From the blog Trends in Payments: Surcharging

While many companies are looking to reduce expenses around credit card acceptance, it may be tempting to add a surcharge to credit card payments to offset the processing fees. While surcharging is available there are some things to consider prior to attaching the additional fee. Because more solutions are coming to the market that support surcharging, it also creates some potential disadvantages.

  1. As the cost is being directly shifted to the paying customer (at least in part), some solutions are taking advantage of the surcharging to lift cost even more (regardless of who is paying for it).
  2. Businesses need to consider the impact this has on their customers and the perception it can have on the overall business. Customers may get frustrated that they are being charged additional fees to pay with credit card, especially during this time when there is such an increase of online payments and contactless options.

While surcharging can be a reasonable solution in certain cases, we feel a business should still seek to minimize costs regardless of surcharging or not. Lowering expenses around fees may provide an option to avoid surcharging all together.

If a business is set on charging a surcharge, it will be imperative that the rules are followed. For example:

  • US merchants that intend to surcharge are required to notify their acquirer and V/M/D/Amex at least 30 days in advance of beginning to surcharge.
  • Businesses must limit surcharging to credit cards only (no surcharging debit and prepaid cards).
  • Further, businesses must limit the amount to the merchant discount rate for the applicable credit card surcharged.
  • If a company decides to charge a surcharge, they must disclose the fee as a merchant fee and clearly identify the fee at the point of sale-both in store and must have it stated on every receipt.
  • Merchants should also make sure they are following all state and federal laws associated with these fees.  Currently, 10 U.S. states have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.


If you or your customers would like to better understand surcharging, the rules associated; or, ways to reduce fees to avoid surcharging, we want to help. Contact us today.


Are you ready to grow together?