Digital Transactions Authoritative, insightful and timely information for payments professionals
BlueSnap Inc. late Thursday became the latest processor to enable surcharging through its platform. BlueSnap is introducing an application programming interface that will enable merchants to levy surcharges of up to 3% on a transaction in compliance with card-network rules and state laws.
BlueSnap says the API will enable merchants to offset card-acceptance costs, protect profit margins, and maintain competitive prices, while maintaining full legal compliance. Before allowing a merchant to surcharge on its platform, BlueSnap says it reviews the merchant’s surcharging practices.
“Early users of BlueSnap’s surcharging capabilities already realized hundreds of thousands of dollars in savings,” BlueSnap president Gavin Cicchinelli says in a statement. “By shifting fees to customers who opt to use credit cards, we are providing businesses the flexibility to reduce costs and boost cash flow that can be reinvested for business growth.”
BlueSnap was acquired last year by Payroc WorldAccess LLC for an undisclosed sum.
Compliance is a huge issue for merchants that levy surcharges, as states such as California, Colorado, New York, and Oklahoma have laws requiring full disclosure of the surcharge to consumers prior to the purchase. Other states, such as Connecticut, Maine, and Massachusetts, prohibit the practice. In addition, payments networks have separate rules governing the practice.
“Surcharging is more than just slapping a fee on a credit card transaction, as there are a lot of complications around the practice,” says Nagendra Jayanty, chief executive of InterPayments, a San Francisco-based provider of managed-surcharging technology, for a story in the upcoming January-February issue of Digital Transactions magazine. “Each network has its own rules, as do a variety of states, that have to be adjudicated in seconds.”
In 2025, InterPayments launched a product-level surcharging service for merchants. The service was developed in response to merchants’ needs, the company says.
More processors are expected to add compliant surcharging capabilities, payments experts say.
“As the cost of card acceptance rises for merchants, surcharging is a natural response and we will see more processors support it,” says Cliff Gray, principal at Gray Consulting. “Right now, it is not a given that all [processors] support it, but the practice is popular among merchants, and growing.”
A 2025 study by JD Power revealed 34% of merchants surveyed added surcharges for credit card transactions. The study also found that flat-rate pricing lends merchants greater impetus to add surcharges on credit card transactions. And new and small merchants are more likely to pass along processing costs to their customers through surcharges. JD Power surveyed 3,841 small businesses for the study.
One risk merchants face when surcharging is that it can increase the chance that a customer will walk away. Indeed, a more recent study by JD Power revealed that nearly one-third of small businesses say customers walk away from a potential transaction when faced with the extra charge.
Those findings were echoed in a 2025 study by American Express Co. in which 73% of respondents said that, if asked to pay a credit card surcharge, they would likely make the purchase from a merchant that does not surcharge. AmEx surveyed 1,934 U.S. credit card holders.
