A. These are legally distinct payment models/fee types with different rules:

Surcharge:

• Fee for using credit card
• Can be percentage or flat amount
• Max 3% (Visa); verify Mastercard cap with processor
• Cannot exceed actual processing costs
• Banned in CA, CT, ME, MA, NY
• Never allowed on debit cards

Convenience Fee:

• Typically a flat fee for specific payment channels
• Often used for card-not-present transactions (online, phone)
• Different regulatory treatment than surcharges

Note: Rules governing convenience fees are complex and vary by card network and merchant category.

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. Surcharges are never permitted on debit cards, even if cards are “run as credit” and even in states where credit surcharges are legal.

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. Surcharges must be applied uniformly:

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

A. Surcharges are capped by both card network rules and actual costs:

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

A.  No. Surcharges must be applied uniformly to all credit card types:

Must be consistent:

• Same rate for consumer, rewards, business, corporate, premium cards
• Cannot differentiate by card type or issuer

Brand-level rules: Consult your payment processor – rules about applying different rates to different card brands (Visa vs. Mastercard) are complex and require verification.

Never surcharge:

• Debit cards (even when processed as credit)

Consult IntelliPay about brand-specific surcharge rules before implementation.

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 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. Yes. You must notify your payment processor/acquirer at least 30 days in advance:

Registration process:

• Provide 30-day advance notice to your payment processor/acquirer
• They handle notification to card networks (Visa, Mastercard, etc.)
• Include: business details, surcharge rate, start date, locations

State requirements:

• Some states have additional posting/disclosure requirements
• California: “Honest Pricing Law” compliance
• Check your specific state rules

Non-compliance penalties:

• Card network fines ($1,000-$25,000+ per occurrence)
• Program termination
• Merchant account suspension

A. Non-compliance carries significant penalties:

Card network penalties:

• Fines: $1,000-$25,000 per occurrence (can reach $1 million for major violations)
• Program termination
• Merchant account suspension
• Enhanced compliance monitoring

State-level penalties:

• Consumer protection violation fines
• Cease and desist orders
• Potential customer lawsuits

Business impact:

• Loss of card processing ability
• Reputation damage
• Customer complaints and chargebacks

Common violations:

• Surcharging debit/prepaid cards
• Exceeding 3% cap (or state caps)
• Operating in banned states
• Improper disclosure/signage
• No advance registration
• Exceeding actual processing costs

Prevention: Work with your payment processor to ensure proper setup, registration, signage, and ongoing compliance monitoring.

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

A. Pre-launch checklist:

1. Verify legality: Confirm surcharging is permitted in your state(s)

2. Calculate costs: Determine your actual processing rates by card brand

3. Register (30 days advance): Notify your payment processor/acquirer; they notify card networks

4. Update equipment: Configure POS to display surcharges and generate compliant receipts

5. Create signage: Post clear disclosure at entrance and point of sale

6. Train staff: Ensure employees can explain program to customers

7. Update online presence: Add disclosures to website/e-commerce checkout

Timeline: Allow minimum 6-8 weeks for full implementation including 30-day registration period.

Talk to us to learn how to get started with surcharging today.

A. Yes. Customer disclosure is mandatory:

A.  Multiple disclosure points are required:

A.  Online surcharging requires clear, early disclosure:

Disclosure requirements:

• Display surcharge notice throughout checkout process
• Show amount before customer selects payment method
• Must be clear and conspicuous (not buried in fine print)

Receipt:

• Surcharge as separate, clearly labeled line item

Technical requirements:

• System must identify debit vs. credit cards
• Must block surcharging on debit transactions

State variations: California, Virginia, and other states have specific e-commerce disclosure requirements.

Best practice: Disclose surcharges early in shopping experience, not just at final payment screen.

A. Phone orders require verbal disclosure:

A. Major card networks have specific requirements:

A. Different approaches to offsetting card processing costs:

Surcharging:

• Post cash price
• Add fee when customer pays with card
• Separate line item on receipt
• Prohibited in 5 states
• 3% cap (Visa)

Dual Pricing:

• Post card price (the higher price)
• Apply discount when customer pays cash
• Legal in all 50 states (with varying compliance requirements)
• No specific percentage cap

Example:

• Surcharging: $100 listed → $103 charged for card ($100 + $3 fee)
• Dual Pricing: “$100 cash | $103 card” listed → customer pays based on choice

Critical distinction: Customer paying MORE than posted price = surcharge. Customer paying LESS than posted price = dual pricing/cash discount.

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

.

A. Customer impact is a real concern and common concern:

Here’s Why:

• 81% of customers who encounter surcharges actively seek alternative payment methods to avoid them
• Customer dissatisfaction is a documented risk
• Response varies by industry, location, and customer demographics

Factors affecting acceptance:

• Clear communication and signage
• Whether competitors also surcharge
• Alternative payment options available
• Industry norms in your market

Reality check: Surcharging shifts costs to customers. While some accept it, many actively avoid it. The financial benefit depends on whether customers:

• Pay the surcharge
• Switch to cash
• Reduce purchases
• Shop with competitors

Before implementing: Consider your specific customer base, competitive landscape, and tolerance for potential negative feedback.

A. Yes, Dual Pricing. Dual pricing/cash discounting works differently:

How it works:

• Display card price (higher) as regular price
• Offer discount for cash/ACH payment
• Example: “$100 cash | $103 card”

Key differences from surcharging:

• Legal in all 50 states (vs. banned in 5)
• No fee added at checkout (discount given instead)
• Generally better customer reception than surcharges

Important considerations:

• Still raises effective prices for card users by 3-4%
• California and Virginia have complex compliance requirements
• Customer dissatisfaction remains a documented risk
• Multi-state operations still face varying state rules

Reality: Dual pricing addresses some surcharging limitations but isn’t problem-free. Both programs shift costs to customers through higher prices.

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