How to add surcharges to an invoice

Being able to accepting credit card payments is good for business but the processing fees can add up quickly. To help offset these costs, Knowify offers a built-in surcharging feature that allows you to pass a percentage-based fee on to your customers when they choose to pay via credit card.

Note: This feature is only available for US-based accounts with an active QuickBooks Payments integration. This feature is currently not supported in MA, NY, CT or PR, based on local regulations.   (Learn more about our free integration to QuickBooks Payments here.)

However, to stay compliant with payment network rules and state regulations, it's crucial to implement this feature correctly. In this guide, we’ll cover best practices and legal considerations to ensure smooth and lawful fee processing. We also recommend consulting with a legal professional to confirm compliance with local laws. You are responsible for your use of the surcharging feature.

What are surcharges?

A surcharge is a charge added to a transaction to cover the costs of accepting electronic payments, such as credit cards. Credit card processing fees may not exceed your cost of accepting payments, and cannot exceed 3% of the purchase price.

Knowify is designed to help businesses manage payment processing costs while maintaining compliance. With our built-in credit card processing fees, you can:

✅ Automatically apply credit card processing fees to credit card payments.

✅ Provide clear customer disclosures before payment is made.

✅ Streamline invoicing and payments in a single platform.

Best Practices for Passing Credit Card Processing Fees to Your Customers

1. Stay Compliant with State Laws & Card Network Rules

• Consult a legal professional to ensure compliance with local and state laws.
• Card networks like Visa and Mastercard require clear disclosure (see below). We will add a surcharge line item to your invoices to help you comply with this requirement, but you are responsible for ensuring all required disclosures are made.
• Our surcharging feature may not be available in all states. You are responsible for reviewing all rules and regulations applicable to surcharging in each state. You are solely responsible for deciding in which states to surcharge your customers

2. Ensure the Fee is Applied Correctly

• The fee should be a percentage-based charge added to credit card transactions only.
• We will prevent you from applying a surcharge to debit card or prepaid card transactions, as card networks prohibit surcharges on these card products.

3. Disclose the Fee Clearly to Customers

• Transparency is key — customers must be informed before they complete a payment and have the opportunity to cancel the payment transaction.

• Example disclosure:

  If you choose to pay by credit card, a processing fee of 3% will be applied to cover processing and administrative costs. No processing fee applies to payments made by check. By submitting payment, you acknowledge and agree to this fee. If you have any questions regarding this charge, please contact us before making a payment.

How to Add Processing Fees to Your Invoices in Knowify

1. Before passing processing fees on to your customers, make sure you update your website and customer communications as needed to provide for disclosures required by state law and card network rules.

2. Go to the Admin section of Knowify and open the section for the QuickBooks Payments integration. (Admin > Customize > Integrations > Online Payments by QuickBooks Payments).

3. Select the option to “Enable functionality to include processing fees in credit card payments.”

   

Note: This feature is only available for accounts with an active QuickBooks Payments integration. (Learn more about our free integration to QuickBooks Payments here.)

When finalizing an an invoice, you’ll now see the option to “Add processing fee for credit card (3%)” in the Invoice Summary. This option will be selected by default. You can always remove the surcharge before sending it to a client by unchecking the box.

When your customer clicks on the payment link in their invoice the surcharge will appear if they select the option to pay by credit card.

Once the invoice has been paid, the payment processing fee will appear as a separate line item on the invoice.

If you have any questions or need assistance please contact our support team today.

Terms of Service

Surcharge

The Services may include, at your election, a feature that allows you to pass a percentage-based fee on your customers when they choose to pay via credit card. These fees are subject to legal requirements and card network requirements. You are solely responsible for compliance with applicable laws, rules, and regulations regarding these card charges, and must review your practices with legal counsel to ensure compliance. You must comply with all applicable card network rules, as may be amended by the card networks from time to time.

You must ensure that each card transaction amount is only for merchandise or services offered by you, including taxes, but without any surcharge, except to the extent such surcharge is allowed by applicable law and card organization rules.

You acknowledge that certain states have statutes and restrictions that apply to assessing card charges. You must only assess these charges in jurisdictions where it is allowed, at a permitted rate, and for permissible card products. You may not assess a charge that exceeds merchant processing costs or 3%, whichever is lower, and must comply with state laws and network regulations.

You must clearly and conspicuously disclose the charge before the transaction is complete and permit the cardholder to cancel the transaction. You acknowledge and agree that such charges must not be assessed on debit card or prepaid card transactions.

You must notify Knowify promptly upon becoming aware of any violation related to these charges, including violations related to disclosures, receipts, or amounts collected.

You are required to obtain our permission and notify the card networks if you plan to implement a [surcharge/service fee] or modify your card charging practices. You may authorize [us or your processor] to notify the card networks on your behalf, but be aware that there is a mandatory notification period of at least 30 days before you can begin assessing such charges.

You acknowledge and agree that you are not exempt from liability in the following situations: (1) if an issuer disputes a transaction due to incomplete or invalid information in the authorization or clearing message; or (2) your responsibility to pay or reimburse us for any: (a) chargebacks; (b) refunds; (c) third-party fees; or (d) fines, assessments, or fees imposed by the card networks, however they are defined by the applicable network.

Indemnification

You agree to defend, indemnify and hold harmless Knowify and its licensee and licensors, and their employees, contractors, agents, officers and directors, from and against any and all claims, damages, obligations, losses, liabilities, costs or debt, and expenses (including but not limited to attorney’s fees) arising from your use of and access to the Service, including any data or Content transmitted or received by you, any other party’s access or use of the Service with your username and password, the assessment of any fees or charges on payment methods, or your violation of these Terms, applicable law, rule or regulation.

Limitation of liability

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL KNOWIFY, ITS AFFILIATES, AGENTS, DIRECTORS, EMPLOYEES OR SUPPLIERS BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS, GOODWILL, USE, DATA OR OTHER INTANGIBLE LOSSES, THAT RESULT FROM THE USE OF, OR INABILITY TO USE, THIS SERVICE. UNDER NO CIRCUMSTANCES WILL KNOWIFY BE RESPONSIBLE FOR ANY DAMAGE, LOSS OR INJURY RESULTING FROM HACKING, TAMPERING OR OTHER UNAUTHORIZED ACCESS OR USE OF THE SERVICE OR YOUR ACCOUNT OR THE INFORMATION CONTAINED THEREIN.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, KNOWIFY ASSUMES NO LIABILITY OR RESPONSIBILITY FOR ANY (I) ERRORS, MISTAKES, OR INACCURACIES OF CONTENT; (II) PERSONAL INJURY OR PROPERTY DAMAGE, OF ANY NATURE WHATSOEVER, RESULTING FROM YOUR ACCESS TO OR USE OF OUR SERVICE; (III) ANY UNAUTHORIZED ACCESS TO OR USE OF OUR SECURE SERVERS AND/OR ANY AND ALL PERSONAL INFORMATION STORED THEREIN; (IV) ANY INTERRUPTION OR CESSATION OF TRANSMISSION TO OR FROM THE SERVICE; (V) ANY BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE THAT MAY BE TRANSMITTED TO OR THROUGH OUR SERVICE BY ANY THIRD PARTY; (VI) ANY ERRORS OR OMISSIONS IN ANY CONTENT OR FOR ANY LOSS OR DAMAGE INCURRED AS A RESULT OF THE USE OF ANY CONTENT POSTED, EMAILED, TRANSMITTED, OR OTHERWISE MADE AVAILABLE THROUGH THE SERVICE; AND/OR (VII) USER CONTENT OR THE DEFAMATORY, OFFENSIVE, OR ILLEGAL CONDUCT OF ANY THIRD PARTY. IN NO EVENT SHALL KNOWIFY ITS AGENTS, DIRECTORS, EMPLOYEES, SUPPLIERS, OR LICENSORS BE LIABLE TO YOU FOR ANY CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES OR COSTS IN AN AMOUNT EXCEEDING THE AMOUNT YOU PAID TO KNOWIFY.

IN ADDITION, KNOWIFY SHALL NOT BE LIABLE FOR ANY DAMAGES OR LIABILITIES ARISING FROM ANY CHARGES ON ANY PAYMENT METHODS, INCLUDING BUT NOT LIMITED TO, ANY CLAIMS RELATED TO THE IMPROPER APPLICATION OR DISCLOSURE OF SERVICE FEES, SURCHARGES, OR ANY FINES OR PENALTIES IMPOSED BY CARD NETWORKS OR REGULATORY AUTHORITIES FOR SUCH PRACTICES OR YOUR ACTS OR OMISSIONS.

THIS LIMITATION OF LIABILITY SECTION APPLIES WHETHER THE ALLEGED LIABILITY IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY, OR ANY OTHER BASIS, EVEN IF KNOWIFY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE FOREGOING LIMITATION OF LIABILITY SHALL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW IN THE APPLICABLE JURISDICTION. SOME STATES DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES OR THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO YOU. THESE TERMS GIVE YOU SPECIFIC LEGAL RIGHTS, AND YOU MAY ALSO HAVE OTHER RIGHTS WHICH VARY FROM STATE TO STATE. THE DISCLAIMERS, EXCLUSIONS, AND LIMITATIONS OF LIABILITY UNDER THESE TERMS WILL NOT APPLY TO THE EXTENT PROHIBITED BY APPLICABLE LAW.

The Service is controlled and operated from its facilities in the United States. We make no representations that the Service is appropriate or available for use in other locations. Those who access or use the Service from other jurisdictions do so at their own volition and are entirely responsible for compliance with all applicable United States and local laws and regulations, including but not limited to export and import regulations. You may not use the Service if you are a resident of a country embargoed by the United States, or are a foreign person or entity blocked or denied by the United States government. Unless otherwise explicitly stated, all materials found on the Service are solely directed to individuals, companies, or other entities located in the United States.