A. Convenience fees and surcharge fees are often used interchangeably, but they’re not the same thing.

A surcharge is a fee charged to customers only because they’re using a credit card. The surcharge fee can be a fixed amount or a percentage of the transaction. Surcharge fees cannot exceed 3% for Visa or 4% for Mastercard, or the merchant’s actual processing cost, whichever is lower. Adding a surcharge fee to a sale is prohibited in California, Connecticut, Maine, Massachusetts, and the U.S. territory of Puerto Rico as of 2025s. A merchant cannot add a surcharge fee to prepaid, gift card, debit, or other stored value cards.

Convenience fees are a fixed amount regardless of the size of the sale or transaction. Convenience fees are only allowed on Card Not Present transactions (i.e., phone payments and online payments).

To discover whether a surcharge or convenience fee is right for your situation, talk to one of our experts today.

A. Surcharging can be complicated. Keeping up with the latest changes can be time-consuming and remaining compliant difficult even for tech-savvy organizations. Organizations need a credit card processing company that has experience in fee-based payment options. IntelliPay’s intelligent platform eliminates the complexity and ensures ongoing compliance. To learn more or get your questions answered, talk to one of our experts.

A. Under no circumstances is a merchant to surcharge a debit card. Many merchants believe that debit card transactions authorized by a signature are credit card transactions. Debit cards can be authorized by a PIN or by a signature and are still debit card transactions, and you cannot add a surcharge fee to any debit transaction.

To learn more about surcharging, talk to one of our expert consultants.

A. No. Merchants must add the same surcharge fee to all credit card transactions. The surcharge fee applies to any card type, whether the card is a consumer card, rewards card, business card, corporate card, or purchase card. Merchants cannot add surcharge fees to pre-paid cards and debit cards.

If you have other questions about surcharge fees or surcharging in general, talk to one of our knowledgeable consultants.

A.  In other words, Merchants can’t profit from surcharges; merchants can only recoup their costs of processing.

If you have other questions about surcharge fees or surcharging in general, talk to one of our knowledgeable consultants.

A. No, you cannot apply different surcharge rates based on card type. Card network rules require consistent surcharging:

The Rule: If you surcharge credit cards, you must apply the same percentage surcharge to ALL credit cards, including:

• Consumer credit cards
• Rewards credit cards
• Business credit cards
• Corporate credit cards
• Purchase cards
• Premium cards (Platinum, Black, etc.)

You Cannot:

• Charge higher surcharges on business or corporate cards
• Surcharge only certain credit card brands
• Apply different rates based on card issuer

You Can:

• Choose to surcharge at the brand level (all Visa cards at X%, all Mastercard cards at Y%)
• Choose to surcharge at the product level (all credit products at same %)
• Not surcharge at all (merchant absorbs costs)

Exception: Remember, you can NEVER surcharge debit cards, prepaid cards, or gift cards – even if they’re processed as credit.

For questions about proper surcharge implementation, contact our compliance team.

A. As of 2025, surcharging is prohibited in Connecticut, Maine, Massachusetts, and Puerto Rico. Additionally:

• California effectively prohibits traditional surcharging under its ‘Honest Pricing Law’ (SB 478, effective July 1, 2024), which requires all mandatory fees to be included in advertised prices rather than added at checkout
• Colorado caps surcharges at 2%
• Kansas (as of January 1, 2025): Surcharging became legal with proper notice requirements after the previous ban was overturned
• Illinois caps surcharges at 4% or actual processing cost, whichever is lower
• Minnesota (as of January 1, 2025): Surcharges are legal if customers can reasonably avoid the fee, and mandatory fees must be included in advertised prices unless avoidable.
• Nevada, New Jersey, New York, and South Dakota require that surcharges not exceed the merchant’s actual cost of acceptance

Card network rules also apply: Visa caps surcharges at 3% (or actual cost, whichever is lower), while Mastercard caps at 4%

For current compliance guidance specific to your state, contact our experts.

A: Here are the general requirements

• The surcharge fee must be the same for all credit card transactions of that brand, regardless of the issuer.
• The surcharge fee can be no greater than the merchant’s average discount rate for that brand’s credit card transactions.
• The surcharge fee cannot exceed 3% (Visa)

• A: Here are the general requirements:
  • The surcharge fee must be the same for all transactions of that particular credit card, regardless of who issued the card.
  • The surcharge fee can not be greater than the merchant’s average discount rate for credit card transactions minus the debit interchange rate.
  • The surcharge fee charged can not exceed 3% (Visa).

A. Proper disclosure is critical for compliance. You must notify customers about surcharges at multiple points:

For Physical Locations:

1. At Entrance: Sign clearly stating “Credit card purchases subject to 3% surcharge” or similar language
2. At Point of Sale: Notice at register or payment terminal
3. On Receipt: Surcharge itemized as separate line item showing dollar amount
4. Verbal Notice: Staff should inform customers when appropriate

For Online Businesses:

1. On Homepage or Checkout Page: Clear notice before payment information is entered
2. During Checkout: Surcharge amount shown before final purchase
3. On Digital Receipt: Itemized surcharge amount
4. Terms and Conditions: Include surcharge policy

Important Requirements:

• Disclose as a percentage AND dollar amount
• Use clear language (avoid terms like “service fee” or “processing fee”)
• Make notices conspicuous and easy to read
• Update notices if surcharge percentage changes

What NOT to Do:

• ❌ Hide surcharge in fine print
• ❌ Surprise customers at final checkout
• ❌ Use vague or misleading terms
• ❌ Apply different surcharges without clear disclosure

A. Yes, you must provide advance notice to your payment processor and card networks:

30-Day Advance Notice Required: Before implementing surcharges, you must notify:

Your Payment Processor/Acquirer: They will forward notice to card networks

What to Include in Notice:

• Business name and merchant ID
• Date surcharging will begin
• Whether surcharging at brand level or product level
• Surcharge percentage or range
• Location(s) where surcharging will apply

Registration Process: Your payment processor should have a formal surcharge registration process. IntelliPay handles all notification and registration requirements for our clients automatically.

State-Specific Requirements: Some states have additional notification or registration requirements:

• California: Must comply with “Honest Pricing Law” disclosure requirements
• Kansas: Must post clear notice at point of sale and online

Important: Starting a surcharge program without proper notification can result in:

• Card network fines ($5,000 – $25,000 or more)
• Immediate program termination
• Merchant account penalties

IntelliPay manages all compliance and notification requirements, ensuring you’re properly registered before launching your surcharge program. Get started with compliant surcharging.

A. Non-compliance with surcharging rules can result in serious penalties:

Potential Consequences:

Card Network Penalties:

• Fines ranging from $5,000 to $1,000,000 depending on severity
• Immediate termination of surcharge program
• Enhanced monitoring and audits
• Increased processing fees

State-Level Penalties:

• Civil penalties for violating state consumer protection laws
• Fines from state attorney general
• Lawsuits from customers
• Cease and desist orders

Business Impact:

• Loss of merchant account
• Difficulty obtaining new merchant account
• Damage to business reputation
• Customer complaints and chargebacks
• Revenue loss from suspended processing

Common Violations:

• Surcharging debit cards
• Exceeding maximum surcharge caps
• Failing to provide proper disclosure
• Surcharging in prohibited states
• Not registering with card networks
• Profiting from surcharges (exceeding actual costs)

Protection: Working with an experienced payment processor like IntelliPay ensures:

• Automated compliance monitoring
• Proper registration and notifications
• Compliant signage and disclosure
• Regular updates when rules change
• Protection from inadvertent violations

Don’t risk your business with DIY surcharging. Let IntelliPay’s experts handle compliance while you focus on running your business.

A. Calculate your effective rate, notify your bank and card brands at least 30 days before you start surcharging, update equipment, etc.. IntelliPay’s experts and intelligent platform take the hassle out surcharging by handling the myriad of requirements behind the scenes. We also ensure you are always in compliance with the latest rule changes and regulations. Talk to us to learn how to get started with surcharging today.

A. Yes. Merchants will be required to place signs at the point of entry and point of service. IntelliPay will provide 1 point of entry and 1 point of service sign at no cost.  We will also provide the verbiage for your e-commerce site.

A.  For all retail POS transactions, the merchant must disclose the surcharge fee at the point of sale, meaning before the customer is charged. The charge must also appear on the receipt.

A.   Merchants must disclose that there will be surcharge fee and the amount of the fee  on their website before checkout.  The surcharge fee must appear as a separate item on the receipt.

A.   Merchants have to disclose their surcharge fee over the phone before the customer is charged. The surcharge fee must show up as a separate item on the receipt that is either emailed or mailed to the customer.

A. Both Visa and Mastercard have specific rules that merchants must follow when implementing surcharges:

A. While both methods help offset credit card processing costs, they work differently:

Surcharging:

• Posts one price
• Adds a fee when customer pays with credit card
• Shows as separate line item on receipt
• Prohibited in some states
• Subject to card network caps (3-4%)

Dual Pricing:

• Posts two prices: cash price and card price
• Customer sees both options upfront
• No separate fee added at checkout
• Legal in all 50 states
• Generally more transparent for customers

Example:

• Surcharging: Item listed at $100, credit card payment shows $103 ($100 + $3 surcharge)
• Dual Pricing: Item shows “Cash: $100 | Card: $103” – customer chooses payment method

IntelliPay offers both compliant surcharging and dual pricing programs. Talk to our team to determine which is right for your business.

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A. Savings vary by business type, transaction volume, and average ticket size, but most merchants significantly reduce or eliminate credit card processing costs.

Example Calculation:

• Monthly credit card sales: $100,000
• Average processing cost: 2.9% + $0.30 per transaction
• Average transaction: $50 (2,000 transactions/month)
• Without surcharging: Monthly cost = $2,900 + $600 = $3,500
• With surcharging: Monthly cost = $0 (costs passed to customers)
• Annual savings: $42,000

Small Business Example:

• Restaurant processing $50,000/month in credit cards
• Processing cost: 2.5%
• Monthly savings with surcharging: $1,250
• Annual savings: $15,000

Keep in mind that some customers may choose cash or debit to avoid the surcharge, which can actually increase your savings since these payment methods cost less to process.

Request a custom savings analysis based on your specific business.

A. This is a common concern, but research shows most customers accept surcharges when properly implemented:

Consumer Response Data:

• 85% of customers who encounter surcharges agree to pay them
• 71% of customers who avoid surcharges switch to cash (not to competitors)
• Younger consumers (Gen Z and Millennials) readily adapt to surcharging

Keys to Customer Acceptance:

1. Clear Communication: Display pricing clearly before checkout
2. Offer Alternatives: Always provide cash or debit options
3. Stay Competitive: If competitors surcharge, customers expect it
4. Proper Signage: Professional, clear notices reduce confusion

Industry Adoption: Surcharging is increasingly common in:

• Gas stations
• Government offices
• Utility companies
• Medical practices
• Legal services
• Restaurants and hospitality

When customers see surcharging as an industry standard, resistance decreases significantly.

Learn best practices for implementation to minimize customer friction.

A. Yes! IntelliPay offers Dual Pricing as a customer-friendly alternative that’s legal in all 50 states:

How Dual Pricing Works: Instead of adding a surcharge at checkout, you display two prices upfront:

• Cash/Debit Price: Lower price
• Credit Card Price: Higher price that covers processing costs

Example:

• Widget normally $100 with 3% processing cost
• Dual Pricing Display: “Cash: $100 | Card: $103”
• Customer chooses payment method knowing the price in advance
• No surprise fees at checkout

Advantages of Dual Pricing:

• ✅ Legal in all 50 states (including CT, ME, MA)
• ✅ More transparent for customers
• ✅ No surprise fees at checkout
• ✅ Simpler compliance requirements
• ✅ Customers appreciate upfront pricing
• ✅ No card network registration required
• ✅ Viewed more favorably by consumers

Who Should Consider Dual Pricing:

• Businesses in surcharge-prohibited states
• Companies wanting better customer experience
• Multi-state operations (avoids varying rules)
• Businesses with repeat customers
• Industries sensitive to customer perception

Dual Pricing Best Practices:

• Clear signage showing both prices
• Consistent application across all products
• Professional price displays
• Staff training on explaining the program
• Point-of-sale systems that display both prices

IntelliPay’s Dual Pricing Solution:

• Compliant signage and price tags
• POS integration
• Automatic price calculation
• Customer education materials
• Full implementation support

Compare Your Options:

Talk to IntelliPay about which option works best for your business.