Convenience Fee Calculations

TabaPay provides for convenience fees on both purchase and disbursements. This document describes the type of convenience fees TabaPay’s processing system supports.

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Subject to Compliance Approval

TabaPay Clients will have to vet their use of Convenience Fee with TabaPay's Compliance team in order to avail this feature. Vetting will be broadly across these areas for Convenience Fee on debit card processing.

• Network rules on convenience fees across card brands
• Restricting use of convenience fee in an alternate payment channel only
• Consideration of state-level restrictions
• Restrictions on use cases (for e.g. recurring payments)

Setting Convenience Fee

The convenience fee can be passed to TabaPay on each transaction or configured in the TabaPay system.

• If the convenience fee is unique on each transaction the client will pass in the memo field the convenience fee in the format:

"memo":"convfee=x.xx"

• If the convenience fee is to be configured and driven on the TabaPay system, at time of boarding the convenience fee formula is established. The convenience fee must be determinable in software-formulaic. TabaPay supports a fixed amount and/or a variable amount based on the transaction amount. Examples below:

• $0.10 for all Purchases
• $0.10 + 0.1% for all Purchases
• $0.10 + 0.15% for all Purchases
• $0.15 for all disbursements
• $0.20 + 0.1% with cap of $2.00 for all disbursements

Convenience fees can be applied to the entire ISO, merchant ID, or a specific string in the TabaPay memo field (API memo field on create transaction) for a given ISO or MID.

Purchase Convenience Fees

1. Merchant establishes the convenience fee with TabaPay or provide on each transaction.
2. The merchant's create transaction PULL request must be for the purchase amount + convenience fee.
3. If convenience fee is charged on a transaction, then:
   a. The transaction amount less convenience fee will settle to the merchant’s settlement account
   b. The convenience fee will be deposited separately to their fee account – daily.
   c. The transaction and summary reports will show the transaction amount/settled amount less the convenience fee and the convenience fee is shown in a separate field (convenience fee)
   Example below:

• $100 Purchase with a $5 convenience fee
• Purchase amount pulled from card should be the full $105
• Note the $5 convenience fee in the memo field
• $100 will settle with the end customer and the $5 will go into the merchants account of choice

Disbursement Convenience fees

1. Merchant establishes the convenience fee with TabaPay.
2. The merchant's create transaction PUSH request must be for the purchase amount + convenience fee.
3. If convenience fee is charged on a transaction, then:
   a. The transaction amount less convenience fee will settle from the merchant’s settlement account
   b. The transaction and summary reports will show the transaction amount/settled amount less the convenience fee with the convenience fee is shown in a separate field (convenience fee column).
   c. TabaPay can debit the convenience fee from merchant settlement account and settle to another merchant account or merchant can settle the convenience fee.

• $100 Payout with a $5 convenience fee
• Payout amount should be the full $105
• Note the $5 convenience fee in the memo field
• $100 will settle with the end customer and the $5 will go into the merchants account of choice

Independent Sales Organizations (ISOs)

TabaPay provides the following options for ISOs to bill and collect fees from their merchants. The TabaPay system can collect fees daily from a merchant or collect monthly.

TabaPay can deposit proceeds to the merchant or ISO.

• If proceeds deposited to ISO then ISO is debited daily for interchange and assessments
• If proceeds deposited to Merchant then either Merchant or ISO can be debited for either an MDR or interchange and assessments.

Interchange + network assessments + markup
o Interchange and network assessments are shown for each transaction
o Markup is shown for each transaction and can be a fixed amount (e.g. $0.30) and/or a variable amount (e.g. 1%). Examples are:

• 1% of transaction amount;
  

• $0.30 of transaction amount;
  

• $0.30 + 1% of transaction amount
  

Merchant Discount Rate (MDR)
o MDR is shown for each transaction and can be a fixed amount (e.g. $0.30) and/or a variable amount (e.g. 1%). Examples are:

• 1% of transaction amount;
  

• $0.30 of transaction amount;
  

• $0.30 + 1% of transaction amount
  

• The TabaPay transaction reports show the interchange, assessments, and MDR – but only the MDR is collected for this option.

Process

Paying ISO

1. If daily MDR is collected from merchant then payment to ISO is daily and is equal to MDR less interchange and less assessments.
2. If daily interchange + assessments + markup are collected from merchant then markup is paid to merchant daily
3. If MDR or interchange+assessments collected from merchant monthly then ISO will pay interchange and assessments daily, getting reimbursed at month end and on collecting same from merchant.