Service Fee

The Service Fee feature allows you to add a small fee to transactions, which your customers pay on top of the original amount. This helps you manage costs associated with accepting payments, administrative expenses, or other operational overheads by including them in the transaction, rather than your business absorbing them entirely. It gives you more control over your pricing and helps protect your margins.

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How the Service Fee Works

The Service Fee offers two distinct methods, giving you the flexibility to choose the approach that best suits your business: Automatic and Set Your Own Fee. Once enabled, the feature works by adding an additional fee to the transaction total. This fee is calculated and shown clearly to your customer before they make their payment, ensuring complete transparency.

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Enabling the Service Fee

You can enable the Service Fee by selecting one of the two available methods. Toggling on your preferred method activates the feature.

• ‘Automatic’: Choose this for an optimised service fee to be applied for you
• ‘Set Your Own Fee’: Choose this to define custom fees yourself.

Activating either of these methods means the Service Fee feature is live and will apply to subsequent transactions based on your chosen setup.

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Choosing the Right Method for Your Business

• Choose Automatic if you prefer a simple, hands-off approach where Nomod optimizes the fee for you to help cover your general administrative costs per transaction.
• Choose Set Your Own Fee if you want more granular control to define specific fees for different scenarios, such as for different features (Link, In-Person, Invoice) or for handling other currencies and alternative payment options.

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”Automatic” Method Explained

When you enable the “Automatic” method, Nomod automatically calculates an appropriate service fee. This fee is then added to the transaction total and clearly displayed to your customer before they make their payment. The fee is optimized to help your business cover its administrative costs associated with that transaction.

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How is the fee calculated in the “Automatic” method?

In the “Automatic” method, the service fee is dynamically calculated before the customer finalizes their payment. The main objective of this method is to create an optimised service fee that will cover all, or at least most, of the typical administrative costs that your business would usually shoulder for that transaction. While the aim with the “Automatic” method is to reduce your direct transaction-related administrative costs as much as possible, it’s important to note that in certain specific cases, this may not always result in a zero net cost for every single transaction. The entire calculation and application process is handled automatically to provide you with a convenient way to manage these costs.

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”Set Your Own Fee” Method Explained

This method gives you full control. You define the specific service fee amounts or percentages that will be applied based on your own settings. These fees are calculated and shown to your customer before they complete their payment. You can set up distinct fee configurations for various aspects of your transactions, such as:

• Features: Like payments made via Links, In-Person, or Invoices.
• Currency Handling: For transactions processed in currencies different from your account’s base currency.
• Alternative Payment Options: For distinct payment services you offer, like Buy Now Pay Later (e.g., Tabby, Tamara), which may have different administrative considerations for your business.

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How is the fee calculated in the “Set Your Own Fee” method?

In the ‘Set Your Own Fee’ method, you directly control the service fee calculation. You establish specific fee configurations for various transaction aspects, choosing either a percentage (e.g., 2.5%) or a fixed monetary amount (e.g., AED 5) for each. When a transaction occurs, its details are checked against your fee configurations. If a match is found, the fee you defined is calculated based on the relevant transaction subtotal (after any discounts). This calculated service fee is then added to that subtotal, and the grand total is always clearly displayed to your customer before they proceed to pay, ensuring full transparency. For instance, if you’ve set a 2.5% service fee that applies to a transaction, and the relevant subtotal of items is AED 100.00, an AED 2.50 service fee would be calculated, making the grand total AED 102.50 shown to the customer before payment. Similarly, if you set a fixed AED 5.00 fee applicable to the transaction, and the subtotal is AED 100.00, the grand total displayed to the customer before payment would be AED 105.00. Should a particular transaction meet the criteria for multiple fee settings you’ve created, a fee will be applied based on a specific order of priority; for example, the most specific fee setting (eg. Tabby, Tamara, or other currencies) might take precedence over a more general one (eg. Link, In-Person, or Invoice).

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Important Calculation Details

It’s important to understand what the Service Fee is calculated on. Based on Subtotal After Discounts The Service Fee is calculated based on the final subtotal of all your items or services, after any applicable discounts have been applied to that subtotal. For example, if your customer’s items add up to an initial subtotal of AED 200, and an overall 10% discount is applied, the discounted subtotal becomes AED 180. A 2% Service Fee would be calculated on that AED 180 discounted subtotal. Does Not Apply to Taxes or Tips The Service Fee is not applied to any taxes or tips that are subsequently added to determine the final total amount. These are always handled separately and added on top of the subtotal and service fee.

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Important Considerations

Legal and Regulatory Compliance Some regions have rules governing surcharge practices, so it’s important to confirm that adding a Service Fee is permitted in your jurisdiction. Always ensure that your approach to surcharging aligns with local and network regulations to avoid potential compliance issues. Customer Experience While passing on fees can help protect your bottom line, transparent communication with your customers is essential. Make sure they understand why the Service Fee is being added so you can prevent any confusion or dissatisfaction that could arise from unexpected charges. Pricing Strategy Deciding how much to charge as a Service Fee can be a balancing act between covering your costs and staying competitive. Experiment with different fee structures—from small flat fees to modest percentages—to find the optimal approach for both your business and your customers.