Processing fees help you recover the cost of credit card transactions by adding a transparent fee to relevant payments. Using this feature, you can automatically apply a fee as a percentage of the invoice amount when members or companies pay with a card. Processing fees apply exclusively to card payments and do not support other payment methods, such as bank transfers, checks, or point-of-sale (POS) payments.
If you manage a coworking space where credit card fees impact your bottom line, you may find this tool valuable. In this article, you will learn how to set up processing fees, apply them correctly, and understand key system behaviors when using this feature.
Important: Merchants can apply surcharges where permitted by federal and state laws. However, before charging fees, clear customer notification, such as prominent signage or explicit terms in agreements, is required.
Before you start
Summary
Set up processing fees for credit card payments.
Choose the percentage fee for different card types, including Visa, Mastercard, and American Express.
Link processing fees to a Billing Plan to track revenue correctly.
Apply fees automatically to unpaid invoices once credit card details are added.
Understand how partial payments and alternative payment methods affect processing fees.
Turn off processing fees when needed and see how the system handles existing invoices.
When and why to use processing fees?
If you want to recover the transaction costs charged by credit card providers without manual adjustments, processing fees help you do this automatically. You may use this feature if your space processes numerous credit card payments and you want to avoid hidden costs that could impact your finances.
What you can achieve
With processing fees, you can set automatic charges for credit card payments to cover transaction costs without manual work.
You can:
Define a default fee and custom fees for Visa, Mastercard, and American Express.
Link fees to a specific Billing Plan so they are tracked under the correct revenue account.
Apply fees to all unpaid invoices when card details are added, ensuring no manual edits are needed.
For example, if a member adds a credit card after you have issued an invoice, the system will adjust the invoice to reflect the correct fee. If a member pays part of an invoice with a card and the rest with another method, only the card portion will include a fee based on the first payment method.
Processing fees do not apply to payments made by bank transfer, check, PayPal, or through hosted gateways. The system removes any card fee if a non-card method is chosen.
How do processing fees work?
Depending on the payment method, processing fees may be different. Here are explanations of the different processing fees:
Automatic invoice fees:
Fees are generated:
If a card is added as a payment method, and your preferred payment method is set to Auto.
If your preferred payment method is set to Card (regardless of whether you have a card added or not.
Fees are not generated if you don't have a card added as a payment method.
Manually generated invoices:
Fees are excluded from invoices when card details are missing or payment methods are not specified during invoice creation.
Fee calculation:
Processing fees are calculated based on the total invoice amount, regardless of the charged card type.
Adding payment details later:
If payment details are added after an invoice is generated but remain unpaid, the system will adjust processing fees based on the new payment method.
Disabling processing fees:
If you turn off the processing fees feature but have used it for a while, previously added fees will be handled as follows:
Paid invoices: Fees paid using non-card methods are removed.
Unpaid invoices: No fees will be added when paying with cards.
Billing Lock Date:
If a billing lock date is activated, locked invoices cannot have fees added. Notifications are provided in the Admin Portal and via email when this situation arises.
Partial payments:
Fees depend on the first payment method used:
If the first payment is made with a credit card, fees will be added.
Subsequent payments made with a credit card will not incur additional fees if the first payment was made using a non-card method.
Alternative payment methods:
Fees do not apply to alternative payment methods, such as PayPal or Hosted Payment Gateways.
Any existing fees are automatically removed.
Set up processing fees
To set up processing fees, follow these steps:
Go to Settings > Billing > Billing Rules and scroll down to the We'll generate processing fees section.
Turn on Automatically to activate automatic fees added to credit card charges. Additional fields will appear for configuring automatic fee settings:
Plan – Select a plan that will be used as the template plan for processing fees. This allows you to specify the payment account with which you would like to have these fees associated. Learn how to add Billing Plans →
Fee – This section allows you to set a fee as a percentage (%) of the invoice charge. Four fields are available: Default, Visa, Mastercard, and American Express. Each one specifies a certain fee, depending on the type of card that is used for the payment. The Default fee will be used for any other cards or cards without a specified fee percentage.
When the processing fees are set up:
The fees will apply to all previously created invoices that have not yet been paid.
The fees will automatically apply to all invoice payments processed after the processing fees have been set up.
These fees will also appear in the order summary.
Tips for success
Always check your local and national laws before activating processing fees. In many regions, clear notice is legally required.
Use clear terms in member agreements and post visible notices if processing fees apply.
Set specific fees for card types if your provider charges different rates for Visa, Mastercard, or American Express.
Please note that processing fees are applied to invoices at the time of payment. Therefore, turning off this feature prevents fees from being applied to future payments.
If a billing lock date is in place, the system cannot add processing fees to locked invoices.
Select a clear and well-labeled billing plan for processing fees to ensure they are easily reported in your financial records.
FAQ: Processing Fees
What are processing fees?
What are processing fees?
Processing fees are additional charges applied automatically to credit card payments, helping you cover transaction costs associated with these payment methods.
Can I set different fees for different card types?
Can I set different fees for different card types?
Yes, you can specify different percentages for Visa, Mastercard, and American Express and set a default fee for other card types.
Are processing fees applied to all invoices?
Are processing fees applied to all invoices?
Processing fees apply only to invoices paid with credit cards. They are not added to invoices if no card details are provided or alternative payment methods are used.
What happens to processing fees if an invoice is partially paid?
What happens to processing fees if an invoice is partially paid?
Processing fees depend on the initial payment method. If the first payment is by credit card, fees apply. Subsequent credit card payments will not add fees if the first payment used another method.
What happens if I turn off the processing fees after using them?
What happens if I turn off the processing fees after using them?
Paid invoices: Fees paid via non-card methods will be removed.
Unpaid invoices: No new fees will be added to card payments.
Are there legal considerations for charging processing fees?
Are there legal considerations for charging processing fees?
Yes. Before applying these charges, ensure compliance with federal and state laws and clearly inform customers of processing fees through signage or agreement terms.
How are processing fees handled when a billing lock date is active?
How are processing fees handled when a billing lock date is active?
Additional fees cannot be applied to invoices that are locked due to a billing lock date. If this occurs, you will receive notifications via email and on the Admin Portal.