Surcharge FAQs

What's Surcharging?

Q. What is a surcharge fee?

A. A surcharge fee is an additional fee that a merchant adds to a customer’s transaction when he or she uses a credit card for payment.

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

Q. What is the difference between a surcharge and convenience fee?

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 simply because they’re using a credit card. The surcharge fee is a percentage of the sale or transaction that cannot exceed 4%. Adding a surcharge fee to a sale is limited in seven states currently and to credit cards.  A merchant cannot add a surcharge fee to pre-paid, 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 consultants today.

Q. How can a merchant learn more about whether surcharging is right for their organization?

A.  Surcharging can be complex. Keeping up with the latest changes can be difficult and remaining compliant even for tech-savvy organizations. IntelliPay’s intelligent platform eliminates the complexity and ensures ongoing compliance.  To learn more or get your questions answered, talk to one of our knowledgeable consultants.

Surcharge Transactions

Q. What types of cards can I surcharge?

A. You can add a surcharge to all credit cards regardless of whether it is a consumer card, rewards card, business card, corporate card, or purchase card.

Q. Can I surcharge debit cards?

A. No. Surcharging debit, pre-paid or stored value card transactions are prohibited.

Q. Can a merchant assess a surcharge fee on debit card transactions when the cardholder using a debit card chooses “credit” on the point of sale terminal?

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. This is not true. 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 any debit transaction.

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

Q. Can a merchant pick and choose what card types they add a surcharge too?

A. 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.

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

Surcharge Law and Requirements

Q. Is it legal to add a surcharge to card payments?

A. Yes. A court ruling in 2013 made it possible to surcharge card transactions at the federal level. All major card brands permit surcharging if certain requirements are met. However, there are currently seven states that limit the practice.

Q. Which states limit surcharging?

A. Currently, these seven states; Colorado, Connecticut, Kansas, Maine, Massachusetts, Oklahoma, and Wyoming. Merchants should consult with their legal counsel about the laws regarding adding surcharge fees for their state.

Surcharging Requirments

Q. What are the requirements for adding a surcharge fee?

A. Surcharging can be complex and staying compliant can be challenging for even the most technology savvy organizations.  Intellipay handles the complexity and ensures that your organization is always in compliance.  To learn more, please reach out to one of our consultants.

Q. Is there anything else I need to do before I can start surcharging card transactions?

A. Yes.  IntelliPay’s experts and our intelligent platform handle the myriad of requirements behind the scenes.  We also ensure you are always in compliance with the latest rule changes and regulations.  Talk to a consultant to learn how to get started with surcharging today.

Q. Will a merchant’s current equipment and terminals need to change?

A. Yes. Our support team is ready to help you successfully transition to new equipment.

Q. Will a merchant need to make changes to the accounting process or software for surcharging?

A. Maybe. Merchants will need to talk to their accounting professional and software provider about how to account for surcharge fees.

Q. Does a merchant have to provide their customers notice before they start surcharging?

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.