Why is there a processing fee (surcharge) when a customer pays VAT, Corporate Tax or other government fees with a Pemo card?
The fee is applied by the government merchant or payment portal at checkout, not by Pemo. It's a card-acceptance cost the merchant passes on, similar to a service charge any e-commerce platform (think Talabat, Careem etc.) adds to every order. Pemo does not charge this fee and earns none of it. A customer reported a 0.7% fee on FTA VAT and Corporate Tax payments. The exact rate is set by the merchant and shown at checkout before the payment is confirmed.
Does cashback cover the government processing fee?
Cashback covers this fee, however partially, not in full. Government payments count as local government spend. By default customer on Starter and Premium plans earn no cashback on domestic spend. Enterprise accounts might get a custom domestic rate - contact sales if you're curious to upgrade.
Calculation example for demonstrative purposes:
A customer has cashback set up on local government spend at 0.05%. That cashback reduces the cost but doesn't offset the merchant's fee. For example, a 0.7% merchant fee less 0.05% cashback leaves a net cost of 0.65%. The whole fee goes to the merchant, and none of it goes to Pemo.