A. Max 3% (Visa) / Max 4% (Mastercard) / Banned in CT, ME, MA, Puerto Rico /
California: permitted with upfront disclosure (SB 478) / Never allowed on debit cards

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:

A. 3% maximum (Visa) / 4% maximum (Mastercard) / Actual processing cost
(whichever is lower) / State caps may be lower (e.g., Colorado: 2% max)

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.

Yes, surcharging creates accounting considerations:

What changes:

• Revenue tracking: Surcharges are typically recorded as revenue, not fee reductions
• Tax implications: Determine if surcharges are subject to sales tax in your jurisdiction
• Separate line items: Surcharges must be tracked separately from product/service revenue
• Reconciliation: More complex matching between POS and accounting systems

What you need:

• POS software that separately tracks surcharge amounts
• Accounting software configuration for surcharge revenue category
• Updated reconciliation procedures
• Tax compliance review

Consult: Your accountant, tax advisor, software providers, and IntelliPay about proper setup before launching surcharging.

A. Customer disclosure is mandatory:

Signage requirements:

• At entry: Post notice customers will see before entering
• At checkout: Display at all points of sale
• Content must include: Surcharge percentage, that it doesn’t apply to debit cards
• Multiple locations: May need signs at each entrance/checkout

Online disclosure:

• Clear notice throughout checkout process
• Before final payment confirmation
• Must meet state-specific e-commerce requirements

State variations: California, New York, and other states have specific language and display requirements.

Verify state-specific signage rules with legal counsel before implementing.

A. Customer disclosure is mandatory:

Signage requirements:

• At entry: Post notice customers will see before entering
• At checkout: Display at all points of sale
• Content must include: Surcharge percentage, that it doesn’t apply to debit cards
• Multiple locations: May need signs at each entrance/checkout

Online disclosure:

• Clear notice throughout checkout process
• Before final payment confirmation
• Must meet state-specific e-commerce requirements

State variations: California, New York, and other states have specific language and display requirements.

Verify state-specific signage rules with legal counsel before implementing.

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:

Before charging:

• Verbally disclose surcharge percentage
• Explain it doesn’t apply to debit cards
• Confirm total amount with customer
• Obtain customer acknowledgment

Receipt:

• Surcharge as separate, clearly labeled line item
• Provided via email, mail, or other agreed method

Verification: Confirm card type to avoid surcharging debit cards

Best practice: Document that surcharge was disclosed during phone conversation for compliance records.

A. Major card networks have specific requirements:

A. Both models help merchants recover credit card processing costs, but they work differently and have different legal requirements.

Surcharging adds a fee on top of the posted price at checkout when a customer pays by credit card. The surcharge appears as a separate line item. It is prohibited in Connecticut, Maine, Massachusetts, and Puerto Rico, and is never permitted on debit or prepaid cards. Visa caps surcharges at 3% and Mastercard at 4%, neither exceeding actual cost of acceptance. Merchants must notify their acquiring bank 30 days before starting.

Dual pricing displays two prices before the customer pays — a standard card price and a lower cash or ACH price. No fee is added at checkout; the customer simply chooses. Because it is structured as a cash discount rather than a card surcharge, dual pricing is legal in all 50 states including states where surcharging is prohibited. No advance network registration is required.

Contact an IntelliPay consultant to determine which model 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.