Watts Surcharge

A fee that is charge when a POS terminal is forced to dial a toll-free number that is different from the default number in the terminal's program.

When a transaction is initiated, the POS terminal must contact the processing bank via a telephone line to transmit and receive the information that is necessary to complete the transaction.

A terminal is programmed to dial the same number every time to reach the processing bank. If that number is busy, or the terminal is unable to establish a connection for any reason, it will dial a backup toll-free number. Every time a terminal must resort to dialing the secondary number, the merchant will be charged a fee, called a Watts Surcharge.