Online Payment System - Fees

Hi I have just setup the online payment system for customers to pay invoices directly from the invoice.  I have chosen the settings to charge the customer for the surcharge fees if they choose Paypal or Credit Card.

My first customer who has used it to pay via paypal, I have received an email saying they have paid the lesser amount due to the surcharge?? I'm confused???  Why am I paying the merchant fee when I requested prior to this invoice being sent that the customer pays the surcharge??

Please advise what has happened here as I can't afford to offer this service if it can't charge the customer the surcharge??