The Smart Surcharging Merchant Processing Solution

Surcharging Payment Processing FAQs

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  Why does surcharging matter for my business?

  Credit card processing fees cut into your profit. Surcharging legally shifts those fees to customers who choose to pay with credit cards. When implemented correctly, it can eliminate most of your processing costs.

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  Is surcharging legal in my state?

  Surcharging is legal in most states except Connecticut, Massachusetts, and Puerto Rico. Colorado and Oklahoma allow it but cap the credit card surcharge at 2%.

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  What are the basic surcharge compliance rules?

  • Credit card surcharges are usually capped at 3% in most states that allow it, although some are capped at 2%
  • Still banned in Connecticut, Massachusetts, and Puerto Rico
  • Debit and prepaid cards cannot be surcharged
  • Signs must be posted at the entrance and checkout
  • Receipts must clearly show the surcharge
  • Refunds must include the surcharge amount
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  What’s the difference between a surcharge and a convenience fee?

  A surcharge applies only to credit cards and is legal in most states if properly disclosed. A convenience fee applies to all card types and can be used when paying through an alternative channel, such as online, instead of in-store. Merchants should be very careful as convenience fees are often scrutinized by card brands.

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  Can I apply surcharges to debit cards?

  No. Federal law prohibits surcharging on debit or prepaid card transactions, even if processed as credit.

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  Can I apply different rates for different card brands?

  No. You must apply the same surcharge rate across all credit card brands. That’s why despite Mastercard still having 4% as their limit, the processors and banks will limit compliant surcharging on POS’s and terminals to 3%.

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  Do I need to notify customers?

  Yes. Compliance requires clear communication before and after processing the payment:

  • Posted signs at the entrance and point of sale
  • A line item on the receipt showing the surcharge
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  Do I refund the surcharge if I refund a purchase?

  Yes. Refunds must include the surcharge amount.

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  What happens if I don’t follow the rules?

  You risk:

  • Fines from card brands
  • Higher chargeback rates
  • Merchant account termination
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  Why should I choose AllayPay for surcharging?

  We make surcharging simple, legal, and profitable by offering transparent pricing with no hidden fees, full compliance support, and fast approvals.  We provide merchants with the proper signage, so you don’t have to worry about ever being uncompliant. Our surcharging program integrates seamlessly with your existing POS or payment gateway and works for high-risk or hard-to-place merchants.

  Ready to eliminate your credit card fees? Contact us now to set up a complaint surcharging solution that saves you thousands of dollars.