what is a service fee and why are they important?
Service Fees are charged by businesses when consumers pay with electronic payment methods rather than by standard forms of payment such as cash and checks. Service fees can be set as a percentage of the transaction amount – typically 2-3% – or a fixed dollar amount and must be disclosed to the consumer in advance.
Many businesses choose to charge service fees in order to cover the costs of payment processing. For example, if a business pays 2.90% card processing fees, implementing a 3% service fee can offset the cost of processing, thereby enhancing EBITDA and driving enterprise growth. This framework is compliant in both the US and Canada, ensuring businesses can scale efficiently.
advantages of service fees
Service fees offer numerous benefits for businesses.
In addition to offsetting processing costs, service fees are seamlessly integrated into your ERP software, applied automatically, and systematically, ensuring easy reconciliation. They provide a fully compliant checkout system applicable to all payment types and channels, significantly reducing processing costs.
To implement a service fee program, businesses should connect with their AMCS representative to update their account and ensure compliant language is used on their platforms. This straightforward process can be quickly executed, adding value to your bottom line, and supporting sustainable business growth.
what industries are using service fees?
Service Fees have been implemented across several major industries such as Waste Management and Recycling, Utilities, Landfills, Construction Services, and dozens more.
what payment methods do service fees apply to?
Service fees apply to all electronic payment types. During AMCS’ consultation with your business, we can determine the appropriate level for each payment type, including credit cards and EFT/ACH. These include online and in-person payments, the goal being to ensure consistency and continuity across all payment channels within your organization.
why is it important to have an integrated digital solution for service fees?
Having an integrated digital solution for service fees is essential because it simplifies the process for both you and your customers. The service fee is automatically offered, integrated, and reconciled, making it a seamless addition to your business operations. This approach not only enhances profitability but also reduces the administrative burden. If your business is ready for it, implementing an integrated digital solution for service fees is the best solution.
how to implement service fees:
AMCS always advises our customers to use compliant language before implementing and to notify their customers at least 90 days before adopting it to ensure the best user experience. Implementing a Service Fee program is easy and available across several AMCS solutions such as Platform, Trux, Tower, and Utility Billing.
While the rules around service fees can seem complex, our webinar aims to simplify and clarify their implementation. Reach out to us for more detailed support and to start benefiting from service fees today. You can watch the full 30-minute session here. To learn more about our integrated digital payment solution AMCS Pay, click here.