Selecting the right Service Fee method ensures your fees are fair, transparent, and beneficial for both your business and your customers.

The Automatic method

When you enable the "Automatic" method, the system automatically calculates an appropriate service fee. This fee is then added to the transaction total and clearly displayed to your customer before they make their payment. The main objective of this method is to create an optimised service fee that will cover all, or at least most, of the typical administrative costs that your business would usually shoulder for that transaction.

While the aim of the "Automatic" method is to reduce your direct transaction-related administrative costs as much as possible, it's important to note that in certain cases, this may not always result in a zero net cost for every single transaction. The entire calculation and application process is handled automatically to provide you with a convenient way to manage these costs.

The "Set Your Own Fee" method

This method gives you full control. You define the specific service fee amounts or percentages that will be applied based on your own settings. These fees are calculated and shown to your customer before they complete their payment.

You can set up distinct fee configurations for various aspects of your transactions, such as:

Features: like payments made via Links, In-Person, or Invoices.
Currency Handling: for transactions processed in currencies different from your account's base currency.

Check out Markup to learn about payment method-specific fees.

How the fee is calculated

You establish specific fee configurations for various transaction aspects, choosing either a percentage (e.g., 2.50%) or a fixed monetary amount (e.g., AED 5.00) for each. When a transaction occurs, its details are checked against your fee configurations. If a match is found, the fee you defined is calculated based on the relevant transaction subtotal (after any discounts). This calculated service fee is then added to that subtotal, and the grand total is always clearly displayed to your customer before they proceed to pay, ensuring full transparency.

For instance, if you've set a 2.50% service fee that applies to a transaction, and the relevant subtotal of items is AED 100.00, an AED 2.50 service fee would be calculated, making the grand total AED 102.50 shown to the customer before payment. Similarly, if you set a fixed AED 5.00 fee applicable to the transaction, and the subtotal is AED 100.00, the grand total displayed to the customer before payment would be AED 105.00.

Should a particular transaction meet the criteria for multiple fee settings you've created, a fee will be applied based on a specific order of priority; for example, the most specific fee setting (for example, other currencies) might take precedence over a more general one (for example, Link, In-Person, or Invoice).

Important Calculation Details

It's important to understand what the Service Fee is calculated on.

Based on Subtotal After Discounts

The Service Fee is calculated based on the final subtotal of all your items or services, after any applicable discounts have been applied to that subtotal. For example, if your customer's items add up to an initial subtotal of AED 200.00, and an overall 10.00% discount is applied, the discounted subtotal becomes AED 180.00. A 2.00% service fee would be calculated on that AED 180.00 discounted subtotal.

Does Not Apply to Taxes or Tips

The Service Fee is not applied to any taxes or tips that are subsequently added to determine the final total amount. These are always handled separately and added on top of the subtotal and service fee.

Important Considerations

Legal and Regulatory Compliance

Some regions have rules governing surcharge practices, so it's important to confirm that adding a Service Fee is permitted in your jurisdiction. Always ensure that your approach to surcharging aligns with local and network regulations to avoid potential compliance issues.

Customer Experience

While passing on fees can help protect your bottom line, transparent communication with your customers is essential. Make sure they understand why the Service Fee is being added so you can prevent any confusion or dissatisfaction that could arise from unexpected charges.

Pricing Strategy

Deciding how much to charge as a Service Fee can be a balancing act between covering your costs and staying competitive. We recommend experimenting with different fee structures, from small flat fees to modest percentages, to find the optimal approach for both your business and your customers.