In Credit Card Processing, Merchant Service, Online Gateway, Professional Services, Small Business Credit Card Processing, Small Business Processing

Can I charge my customers an additional amount for using their credit card?

Business owners want to recoup the processing fees charged by Visa/MasterCard/Discover/American Express, but there are rules that govern this activity referred to as surcharging or adding a convenience fee to a credit card merchant service transaction. So what are these rules?
Federal, State and Card Association rules vary based on your state and how you plan to charge your customers –

  • Federal Laws – OK to charge
  • State Laws – 10 states ban surcharging for all credit cards
    Banned in – CA, CO, CT, FL, KS, ME, MA, NY, OK, TX
    Litigation in process in – IL, HI, NJ, RI
  • Visa Rules Must be disclosed prior to purchase
    Must be a fixed amount, not a percentage
    Because Visa only allows a fixed amount to be charged, for large transactions this can be difficult to manage as you probably won’t be able to cover your small businesses merchant account processing fees with a flat dollar amount.

  • MasterCard/Amex – OK to charge

Best Plan – offer discount for check/ACH to avoid issues if you operate in states where convenience or checkout fees are banned. This is the loophole that gas stations use.
Some businesses charge a fee that’s called something else, but this is a questionable practice in banned states.

Online Reference

Visa’s Form to report a business in violation the laws

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