Pass on Processing Fee to Customers

Pass on Processing Fee to Customers

Pass on Processing Fee to Customers

Timesavr is able to automatically pass on a portion of your credit card processing fees to your customers when you accept payment by credit card using your Timesavr Stripe account.  When parents process credit card payments through your Stripe account linked to Timesavr, those payments are automatically recorded for you.  Any refunds you give through Stripe are also automatically recorded in Timesavr.  And with the option to pass on the processing fees, an extra charge for those fees is also automatically recorded by Timesavr at the moment the payment is processed. 

Enable Credit Card Payments

If you're not yet processing credit cards using Timesavr, but want to enable it, go to Admin > Finance > Credit Card Payments and either link your existing Stripe account, or create a new Stripe account using the interface provided.  Creating the account requires no approval process, or signatures, as it's a simple online setup process. 

Enable Option to Pass on Fee

If you're already using Stripe, and you want to pass on the processing fees to your families, go to Admin > Finance > Credit Card Payments and enable the option.  You will also need to select a charge item to be used when this fee is added to the customer's invoice.  This charge will be added automatically for you, but you must select a charge item here.  If no charge item is selected, the fee will not be passed onto the customer, even if you have the option enabled.   

Note:  In Canada, the amount you can pass onto your customers is limited to 2.4%, but the Stripe fee is 3.1%, so only a portion of the fee can be passed onto your customers.  In Most US States, the limit is 4% which means the entire fee can be passed on .  See the Limits section at the bottom of this document for more details.  


Note:  There is no need for you to add any fees to the child profiles, as Timesavr will automatically generate the fees when required.  You only need to enable the option, and select an appropriate charge item.  The rest is automatic.

Processing Fee Charge Item

The charge item is required because the processing fee must be listed separately on the invoice, and so the charge item allows Timesavr to generate this charge for you automatically.  If you don't already have a suitable charge item for this charge, you can create one here without leaving the current page, as shown below.  When creating a charge item for this purpose, leave the amount at $0.00, because it will be calculated for you.



How it Works

With the option enabled, your customers will pay a portion of your processing fee, in addition to the amount on their invoice.  In Canada, the maximum amount you can charge a customer is 2.4% which is calculated by Timesavr and inserted as a new line item on their existing invoice.  This means, since the Stripe fee is higher than that, it will not cover the entirety of your processing cost, but it will cover the majority of it.  If you're a US based childcare centre, you may have the entirety of your processing fee covered by the customer, depending on your state.

The processing fee charge is added to the invoice automatically at the moment the payment is processed, so there's nothing you need to do on your end, except enable the option. 

Customers are able to pay by credit card, by clicking the "Pay Invoice" button on their invoice.  This "Pay Invoice" button exists only on the standard invoice, not the PDF invoice, so if you want to give your customers this option, you must email your invoices either from the transaction register (not selecting the printable version), or by going to Finance > Email Invoices.

How the Fee is Calculated

The total processing fee for using Stripe is 3.1% + 30 cents.  If the invoice is $1000.00, and the customer chooses to pay by credit card, the customer will pay $1024.00 ($1000.00 + 2.4%).  The additional $24.00 is then inserted as a new charge on their existing invoice.  This means that they will not see this charge on their invoice unless you email them a new invoice after the fact, because the original invoice will not include it.

With this option enabled, this is how the numbers will look:
  1. The parent pays $1024.00
  2. The processing fees are calculated on the final invoice amount, which is now $1024.00
  3. The processing fees on $1024.00 total $34.70.
  4. Stripe withholds $34.70 from $1024.00, leaving you with $989.30.
With this option NOT enabled, this is how the numbers will look:
  1. The parent pays $1000.00.
  2. The processing fees are calculated on $1000.00.
  3. The processing fees on $1000.00 total $34.00.
  4. Stripe withholds $34.00 from $1000.00, leaving you with $966.00.
So this option would save you $23.30 for a $1000.00 charge, paying just $10.70 instead of $34.00 to process this credit card payment.  Keep in mind that the 30 cent portion of the fee is static, so on larger invoices, you save a slightly larger percentage, but on smaller invoices a slightly smaller percentage than what this example shows.

Limits

In Canada, you are allowed to pass on a maximum of 2.4% to your customers, except in Quebec where this practice is not allowed at all.  In the United States the limit is 4%, however, you may not charge your customers more than the fee you are being charged, for this reason Timesavr will cap this charge at 3.1% for US customers. In Colorado you may pass on no more than 2%.  Massachusetts, Maine, Connecticut and Oklahoma do not allow you to pass on these fees to your customers. 

Currently there is no option to customize the percentage of the fee amount that is charged to the customers.   In Canada, the percentage will always be 2.4% and in the United States it will always be 3.1%.  If your state does not allow a 3.1% fee, you should not use this option, though Timesavr will not technically restrict you.  You are responsible for knowing whether or not you are allowed to use this option.

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