Skip to main content

Governor Jared Polis signed Senate Bill 21-091 into law, repealing the state’s ban on credit card surcharging. As a result, Colorado now has a surcharging law that not only ensures proper consumer disclosure about surcharges but is in line with the surcharging rules implemented by Visa Inc. and Mastercard Inc.

The new law, signed by Governor Polis on Thursday, July 8th, caps surcharges at either 2% of the transaction amount or the merchant’s actual cost of the transactions, mandates disclosure of the surcharge amount to consumers before the transaction, and prohibits surcharges on debit cards.

The passage of the Colorado law leaves just two states Connecticut and Massachusetts, with surcharging bans in place. However, industry sources familiar with the situation indicated that lawmakers in those two states are closely watching what has happened to surcharge bans in other states, including the recent demise of the Kansas ban.

Online Payments and Rising Interchange Rates

Driven by the pandemic, sales of goods and services moved online at an accelerated pace.  But, while saving their businesses, the costs and fees merchants had to pay for their online (card-not-present) sales were higher than in-person sales, placing further pressure on already strained margins.

“Adding a surcharge to a customers’ credit card transaction provides relief for merchants already struggling from COVID-19 restrictions, reduced sales, and lower profitability,” stated Casey Leloux, CEO of IntelliPay.

One Year Postponement

As the economy recovers and moves into 2022, another interchange rate increase is in the works. Visa and Mastercard had proposed increases to interchange rates to go into effect in April. Still, Congressional pressure to allow merchants time to recover from the pandemic lead to a one-year postponement.  While the postponement of the April 2021 increases in interchange fees for online credit card transactions brought temporary relief to merchant’s margins, those increases will still go into effect next May, only delaying the inevitable.

Leloux added, “Merchants looking for relief for sagging merchants are encouraged to consider adding a surcharge fee to all their credit card transactions.”

Not a DIY Project

VISA, Mastercard, and states have rules and regulations about how a surcharge fee can be added to a customer bill. Surcharging rules and regulations are continually changing. So, if you have multiple locations or do business across state lines, compliance may be cumbersome.

That is why we recommend using a payment processor that has experience in surcharging.

IntelliPay- Surcharge Fee Experts

IntelliPay has offered fee-based payment options to private and public sector merchants for over 16 years.  We understand the requirements, and our technology automatically handles all the details behind the scenes so that merchants are always in compliance.

In addition to fee-based solutions, our turnkey payment suite makes it easy to accept credit and debit cards, ACH/eChecks from any device anywhere.  We also support ecash payments for those who are either un or underbanked.

To learn more, email our sales team at  or visit our website to schedule a free, no-obligation demo.

Source:  Digital Transactions