What is Surcharging?
Merchant processing surcharging is the practice of adding a fee, typically 1.5% to 3%, to credit card transactions to offset processing costs. This fee is generally capped at 3% and prohibited on debit or prepaid cards. It requires strict compliance with card brand rules, including 30-day notice to acquirers, visible customer disclosure, and state law compliance.
- Cap: Surcharges are generally limited to 3%, or the actual cost of acceptance
- Prohibitions: Surcharging must not be applied to debit or prepaid cards, even if run as credit
- Disclosure: Merchants must inform customers at the point of entry and at the point of sale (signage) and list the fee on the receipt
- List ItemNotification: Businesses must notify their merchant service provider and card brands (e.g., Visa) at least 30 days before starting
- Legal Restrictions: While allowed in most of the U.S. due to legal settlements, some states (e.g., Connecticut, Massachusetts) still prohibit or restrict surcharging
Providing Our Merchants The Competitive Edge
