Introduction

Surcharging is the practice of adding a small fee to credit card transactions to cover the processing costs incurred by the business. This allows Pros to recover the fees they pay to accept credit card payments without absorbing the cost themselves.

OpenSolar allows Pros in certain markets to pass on credit card processing fees to their customers. This article explains how surcharging works and what you need to know before using it.

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Surcharging Availability

Surcharging is subject to regulations by payment method, region, and card issuer. With CashFlow smart surcharging, we make it easy for you to stay compliant. When you enable smart surcharging, we’ll pass on the maximum fee possible to your customer.

Payment Method

You can use surcharges for transactions made with credit cards. 

Surcharging is not allowed for debit card transactions, in line with regulation, although debit cards incur some fees. If you do not want to incur debit card fees, you can remove debit cards from your accepted payment options. Learn more about CashFlow payment milestone configuration and applying them to projects.

Region

Surcharging is disabled in the following states due to local regulations:

• Connecticut
• Maine
• Massachusetts
• Oklahoma
• Puerto Rico

Surcharging is regulated by the project address, rather than your business address. If your business operates across multiple states, smart surcharging will manage the differences in regulation on your behalf.

Card Issuer

Credit card surcharges are also capped by the card issuer: 

• Visa: 3%
• Mastercard: 4%

Surcharge Calculations

OpenSolar automatically calculates the surcharge amount based on the lowest of:

• Your credit card processing fees (as per your CashFlow pricing agreement)
• All applicable regional caps / restrictions for the location of the project address
• All applicable card caps based on the card information submitted by the customer

If the credit card fee exceeds the maximum amount that can be passed on to your customer, you will be charged the difference. For example, if a payment on a project in Colorado had a 2.7% fee, the customer would see a 2% surcharge (the maximum surcharge in CO), and you would be charged the remaining 0.7%. 

OpenSolar will work to keep our surcharging rules updated to reflect any changes in regulation that we learn about. Please let us know about any changes in surcharging regulations that may impact your business.

We encourage you to stay up-to-date on regulations in the regions in which your business operates, and make informed decisions about surcharging. 

Enabling and Using Surcharging

Surcharging defaults

In most states in the US, the default CashFlow configuration will allow surcharging-enabled credit cards for all milestone payments. OpenSolar will not apply surcharging to projects located in states that we know do not allow it.

Note: If your organization is located in a state with restricted surcharging (see region list above), we have removed credit card payment options from M2+ milestones in the default CashFlow configuration. 

Configuring Smart Surcharging

You can enable and disable surcharging for each payment milestone on a project by going to CashFlow > Configure > Payment Milestones. For each milestone within a scheme, you can toggle the surcharging option on or off. 

You can also enable or disable individual payment methods for each milestone. To disable credit cards, select the “Accepted Payment Methods” section to expand the full list of available payment methods, and unselect each Credit Card option on the list.

Setting up Mastercard surcharging

If you plan to use surcharging with standard credit cards (Visa/Mastercard), you should notify Mastercard that you intend to start surcharging by filling out this form.

We recommend that you wait 30 days after submitting this form to allow standard surcharging to comply with Mastercard’s notification rules. You can manage credit card settings by configuring your Payment Milestones.

Operating in Surcharging-Restricted States

In solar, we know that one size doesn’t fit all. We’ve made it easy to set up configurations customized for different surcharging regulations and customer needs.

If your organization is located in a state where surcharging is restricted (see region list above), credit cards are disabled by default for all M2+ milestones when you activate CashFlow. This provides you with the opportunity to enable credit cards to some or all of your projects, but protects you from incurring credit card fees in the default configuration.

If you operate across multiple states with different surcharging rules, you may want to set up different CashFlow configurations that are optimized for the rules. 

For example, let’s consider a solar installer based in CT (surcharging not allowed) that also operates in NY (surcharging allowed):

• This installer keeps the default CashFlow configuration settings, with credit card options removed from M2+ milestones.
  • This protects them from credit card fees on large M2+ payments in CT, where they cannot pass on the fee to the customer.
• However, the installer also sets up a second configuration scheme, named “New York CashFlow Configuration,” and adds surcharging-enabled credit card options to each M2+ milestone. 
  • When the installer creates a new project in NY, they override the CashFlow default configuration and select the NY configuration.

Additional Resources:

• CashFlow Payment Milestone Configuration
• Applying CashFlow Payment Milestone Configurations to Projects

Credit Card Surcharging Resources:

• Mastercard merchant surcharge rules
• Visa merchant surcharge Q&A