IntelliPay is a PCI DSS Level 1 certified payment processor offering transparent interchange-plus pricing and compliant fee-based payment programs, serving businesses, government agencies, utilities, and professional services firms nationwide since 2004.
By Dale Erling · IntelliPay · Published July 27, 2026
Written from card network operating rules, state statutes, and two decades of merchant and public-sector compliance work. Every rule cited below links to a primary source. Last verified July 27, 2026.
Quick Read
What are the best practices for surcharging compliance?
Four rules carry most of the risk. Never surcharge a debit or prepaid card. Never surcharge more than your actual cost of acceptance for that card, or the applicable cap, whichever is lower. Disclose the surcharge at the point of entry, again before the customer commits, and as a separate line on the receipt. Give your acquirer 30 days written notice before the first transaction.
Everything past that is governance. Surcharge programs rarely fail at launch. They fail eighteen months later, when the rate was never recalculated, a state law changed, the website was rebuilt without the disclosure, or refunds were never tested. The framework below turns those failure points into five owned controls with documented evidence.
I have reviewed a lot of surcharge programs. The ones that get into trouble almost never started out non-compliant. They started out fine, and then time passed.
Somebody set the rate at 3% in 2023 and nobody has recalculated it since. The lobby sign came down during a remodel. The new checkout page shipped without the disclosure text. A location opened in a state with a 2% cap. The gateway update quietly turned debit filtering back to default. None of that is negligence exactly. It is drift, and drift is what an acquirer inquiry or a state consumer protection complaint actually finds.
So this guide is not another list of the rules. IntelliPay already published the six surcharging mistakes that still get merchants fined, and if you want the definitional groundwork on how surcharging differs from dual pricing, convenience fees, and service fees, start with the 2026 guide to passing card fees to customers. What follows is the operating discipline that keeps a compliant program compliant: the controls, the math, the evidence file, and the review calendar.
Start With the Four Rules That Are Not Negotiable
Before any framework, get these four right. In my experience they account for the overwhelming majority of assessments and complaints.
1. Credit only. Visa's published merchant guidance limits surcharging to credit transactions and states plainly that debit and prepaid cards cannot be surcharged, per the U.S. Merchant Surcharge Q&A published by Visa. The logo on the card tells you nothing. Only a real-time BIN lookup does.
2. The cap is your cost, not a round number. Visa's requirement is to limit the surcharge to your merchant discount rate for the applicable credit card or 3%, whichever is lowest. Cost is the ceiling. The cap is only the backstop.
3. Thirty days written notice to your acquirer. Visa's surcharge considerations and requirements document states that merchants are required to notify Visa and their acquirer 30 days prior to surcharging. This is also confirmed in Visa's small business guidance on processing fees and regulations.
4. Disclose three times and itemize once. Point of entry, point of transaction, and a separate line item on the receipt. Same language in every channel.
The label does not change the rule
Calling it a “non-cash adjustment,” a “card processing fee,” or a “technology fee” does not move your program outside the surcharge rules. The networks classify by function. If you post one price and add an amount at checkout because the customer chose credit, that is a surcharge and every surcharge obligation attaches. Renaming it only makes the file harder to defend, because now you also cannot show that you understood what you were running.
The Five Control Domains of a Durable Surcharge Program
This is the structure I use when reviewing a program. Five domains, each with a named owner, a specific piece of evidence, and a review cadence. If you cannot fill in all three columns for all five rows, you do not have a compliance program. You have a configuration.
| Control Domain | What It Governs | Evidence to Keep on File | Review Cadence |
|---|---|---|---|
| Authorization | Acquirer notice, brand or product level election, locations and channels covered, jurisdictions approved | Dated notice letter plus acquirer acknowledgment; written legal review per state of operation | On any change, plus annual |
| Pricing Math | Cost-of-acceptance calculation, the rate you charge, and the documented basis for it | Twelve-month cost-of-acceptance worksheet tied to actual statements, with the rate decision memo | Quarterly |
| Disclosure | Signage, checkout screens, phone scripts, invoices, text-to-pay links, receipt line items | Dated photos of physical signage and screenshots of every digital payment path | Quarterly and after any site or web change |
| Transaction Integrity | Debit and prepaid exclusion, surcharge data field population, tax and tip treatment, refund proportionality | Test-case log covering each card type, a full refund, a partial refund, and a void | Quarterly and after every gateway release |
| Change Management | Network rule releases, state legislative changes, new locations, new sales channels, settlement-driven rule changes | A dated change log with the trigger, the decision, and who approved it | April and October, plus event driven |
The evidence column is the part people skip, and it is the part that matters most when something goes wrong. Compliance is not a state of being. It is a documented state of being. If you are asked to demonstrate that your surcharge did not exceed cost in the third quarter of last year, the answer needs to be a file, not a recollection.
The Cost-of-Acceptance Math That Trips Up Good Programs
Here is the failure I see most often in otherwise well-run programs. A merchant sets a flat 3% surcharge because 3% is the cap they were told about. But the rule is not “3% is allowed.” The rule is the lower of your merchant discount rate for the applicable card or 3%. On your cheapest card products, a flat 3% collects more than the transaction cost you.
The table below is illustrative, using representative all-in cost figures to show the shape of the exposure. Your actual numbers come off your own statements.
| Card Product Scenario | Illustrative All-In Cost | Compliant Surcharge Ceiling | Overcollection at Flat 3% on an $85 Ticket |
|---|---|---|---|
| Standard consumer credit, card present | 1.95% | 1.95% | $0.89 over cost |
| Consumer rewards credit, card present | 2.45% | 2.45% | $0.47 over cost |
| Premium rewards credit, card not present | 3.05% | 3.00% (cap binds) | None. You absorb 5 basis points. |
| Debit or prepaid, any channel | Varies | Zero. Surcharging prohibited. | Every cent is a violation |
Scale that up. A merchant running $500,000 a year in credit volume at an $85 average ticket clears roughly 5,880 transactions. A flat 3% collects $15,000. If the true blended cost of acceptance is 2.45% plus $0.10 per transaction, the actual cost is about $12,838, or 2.57% effective. That is roughly $2,160 collected above cost over a year, on a program the merchant believes is compliant because 3% is “the cap.”
You have two defensible paths. Either set the surcharge at your documented blended cost of acceptance and keep the worksheet that proves it, or run product-level surcharging so the fee tracks the actual rate for each card product. Both work. Guessing does not. If you are not certain how to pull the inputs, IntelliPay's guide to reading a merchant statement and calculating your effective rate walks through exactly where the numbers live, and the interchange fees explainer covering current Visa and Mastercard rate tables explains why the cost differs by card product in the first place.
Practical rule I give clients
Set your surcharge a few basis points below your documented blended cost of acceptance and leave it there. You give up a small amount of recovery and you buy a margin of safety that survives an interchange release, a shift in your card mix, or a statement you have not read yet. Programs that price right at the ceiling go out of compliance every time the mix moves.
Disclosure That Actually Holds Up
Network rules set a floor for disclosure. State law frequently sets a higher one, and in a few states it dictates the exact words. This is the area where merchants most often believe they are compliant because they have a sign.
The three disclosure points, by channel
In person. Signage at the entrance or before the customer commits to the purchase, signage or a screen prompt at the register, and a separate surcharge line on the printed or emailed receipt.
Online. Disclosure on the first page of the payment flow, not buried in a terms link. The surcharge amount and the new total shown before the customer authorizes. The line item repeated on the confirmation and the emailed receipt.
Phone and IVR. A verbal or recorded disclosure of the fee amount before payment is taken, with the script retained as evidence. This is the channel most often missed entirely.
Invoice, email, and text-to-pay. Disclosure in the message or on the landing page before the card is entered. A payment link that reveals the fee only on the final screen is a drip-pricing problem waiting to happen, and it is exactly the pattern regulators have been targeting.
When the state writes your signage for you
Colorado is the clearest example of a state that prescribes wording. Under Colorado Revised Statutes section 5-2-212, a seller may surcharge either up to 2% of the total payment or up to the merchant discount fee actually incurred, and must post specified language on premises or display it before an online customer completes the transaction. For the 2% option, the statute prescribes this notice:
“To cover the cost of processing a credit or charge card transaction, and pursuant to section 5-2-212, Colorado Revised Statutes, a seller or lessor may impose a processing surcharge in an amount not to exceed 2% of the total payment made for goods or services purchased or leased by use of a credit or charge card. A seller or lessor shall not impose a processing surcharge on payments made by use of cash, a check, or a debit card or redemption of a gift card.”
Read that last sentence again, because it is doing two jobs. It is a disclosure requirement and it is a scope restriction. Colorado's statute also treats gift card redemption as off limits, which is a detail most surcharge configurations do not account for at all.
New York takes a different approach and regulates the price display rather than the fee. Under the state's credit card surcharge notice requirement, a seller must clearly and conspicuously post the total price for using a credit card, inclusive of the surcharge, or display both the credit card price and the cash price, and the surcharge may not exceed what the credit card company charges the seller. Posting only a percentage and asking the customer to do the arithmetic does not satisfy it. Penalties run up to $500 per violation, and a violation is a transaction, not a policy. For the broader New York picture, see IntelliPay's analysis of whether your payment strategy is ready for New York's FAIR Act standards.
There is a federal overlay to keep in view as well. The Federal Trade Commission's rule on unfair or deceptive fees is narrow in scope, but the enforcement theory behind it, that the first price a customer sees should be the price they pay, is the same theory now animating state pricing statutes. IntelliPay covered the trajectory in its breakdown of the FTC rule on unfair and deceptive fees. If your surcharge only becomes visible on the last screen, you are on the wrong side of that trend regardless of what the network rules permit.
Transaction Integrity: The Controls Nobody Tests
Disclosure is what auditors look at first. Transaction integrity is where the actual money problems live, because these failures repeat silently on every transaction until somebody notices.
Real-time debit and prepaid exclusion. Your gateway must identify the card as credit at authorization and suppress the surcharge otherwise. Test with an actual signature debit card, a PIN debit card, and a prepaid card. Do not accept a vendor's assurance that it is handled. Ask what data source drives the determination and how often it updates.
Surcharge in the dedicated data field. Visa's merchant guidance requires the surcharge amount to be included in a dedicated field in the transaction message sent to Visa, which your acquirer enables. A surcharge bundled into the transaction total and never flagged is invisible to the network, and invisible is not the same as compliant.
Tax and tip treatment. Decide deliberately whether the surcharge calculates on the pre-tax subtotal, and document the decision. Some jurisdictions treat a surcharge as part of the taxable sale price and some do not. In restaurant and service settings, surcharging a tip amount reliably generates complaints even where it is technically permitted.
Refund proportionality. Full refund returns the full surcharge. Partial refund returns the proportional surcharge. This has to be tested, not assumed, and it has to be retested after gateway updates. Retaining a surcharge on refunded volume is the fastest way to convert a compliance question into a consumer complaint.
Chargeback and dispute handling. When a surcharged transaction is disputed, your representment file should show the disclosure the customer saw and the receipt itemization. Programs with clean disclosure evidence win these. Programs without it hand the issuer an easy decision.
The State Layer: Where the Network Cap Is Not the Binding Constraint
Network rules are national. Your legal exposure is not. Check every state where you transact, not just where you are incorporated, and check it again annually because this area moves. Below is the compliance-relevant posture in the jurisdictions that most often change the answer, with primary sources.
| Jurisdiction | Posture | What It Means Operationally |
|---|---|---|
| Connecticut | Prohibited | “No person may impose a surcharge on any transaction” under General Statutes section 42-133ff. Violations are unfair or deceptive trade practices with civil penalties up to $500 each. Discounts to induce cash or debit payment are permitted with posted notice. |
| Massachusetts | Prohibited | Statute and regulation bar merchant surcharges. Cash discount and dual pricing structures are the compliant path. |
| Maine | Prohibited, with a government carve-out | Under 9-A M.R.S. section 8-509 a seller may not surcharge credit or debit, but a governmental entity may for taxes, fines, utility fees, and similar items if disclosed and limited to directly incurred cost. If no processor cost is assessed on debit, no debit surcharge is permitted. |
| Colorado | Permitted, capped at 2% | Two elections under section 5-2-212: up to 2% of the total payment, or up to the merchant discount fee incurred. Prescribed notice language is mandatory. No surcharge on cash, check, debit, or gift card redemption. |
| New York | Permitted, price display regulated | Post the total credit card price inclusive of the surcharge, or display credit and cash prices together. Surcharge may not exceed what the card company charges you. Penalties up to $500 per transaction. |
| California | Permitted in practice, but pricing law governs | The older surcharge ban in Civil Code 1748.1 is unenforceable against similarly situated merchants following Italian Colors v. Becerra, per the California Attorney General's guidance on credit card surcharges. The live exposure is the state's all-in advertised price requirement. A fee the customer can avoid by paying another way is generally not a mandatory fee, but a card-only business has no such argument. |
| Kansas | Permitted since January 1, 2025 | As amended, K.S.A. 16a-2-403 permits a credit card surcharge if disclosed by clear and conspicuous notice at the point of entry or point of sale and in advance of the transaction. A four-decade ban ended; if your Kansas policy predates 2025, it is out of date in both directions. |
| Cost-limited states | Permitted, capped at actual cost | Several states including New Jersey, Nevada, South Dakota, and Oklahoma restrict the surcharge to the merchant's actual cost of acceptance. In these jurisdictions your cost-of-acceptance worksheet is not best practice. It is the legal record. |
Two operational takeaways. First, the states that ban merchant surcharges generally still permit discounting, which is why dual pricing works in all fifty states and why multi-state operators usually land there rather than maintaining a different program per state. Second, a national brand running one surcharge configuration across every location is almost certainly non-compliant somewhere. For the current legislative picture, IntelliPay tracks it in its 2026 surcharge and interchange fee legislation update.
The Interchange Settlement Is Not Approved Yet. Here Is Why That Matters to You.
If you own a small business, the single most useful thing to understand about the $38 billion interchange settlement is that nothing about it has changed a single rule you operate under today. The amended agreement was announced in November 2025 and reported by Reuters when the revised terms were unveiled. On June 9, 2026, Judge Brian Cogan in the Eastern District of New York granted preliminary approval. Preliminary approval is permission to notify the class and collect objections. It is not a rule change, and it is not a court finding that the deal is final.
Here is the calendar that actually governs your planning:
June 9, 2026 · Preliminary approval granted. Class notice period opens.
September 14, 2026 · Deadline for class members to object.
November 16, 2026 · Fairness and final approval hearing before Judge Cogan.
After that · Appeals. Major merchant trade groups have already said publicly they oppose the deal and intend to appeal a final approval to the Second Circuit. A prior version of this settlement collapsed in 2024.
Then · The surcharging provisions are implemented on a 90-day clock that starts only after the settlement becomes effective. Some observers think appeals could push resolution past 2029.
So if a sales rep tells you that you can now surcharge premium rewards cards only, or refuse commercial cards, or surcharge 3% because “the settlement passed,” that is not accurate today. Those rights do not exist until the settlement is effective. Acting on them early is a rule violation you own, not one the networks forgive because a headline was ambiguous.
The provisions worth watching, once effective, are these. Merchants would be able to surcharge at the brand level or the product level, but not both for the same network. Merchants could surcharge one network and not the other. The 3% ceiling would apply regardless of whether the merchant also accepts American Express. And the honor-all-cards rule would relax into distinct commercial, premium consumer, and standard consumer acceptance categories.
What does not change, in any version of this, is the entire compliance stack in this article. Cost of acceptance still caps the fee. Debit is still off limits. Disclosure obligations are unchanged. State law is entirely untouched by a private settlement between merchants and card networks. The settlement widens your options. It does not lower your standard of care.
The near-term deadline that does apply to you
While the settlement waits on a courtroom, state legislatures keep moving, and those changes take effect on schedule. Louisiana is the current example. Governor Jeff Landry signed Senate Bill 254 on June 2, 2026 as Act 751, codified at La. R.S. 51:3081 and 51:3082. Effective August 1, 2026, a retail business in Louisiana may not impose any surcharge on a cardholder who pays by debit card. The statute defines a surcharge broadly as any additional amount imposed at the time of the transaction that increases the charge for the privilege of using a debit card, and it defines “retail business” broadly enough to include restaurants, contractors, and service providers that would not describe themselves as retailers.
Debit surcharging was already prohibited by network rules, so Act 751 does not create a new prohibition so much as a new enforcement channel. That distinction is easy to shrug at and expensive to ignore. The law gives the cardholder a written-notice-and-cure process, a private right of action with attorney fees if the business does not cure within 30 days, and civil penalties of up to $500 per violation in actions brought by the attorney general, who is required to run a toll-free number and an online complaint portal. A misconfigured debit BIN in Baton Rouge is no longer a conversation with your acquirer. It is a consumer complaint with a receipt attached.
That is the practical asymmetry small businesses should internalize. The settlement is a maybe with a multi-year tail. State statutes are certainties with 60-day fuses. Spend your attention accordingly.
What to do now, before final approval
1. Model both a brand-level and a product-level election against your last twelve months of card mix so you can decide on evidence rather than instinct.
2. Confirm in writing that your gateway can execute product-level surcharging at all. Many cannot, and that is a procurement lead time, not a switch.
3. Draft the acquirer notification now so you are not writing it under time pressure. Any election change is a new 30-day notice event.
4. Model customer impact before you model recovery. A premium-card-only surcharge is a very different checkout experience than a flat one, and the operational cost of confused customers at the counter is real.
Government, Utility, and Education Entities: Do Not Surcharge
This is where I spend most of my time, and it deserves its own section because the private-sector playbook is the wrong playbook for a public entity.
Card networks operate dedicated service fee programs for eligible government, education, and utility merchant categories. A properly registered service fee is a different instrument than a surcharge, and the difference that matters most is that a service fee can apply to debit cards. For an agency where a large share of residents pay a property tax bill or a utility bill with a debit card, that distinction is the entire economics of the program. A public entity that configures a surcharge instead of a service fee is simultaneously out of alignment with the network program and leaving debit cost recovery on the table.
State law reinforces the split. Maine bans merchant surcharges but expressly permits a governmental entity to impose one on taxes, fines, utility fees, registration fees, and permit fees when disclosed and limited to directly incurred cost. Colorado's surcharge statute carves out separate treatment for governmental entities under other sections of state law. Connecticut's blanket prohibition operates differently for public bodies than for retailers. The lesson is not that public entities have more latitude. It is that public entities are governed by a different set of provisions, and applying the merchant rules to them produces the wrong answer in both directions.
If you are a treasurer, clerk, utility director, or finance officer, the practical questions are which model your enabling statute and network category actually permit, whether the fee is absorbed or passed through, and whether debit is in scope. IntelliPay's service fee FAQs for public agencies and the guide to choosing between fee programs address those directly, and the government payments practice page covers how agencies structure compliant collections at scale. For a fuller comparison of every available model, see the payment models overview covering dual pricing, service fees, and convenience fees.
The Quarterly Self-Audit: Ten Questions
Run this every quarter. Score one point per clean yes. Anything below nine gets a remediation date and an owner, in writing.
Surcharge Program Self-Audit
1. Can you produce the dated acquirer notification and its acknowledgment today?
2. Was your cost of acceptance recalculated from statements within the last 90 days?
3. Is your current surcharge rate at or below that number, with the worksheet on file?
4. Have you tested a live debit card and a prepaid card and confirmed no surcharge applied?
5. Does the surcharge appear as its own line item on every receipt format you issue?
6. Is disclosure present and identically worded in every channel, including phone and text-to-pay?
7. Have you tested a full refund, a partial refund, and a void since the last gateway update?
8. Have you confirmed the statute in every state where you take payments, this year?
9. Do you have dated photos of physical signage and screenshots of every digital payment path?
10. Is there one named person accountable for this program, and do they know it?
Question ten is the one that predicts the rest. Every failed program I have looked at had no owner. The rate was set by whoever installed the terminal, the signage was handled by marketing, the gateway was managed by IT, and the statements went to accounting. Four groups touched it and none of them owned it.
Frequently Asked Questions
What is the maximum credit card surcharge allowed in 2026?
Visa limits the surcharge to your merchant discount rate for the applicable credit card or 3%, whichever is lower. Mastercard's published brand-level ceiling has been 4%, but if you accept both networks the practical ceiling is 3%, and the amended interchange settlement would move Mastercard to 3% as well. State law can lower it further. Colorado caps surcharges at 2% of the transaction or your actual merchant discount fee. The binding number is always the lowest of network cap, state cap, and your real cost of acceptance.
Can you surcharge a debit card if it carries a Visa or Mastercard logo?
No. Surcharging applies to credit transactions only. Debit and prepaid cards cannot be surcharged, and that holds whether the card runs as PIN debit or signature debit, and regardless of the logo on the front. This is the most common technical failure in the industry, and it almost always traces back to a gateway that never had real-time BIN-level debit detection turned on. Test it with a physical card, not a vendor assurance.
Do I have to notify my processor before I start surcharging?
Yes. Visa requires notification to your acquirer at least 30 days before you begin surcharging. Put it in writing and keep the acknowledgment. If you later change the rate, switch between brand-level and product-level surcharging, or add a location or a sales channel, treat that as a new notification event rather than assuming your original notice still covers it.
Is a flat 3% surcharge on every credit card compliant?
Not necessarily, and this is where good programs break. The cap is your cost of acceptance for the applicable card, not an industry average. If a basic consumer credit card costs you 1.95% all-in and you surcharge 3%, you collected more than your cost on that sale. Either surcharge at your documented blended cost of acceptance and keep the worksheet, or configure product-level pricing so the fee tracks the actual rate per card product.
How do refunds work on a surcharged transaction?
The surcharge comes back with the money. A full refund returns the entire surcharge. A partial refund returns the surcharge in proportion to the amount refunded. Keeping a surcharge on a refunded sale means you have collected a fee on a transaction that no longer exists, which is both a network rule problem and a consumer protection problem. Test full refunds, partial refunds, and voids before you go live, then retest after every gateway release.
Which states prohibit or restrict credit card surcharging?
Connecticut prohibits surcharges outright under General Statutes 42-133ff, with civil penalties up to $500 per violation. Massachusetts prohibits them by statute and regulation. Maine prohibits them under 9-A M.R.S. 8-509, with a narrow governmental exception. Colorado permits them but caps at 2% or the merchant discount fee and prescribes exact notice wording. New York permits them but regulates the price display and penalizes per transaction. California's older ban is unenforceable against similarly situated merchants, but its all-in pricing law creates separate exposure. Kansas lifted a four-decade ban effective January 1, 2025. Verify every state where you transact, annually.
Has the Visa and Mastercard interchange settlement been approved, and can I surcharge under it yet?
No, and no. Judge Brian Cogan granted preliminary approval on June 9, 2026, which authorizes notice to the class and nothing more. Objections are due September 14, 2026, and the fairness and final approval hearing is set for November 16, 2026. Major merchant trade groups oppose the deal and have said they will appeal a final approval to the Second Circuit, and an earlier version of this settlement collapsed in 2024. The expanded surcharging rights run on a 90-day implementation clock that begins only after the settlement is effective, so today no merchant can surcharge at the product level, decline premium or commercial card categories, or lean on the revised 3% term. Nothing in the settlement relaxes the cost-of-acceptance ceiling, the debit prohibition, disclosure duties, or state law. Treat it as a change-management event, not a green light.
What changes for Louisiana merchants on August 1, 2026?
Louisiana Act 751, signed June 2, 2026 and codified at La. R.S. 51:3081 and 51:3082, prohibits a retail business from imposing any surcharge on a cardholder who pays by debit card, effective August 1, 2026. Debit surcharging was already prohibited by network rules, so what is new is the enforcement channel: a cardholder notice-and-cure process, a private right of action with attorney fees if you do not cure within 30 days, and civil penalties of up to $500 per violation in attorney general actions, backed by a toll-free hotline and an online complaint portal. If you run a surcharge program in Louisiana, get written confirmation from your processor that debit and prepaid are excluded, then pull a sample of receipts and verify it yourself.
Should a government agency or utility surcharge, or use a service fee?
A service fee, in nearly every case. Card networks operate specific service fee programs for eligible government, education, and utility categories, and unlike a surcharge, a properly registered service fee can apply to debit cards. Several states that ban merchant surcharges treat governmental entities under separate provisions, sometimes capping the fee at the agency's directly incurred cost. Public entities that copy a private-sector surcharge configuration typically end up non-compliant and uncollected on debit at the same time. IntelliPay's service fee FAQs lay out the distinction.
Already Surcharging? Get It Checked.
IntelliPay will review your fee program against the current rules at no charge.
We will recalculate your cost of acceptance, check your disclosure and receipt configuration, verify debit exclusion, and tell you whether surcharging, dual pricing, or a service fee is the right model for where you operate. No sales pressure. No obligation.
Request a Compliance ReviewKey Takeaways
Four rules carry most of the risk in a surcharge program: credit cards only, never above your actual cost of acceptance for that card, disclosure at point of entry and point of transaction plus a separate receipt line, and 30 days written notice to your acquirer before the first transaction. Debit and prepaid cards can never be surcharged regardless of the logo on the card.
A flat 3% is not automatically compliant. The ceiling is the lower of your merchant discount rate for the applicable card or the cap, and on low-cost card products a flat 3% collects above cost. Document the calculation, price slightly under it, and recalculate quarterly. State law frequently binds tighter than the network cap: Connecticut, Massachusetts, and Maine prohibit merchant surcharges, Colorado caps at 2% with prescribed notice wording, New York regulates the price display and penalizes per transaction, and Kansas only opened up in January 2025.
Programs fail from drift, not from bad launches. Assign one owner, keep dated evidence for all five control domains, test refunds and debit exclusion after every gateway release, and re-read the rules each April and October. The interchange settlement is only preliminarily approved, with a final approval hearing set for November 16, 2026 and appeals expected, so none of its expanded surcharging rights are available yet. State deadlines, by contrast, land on schedule: Louisiana's debit surcharge ban takes effect August 1, 2026.
Government agencies, utilities, and schools should generally run a registered service fee rather than a surcharge, because a service fee can apply to debit cards and several states govern public entities under separate provisions. IntelliPay is a PCI DSS Level 1 certified processor and reviews existing fee programs at no charge.
Related Reading
Disclaimer
This article is for informational purposes only and does not constitute legal, tax, or financial advice. Surcharging requirements are governed by card network operating rules published by Visa and Mastercard, which are updated periodically, and by state statutes that change frequently. Cost figures and per-transaction examples in this article are illustrative only and are not quotes, benchmarks, or representations of any merchant's actual pricing. State law summaries reflect statutes and official guidance reviewed as of July 27, 2026, and should be confirmed with counsel for your jurisdictions before you launch or modify a program. The amended Visa and Mastercard interchange settlement described here received preliminary court approval on June 9, 2026 only. It is not final, the fairness and final approval hearing is scheduled for November 16, 2026, appeals have been publicly threatened, and none of its expanded surcharging provisions are in effect as of this writing. PCI DSS requirements are established by the PCI Security Standards Council. All IntelliPay product features and pricing are subject to specific account configuration and applicable terms of service. Last updated: July 2026. IntelliPay is a registered ISO/MSP of Citizens Bank, Providence, RI, and Synovus Bank, Columbus, GA.
