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In the world of digital payments, financial institutions are constantly balancing innovation with regulation. As recurring card payments become more common, understanding the rules around convenience fees isn’t just about staying compliant; it’s about leading the right way.
At SWIVEL, we believe trusted guidance for every transaction starts with clarity. That’s why we’re breaking down what you need to know about convenience fees and recurring payments, and how we help our clients stay ahead.
What the Card Brands Say About Convenience Fees
Card brands have various rules around convenience fees, surcharges, etc. Some of those rules include:
- Not being able to charge a convenience fee that differs by payment method (ACH vs Debit)
- Not being able to use a credit card to pay for a debt repayment
- Being able to charge a different fee by a different channel
- Convenience fees must be a flat or fixed amount and disclosed prior to the transaction
- Not charging a convenience fee on recurring transactions for debit cards
If found in violation of these rules, they can;
- Impose fines to both the financial institution and SWIVEL as the payment processor, assessed both for the number of merchant accounts and the number of transactions
- Shut down the MIDs for the financial institution and, in extreme cases, for all of SWIVEL clients
What we are currently seeing from Card Brands:
- We have confirmed these rules with Visa and Mastercard to ensure our assessment is correct
- We have confirmed that they intend to enforce when violations are found
- They have recently enforced other actions, including rules around Account Funding Transaction types
- They are focusing on anything that gives them a competitive disadvantage against ACH transactions, open banking, and instant payments.
Visa has increased enforcement in recent years due to a rise in complaints and improper implementations. This rule is easy to overlook but costly to ignore.
Sources: Fiserv Whitepaper, 3D Merchant Blog
What You Can Do Instead
At SWIVEL, we help financial institutions offer recurring card payments without the risk. Our platform is built with compliance in mind, including:
- Smart card filtering to prevent misuse
- Built-in safeguards aligned with card brand rules
- Account reviews to understand the best fee setup for your financial institution
We don’t just enable payments—we help you move money better.
Why SWIVEL Is Different
Backed by SWBC, SWIVEL brings decades of financial expertise to every transaction. Our team of compliance specialists works closely with clients to ensure every payment experience is secure, seamless, and fully aligned with industry standards. Because at SWIVEL, leading the right way is the only way.
Let’s Simplify Compliance Together!
Recurring payments are here to stay. With SWIVEL, you can offer them confidently, knowing your institution is supported by a team that puts compliance first. Reach out to your SWIVEL Representative today to learn more.
