What is FedNow® Surcharge? How Does It Work?
Revolutionizing Shifting Payment Processing Fees to the Payer
FedNow® Surcharge – A Payment Model for
Instant Transactions with Payer-Paid Processing Fees
Revolutionizing Instant Payments with
FedNow® Surcharge
Traditional payment processing often leaves
merchants burdened with transaction fees, cutting into their profit
margins. Businesses relying on credit cards, ACH transfers, and
conventional invoicing systems face high processing costs,
chargeback risks, and delayed payments.
With the FedNow® Surcharge model, businesses can:
✅ Enable Payer-Paid Merchant
Processing Fees for seamless cost recovery
✅ Offer
instant A2A Credit and Debit transactions via FedNow®
✅
Use POS, MOTO (Mail Order/Telephone Order), Auto-Bill Pay, and
Invoicing
✅ Leverage ISO 20022 messaging for secure
and automated payments
✅ Reduce chargebacks and
speed up settlement for B2B, C2B, and B2C transactions
With TodayPayments, businesses can implement FedNow® surcharges, ensuring a cost-effective, fast, and secure payment processing system.
FedNow® Surcharge vs. Traditional Payment Processing
FedNow® Surcharge is a payment processing model where the payer covers the merchant’s transaction fees. This model is increasingly popular in industries where businesses want to accept digital payments without absorbing processing costs.
✔ The Payee (merchant
or business) sets a FedNow® Surcharge – typically a
small percentage of the transaction.
✔
The Payer (customer or client) covers the processing fee
at checkout.
✔ Funds settle instantly,
ensuring immediate transaction completion.
✔
Applies across multiple payment channels: POS, MOTO,
Auto-Bill Pay, and invoicing.
Why Businesses Are Adopting the
FedNow® Surcharge Model:
✔
Reduces transaction costs for merchants
✔
Encourages real-time digital payments over costly credit
card transactions
✔ Enables fee transparency
while maintaining competitive pricing
Ask us how:
"How to implement FedNow® Surcharge
payment processing for businesses"
"Best surcharge
model for instant A2A transactions with FedNow®"
"POS, MOTO, Auto-Bill Pay, and invoicing with FedNow®
Surcharge"
"ISO 20022 messaging for secure and
real-time payment reconciliation"
"How businesses
can pass payment processing fees to customers using FedNow®"
FedNow® Surcharge vs. Traditional Payment Processing
Why This Model Is More Cost-Effective
|
Feature |
FedNow® Surcharge Model |
Traditional Merchant-Paid Fees |
|
Processing Speed |
Instant (24/7/365) |
ACH: 1-3 days, Credit Cards: 1-5 days |
|
Merchant Processing Fees |
Paid by Payer (Customer/Client) |
Absorbed by Business |
|
Bank Reconciliation |
Automated via ISO 20022 Messaging |
Manual reconciliation required |
|
Chargeback & Fraud Risk |
Low (FedNow® payments are final) |
Higher risk due to credit card disputes |
|
Customer Payment Experience |
Transparent pricing with an optional surcharge model |
Hidden processing fees passed to merchants |
Why Businesses Are Switching to
FedNow® Surcharging:
✔
Reduces overhead costs by shifting fees to the payer
✔ Provides instant transaction settlement,
improving cash flow
✔ Minimizes fraud and
chargeback risks compared to credit card payments
How FedNow® Surcharge Works for POS, MOTO, Auto-Bill Pay & Invoicing
Seamless Integration for Multiple Payment Channels
With TodayPayments' FedNow® integration, businesses can implement surcharges in multiple payment environments:
🔹 Point of Sale (POS):
Charge customers at checkout for in-person transactions.
🔹 Mail Order / Telephone Order (MOTO):
Apply surcharges to phone-based transactions.
🔹
Auto-Bill Pay: Automate recurring payments with
FedNow® while passing fees to the payer.
🔹
Invoicing & Online Payments: Include an embedded
.html payment link where the payer covers the surcharge.
How It Works:
✔ Step 1: The business sets a FedNow®
surcharge on transactions
✔ Step 2:
The customer selects FedNow® as the payment method and
sees the surcharge
✔ Step 3: The
total transaction amount (including surcharge) is processed
instantly
✔ Step 4: Funds are
settled immediately, and businesses receive full payment
without deductions
This model eliminates hidden processing costs for businesses while giving customers an efficient, real-time payment option.
Security & Compliance with ISO 20022 Messaging
Ensuring Transparency, Fraud Protection, and Secure Transactions
Unlike traditional payment processing models, FedNow® Surcharge transactions offer a fully secure and automated solution.
✔ ISO 20022 Messaging
– Ensures structured, real-time transaction tracking.
✔ Automated Payment Reconciliation –
Eliminates manual processing errors.
✔
End-to-End Encryption – Protects against fraud, hacking,
and unauthorized access.
✔ Final &
Non-Reversible Transactions – Eliminates chargeback
risks.
✔ Regulatory Compliance –
Meets all federal standards for secure payments.
With TodayPayments, businesses can transition to real-time, automated payment collection with cost-efficient surcharging options.
The payment processing method application of surcharging or cash discounts to FedNow® transactions is not explicitly addressed in current Federal or state laws, which primarily focus on credit card transactions.
However, the principles may be analogous:
• Surcharging: Applying a surcharge to FedNow® payments could be subject to similar regulations as credit card surcharges, depending on state laws. Merchants should exercise caution and consult legal counsel before implementing such fees.
• Cash Discounts: Offering discounts for using FedNow® payments is generally permissible nationwide, aligning with the legal status of cash discount programs.
Upgrade to FedNow® Surcharge Payments with TodayPayments
For businesses looking to reduce payment processing costs, improve cash flow, and implement instant transactions, the FedNow® Surcharge model is the ultimate solution.
With
TodayPayments, businesses can:
✔
Enable payer-covered processing fees for instant payments
✔ Accept payments across POS, MOTO, Auto-Bill
Pay, and invoicing
✔ Provide a real-time,
low-cost alternative to credit card transactions
✔
Automate reconciliation and eliminate chargeback risks
✔ Offer secure, final payments with FedNow® and
ISO 20022 messaging
🚀 Upgrade your payment processing—implement the FedNow® Surcharge model today! 🚀
Creation Request for Payment Bank File
Enhance Your FedNow Surcharge Payment Requests with FedNow’s ISO 20022 Messaging
Streamline Payments with Advanced Request for Payment Options:
Harness the power of FedNow's Request for Payment system to transform how you manage invoices and remittances. Our platform supports diverse data integration options, allowing payees to incorporate detailed invoice data directly within the RfP message or link to a comprehensive Merchant Page.
Flexible Invoice Details with ISO 20022 Messaging:
Leverage the flexibility of ISO 20022 messaging standards in our RfP system. You can choose to display crucial payment details directly in the message with a concise 140-character description, or through a dynamic "Hyper-Link" leading to a detailed Merchant Page. This Merchant Page can be hosted either on your website or TodayPayments.com/HostedPaymentPage.html through our seamless integration solution.
Customizable Merchant Pages for Enhanced Customer Experience:
Create a Merchant Page that not only details all the MIDs you own but also presents these options attractively to your customers through the RfP. This customization ensures that whether your payer opts for Real-Time Payment, Same-Day ACH, or Card transactions, they can easily navigate and complete their payments through a simple click on the hyperlink provided on your Merchant Page.
Call us today and receive the .csv or .xml FedNow® or Request for Payment (RfP) file you need—all during your very first phone call! We guarantee that our comprehensive reports integrate flawlessly with your bank or credit union. As pioneers in recognizing the benefits of RequestForPayment.com, we have stayed years ahead of our competitors. Although we are not a bank, our role as an "Accounting System" within the Open Banking ecosystem enables us to work with billers to create effective RfP files that seamlessly upload to the biller's online banking platform. U.S. companies rely on our expertise to learn how to deliver the RfP message directly to their bank with precision.
Our advanced solution, Today Payments' ISO 20022 Payment Initiation (PAIN.013), demonstrates how to create a Real-Time Payments Request for Payment file that sends a clear message from the creditor (payee) to its bank. Most financial institutions support the import of messaging and batch files for both FedNow® and Real-Time Payments (RtP), ensuring smooth processing. Once the file is correctly uploaded, the creditor’s bank processes the payment through a secure "Payment Hub"—with The Clearing House serving as the RtP Hub—and relays the message to the debtor's (payer's) bank. This streamlined approach not only accelerates transaction processing but also enhances transparency and reliability for all parties involved.
... easily create Instant Payments RfP files. No risk. Test with your bank and delete "test" files before APPROVAL on your Bank's Online Payments Platform. Today Payments is a leader in the evolution of immediate payments. We were years ahead of competitors recognizing the benefits of
Same-Day ACH and Real-Time Payments funding. Our business clients receive faster availability of funds on deposited items and instant notification of items presented for deposit all based on real-time activity. Dedicated to providing superior customer service and industry-leading technology.
Contact Us for FedNow Surcharge payment processing pricing
