Credit Card Surcharges

The credit card surcharge is an additional fee that merchants can apply to recover processing costs. This surcharge is determined by payment network (Visa or Mastercard). The amount is tracked for accounting and reporting purposes to ensure transparency and compliance.

The credit card gateway provider, for example, CenPOS, must perform these actions as a prerequisite:

  • Enable the surcharge feature for the distributor.
  • Define the surcharge percentage for each card brand.
  • Inform customers about the surcharge.

In Distribution SX.e, the Surcharge Account must be specified on the SA Credit Card Processor Setup and Product Warehouse Description Payment Types Setup screens. The Surcharge Account tracks surcharges collected from credit card transactions. When a credit card transaction is posted to the General Ledger, the surcharge information is associated with this account. If Surcharge Account is not specified, the surcharge information is added to a suspense account. A suspense account is a temporary account that holds transactions when the classification is not clear.

The surcharge is applied to an order, when the One-Time Sale or One-Time Authorization transaction is made using a credit card from the Sales Order Entry screen.

Note: When surcharge is applicable for credit card transactions, the backorders are not automatically tendered and must be manually tendered on the Sales Order Entry screen.

When a One-Time Sale or One-Time Authorization transaction is initiated using a credit card, the Surcharge Disclosure window is displayed with the surcharge details such as, surcharge percentage and amount applied. The information required to disclose the surcharges to the customer is also displayed according to the surcharge disclaimer regulations. The customers can select one of these options:

  • Submit: To accept the surcharge and proceed with the authorization.
  • Cancel: To avoid the surcharges and pay using other methods, such as debit card or Accounts Receivable (A/R).

After authorization is completed, the Credit Card Web Payment form is displayed, with the preview of the receipt including surcharge in transaction details. If the Done option is selected to complete the authorization, the Web Response window is displayed with transaction details.

When a credit card transaction is completed, this information is updated to the General Ledger (GL):

  • The Accounts Receivable (A/R) payment is created and do not include the surcharge.
  • The GL posting is created including the surcharge.

  • A surcharge amount distribution is created for the surcharge account, the surcharge liability account is credited with the surcharge amount, and a journal entry is created for the surcharge amount.

    Note: The surcharge account must be specified for the corresponding credit card processor on the SA Credit Card Processor Setup screen.

The surcharge information is displayed for a sales order on:

  • The Credit Card Details and Tender History Details sections of the Sales Order Inquiry - Header screen.
  • The Order Totals section of the Sales Order Inquiry - Totals screen.
  • Format 1 and Format 4 reports.
  • The Sales Order Master List Report.