The first thing to do is consider if your business should implement a surcharge.

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How much can retailers charge?

Merchants can only charge a fee equal to what they pay to accept the card—typically 1 .5% to 4% of the entire purchase.  No matter what their costs are, the surcharges are capped at 4%.

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How will I know if a retailer will charge me a fee to use my credit card?

Retailers are required to provide “clear disclosure” or signage in the store entrance, at the point of sale, on their website if it is an online purchase and on your receipt.

If my business does want to surcharge for credit card use, how do I do so?

Merchants must follow specific guidelines so that they are not gauging or surprising customers by the fee. Retailers cannot apply the fee to debit and pre-paid card purchases.

Step 1.  The merchant MUST notify Visa/MasterCard/Discover AND their acquirer within a minimum of thirty (30) days in advance via written notice of their intention to surcharge PRIOR to implementing a surcharge.

Step 2.  Merchants will be REQUIRED to disclose their surcharge policy at the point of Entry AND the point of sale prior to the purchase transaction being completed.

Step 3.  A merchant must provide clear disclosure of the amount of the surcharge on the customer’s receipt (via POS receipt printout and/or terminal print out.   Note that you may be required to do a new download (i.e. reprogram) or purchase a NEW terminal to implement this change.


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What about Discover, American Express, PayPal and other Specialty Payments Providers?

Discover changed its rules in March 2013 to allow a merchant to surcharge a transaction provided that the merchant also surcharges card sales conducted using the same type of card.  The amount may not exceed the cost of acceptance.

For merchants that accept American Express, the concept of “level playing field” comes into play.  The best way to explain the concept is through an example.

  • Visa, MC and Discover are not subject to the level playing field since all allow surcharging.  A merchant may surcharge any of the card brands or all of them.
  • Amex has a non-discrimination policy which says that it’s okay to surcharge an Amex card as long as you surcharge ALL of the competing cards.  This is where the level playing field rule comes into play.
  • A merchant would have to compare MasterCard’s cost of acceptance to Amex’s cost of acceptance.  If the rates are the same or if Amex’s cost is higher than MasterCard’s, the merchant is required to surcharge MasterCard as well as Amex.
  • If the Amex rate is less than MasterCard’s rate, the merchant is not required to surcharge Amex although they may do so if they want to.
  • Visa’s surcharge policy requires the same type of analysis in reference to competing brands.  Discover’s surcharge policy does not require the comparison of rates, but does require that the Discover brand be treated equitably.
  • MasterCard Cost Of Acceptance by Merchant Category
  • MasterCard Cost Of Acceptance by Product Type

PayPal – Operating regulations do not allow merchants to assess a surcharge or any other fee for accepting PayPal (or other similar services such as Stripe, Braintree, or similar aggregators) as a payment method.