13 Years on, Surcharging Remains Complex for Acquirers

It’s been 13 years since merchants were allowed to add surcharges to cover much of their credit card processing costs, yet confusion and complexity remain. Speakers at the Transact 2026 conference last week, sponsored by the Electronic Transactions Association, did their part to dispel much of this confusion.

“Surcharging is a term of art in payments, and it really depends on who you are asking,” said Theresa Kananen, a partner at the Arnall Golden Gregory LLP law firm. A card network has one view of surcharging while state regulators typically have another view, she said.

The card networks have detailed rules about surcharging, such as disclosing the fee via signage to consumers and caps on how much can be surcharged. Processing their credit and debit card transactions is a top priority for them. States, however, have multiple interests to oversee, ranging from highways, licensing, to tax collection.

While the card network surcharging rules are fairly uniform, different states may differ on what is allowed. For example, surcharging is banned in Connecticut, Maine, Massachusetts, and Puerto Rico. New York requires dual pricing, Oklahoma caps surcharging at 2%, and New Jersey mirrors Visa’s surcharging rules.

Acquirers, especially those with clients accepting payments from consumers across the nation, face a challenge in knowing which jurisdiction or network rule takes the lead, Kananen says.

Mastercard Inc. and Visa Inc. have similar rules for surcharging, though there are important differences. Visa has a 3% surcharge cap while Mastercard’s limit is 4%, though Mastercard “won’t let you charge more for their card than somebody else’s card, so even though they have a 4% cap, effectively that 3% [Visa] cap is what we look to in the industry,” Kananen says. Neither Discover nor American Express Co. has publicly documented surcharging policies.

Kananen and co-panelist Deana Rich, cofounder and at Infinicept, also took on some myths of surcharging.

“Colorado capping surcharging at 2% is a myth because the legislation says 2% or the actual cost of card acceptance. It does not add, whichever is more, it simply tells you to choose between the two,” Kananen said.

Rich and Kananen also said a cash discounting program is not a way to bypass surcharging-compliance requirements if a fee is added for a credit card payment but a merchant can remove the fee if a customer pays with cash or a debit card. “If you’re adding a fee at any point in time, it’s a surcharging program,” Rich said.