and ACH but nothing for debit. So does IO do a BIN lookup and skip the surcharge on debit, or does it surcharge every card that runs through the credit path?
This matters more than the Afterpay question. Debit surcharges are prohibited by the Visa, Mastercard, Amex and Discover network rules in all 50 states, and our signed rental agreement tells the customer in writing that "Debit cards, cash, and checks carry no processing fee." If IO surcharges debit, we are breaking network rules and contradicting our own contract on every debit transaction, and I need to turn the surcharge off today.
One correction for the record, in case that reply gets reused for another customer: Georgia does NOT prohibit credit card surcharges. The Georgia Attorney General's Consumer Protection Division publishes guidance permitting them, capped at what the merchant actually pays to accept the card, with disclosure at the point of entry, at the point of sale, and on the receipt. https://consumered.georgia.gov/ask-ed/2021-03-03/credit-card-surcharges
Where I think this leaves us:
- Afterpay: surcharge applies and cannot be excluded. Afterpay's own merchant terms prohibit surcharging, so we will most likely disable Afterpay.
- Google Pay / Apple Pay: surcharge applies. Both can be funded by a debit card, which would make it a debit surcharge.
- Debit typed into the card fields: the open question above.
Please confirm the debit behavior and I will configure accordingly.
Thanks,
DJ Preble
Event Edge Rentals, LLC
Thanks Jen — that first line answers it, and it raises a bigger question I need to close out.
If the software cannot tell the difference between methods, then: does the 3.000% credit card surcharge also get applied to a DEBIT card typed into the normal card fields? Payment Preferences only has one "Credit Card Surcharge" field, with separate fields for PayPal and ACH but nothing for debit. So does IO do a BIN lookup and skip the surcharge on debit, or does it surcharge every card that runs through the credit path?
This matters more than the Afterpay question. Debit surcharges are prohibited by the Visa, Mastercard, Amex and Discover network rules in all 50 states, and our signed rental agreement tells the customer in writing that "Debit cards, cash, and checks carry no processing fee." If IO surcharges debit, we are breaking network rules and contradicting our own contract on every debit transaction, and I need to turn the surcharge off today.
One correction for the record, in case that reply gets reused for another customer: Georgia does NOT prohibit credit card surcharges. The Georgia Attorney General's Consumer Protection Division publishes guidance permitting them, capped at what the merchant actually pays to accept the card, with disclosure at the point of entry, at the point of sale, and on the receipt. https://consumered.georgia.gov/ask-ed/2021-03-03/credit-card-surcharges
Where I think this leaves us:
- Afterpay: surcharge applies and cannot be excluded. Afterpay's own merchant terms prohibit surcharging, so we will most likely disable Afterpay.
- Google Pay / Apple Pay: surcharge applies. Both can be funded by a debit card, which would make it a debit surcharge.
- Debit typed into the card fields: the open question above.
Please confirm the debit behavior and I will configure accordingly.
Thanks,
DJ Preble
Event Edge Rentals, LLC
There isn't a spot on there that asks if the customer wants this ran as a debit, so it will always be a credit and yes the surcharge will be applied. So anything submitted under the CC option would have the surcharged applied.
There isn't a spot on there that asks if the customer wants this ran as a debit, so it will always be a credit and yes the surcharge will be applied. So anything submitted under the CC option would have the surcharged applied.
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