Category Archives: Merchant Services

Stored Card on File: Tips for Manufacturers and Distributors

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Your customer places a $75,000 order today. Three months later, a different authorized buyer places a $120,000 order using the same card on file. The products, amounts, and people placing the orders are different. It’s not a subscription and it’s not recurring billing, but it’s still a stored card on file transaction. Compliance with card brand rules is different than PCI compliance, which is about accepting and processing a credit card transaction vs security.

That distinction matters. Visa and other card brands have detailed technical requirements for how stored credit cards are saved and used. When merchants don’t send the right transaction information, they risk higher interchange rates, non-compliance assessments, and non-customer initiated chargebacks.

It’s impossible for manufacturers and distributors to manage payment requirements internally. The best payment gateway, whether standalone solution or integrated with ERP or ecommerce, automates compliance. The inability of payment gateways to keep up with changing rules was exploited when merchants were mandated to accept EMV chip cards in October 2015. Virtually none were able to comply day one, some took years, and some went out of business. Merchants using our recommended solution went live the same day acquirers were ready to accept them. This historical perspective is important as the same issues are reoccurring today in the card not present world.

STORED CARD ON FILE: CUSTOMER VS MERCHANT INITIATED PAYMENT

In B2B sales an authorized buyer may log in to a portal, call a sales representative, or approve an invoice payment using the saved card.

Card brands distinguish between customer-initiated transactions and merchant-initiated transactions. A customer-initiated transaction occurs when the customer participates in the purchase. A merchant-initiated transaction is a later charge made without the customer present under a prior agreement. The acquirer needs to receive the correct data. In either case, the initial process for storing the card is critical to compliance for processing all future transactions.

Businesses cannot rely on people to tell the gateway how to code payments. The best B2B payment gateway solution applies the right process automatically based on many factors.

WHY YOUR PAYMENT GATEWAY MAY NO LONGER BE COMPLIANT

Stored-credential rules have changed over time, and card brands continually update their technical requirements. A payment gateway that successfully ran card payments years ago may not send the data now expected for stored-card transactions.

“It’s always worked” or “It’s a public company” is not a compliance test. An approval response only tells you that the transaction was approved at that moment. It does not confirm that the payment was submitted with all of the information required for the particular stored-card use case.

The most common issue is not that a manufacturer or distributor intentionally ignores the rules. It’s that its gateway, ERP connector, or custom integration was designed around an older process and does not automatically manage current requirements across all payment flows.

QUESTIONS TO ASK ABOUT ANY PAYMENT GATEWAY

  • Is the solution compliant with current rules for storing a card, Merchant initiated transactions and customer initiated transactions using a stored card on file?
  • Can it support cards stored on file compliance across order entry, ecommerce, invoice payment, and customer-service workflows?
  • Will compliance handling remain with the gateway if we update our ERP, replace a connector, or change other software?
  • Does the payment gateway system retain the customer stored card authorization records?
  • Can the customer manage their stored cards via a portal?
  • What is the payment gateway past history regarding compliance at the time of new rules going into effect? Merchants are unlikely to get direct answers on this; developer forums are a great place to learn more. For example, the authorize.net developers forum is very active with people asking …”when will it support…”

A SIGN OF NON-COMPLIANCE- $1 AUTHORIZATION

When a card is stored for future payments, the stored card framework requires a merchant send a zero dollar authorization. At that point the card is verified along with whatever the current rules are. Outdated payment gateways use a one dollar authorization, a sure sign either the gateway (or the developer) is not keeping up with continuously changing rules. Shopper alert- if you see a one dollar authorization pending on your credit card, we’d love your referral.

TIP: Is your payment gateway compliance with Zero Dollar Authorization? Search your merchant statements for “Zero Dollar Verification” Fees. Your merchant account portal may let you search for this also. Due to potential abbreviation, try “zero” if you get no results.

WHAT AN AUTOMATED B2B PAYMENT GATEWAY SOLUTION SHOULD DO

The ideal payment gateway makes it easy to store and use cards while managing the complexity in the background. It should tokenize the card, connect the payment to the appropriate order or invoice workflow, and automatically handle transaction classification and the related card-brand data.

That approach matters even more when payments touch multiple systems. ERP software, ecommerce tools, customer portals, and order-entry applications change. The payment gateway should remain the compliance layer—not leave the merchant dependent on every connector or custom software update to keep up with card-brand rules.

WORK WITH A B2B PAYMENT GATEWAY EXPERT

Stored cards on file reduces DSO. The goal is not to turn the credit department into payment-compliance specialists. The goal is to choose a solution that makes payments easy for the customer and automatically manages the technical requirements.

3D Merchant Services specializes in B2B payment gateway solutions for manufacturers, distributors, and dealers, including standalone and ERP-integrated payment technology. We help businesses implement solutions that automate payment processes and reduce the complexity of staying current with stored-card requirements.

For additional background:
https://3dmerchant.com/blog/merchant-processing-services/visa-stored-credential-mandate-overview
https://3dmerchant.com/blog/cenpos/what-is-mastercard-data-integrity-reporting

SOURCES

Visa Acceptance Solutions — Supporting Merchant-Initiated Transactions and Credential-on-File for Visa, Mastercard, and Discover
https://support.visaacceptance.com/knowledgebase/knowledgearticle/?code=000003041

Visa Developer — Getting Started with Card on File Data Inquiry
https://developer.visa.com/capabilities/card-on-file-data-inquiry/docs-getting-started

Bookmark our Card Brand Rules https://3dmerchant.com/blog/merchant-bulletins-downloads

Visa Core Rules and Visa Product and Service Rules, April 2026 edition
https://usa.visa.com/dam/VCOM/download/about-visa/visa-rules-public.pdf

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2026 Credit Card Surcharge Laws Update

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What are 2026 surcharge regulations?

Business to business (B2B) credit card surcharge article includes specifics for companies, not government or education, and in particular for B2B and automotive, truck, and related dealers. Merchants must consider Federal and state laws as well as merchant account, Visa, MasterCard and other card networks compliance rules.

Since our Feburary 2025 credit card surcharge update there have been no changes to surcharge, but plenty of other changes that will affect merchants, including Visa VAMP. Most notably, on July 1, 2024, when a new California law called Senate Bill 478 went into effect.

Which states prohibit merchants surcharging?

States with other surcharge regulations

  • Colorado allows credit card surcharging up to 2%. 
  • New York, New Jersey, Nevada, and South Dakota prohibit surcharges from exceeding the cost that the merchant pays to accept the card. (See also Visa merchant surcharge rules.)
  • The legislative intent in many states was to protect consumers, and not to restrict B2B surcharging, therefore, B2B companies may have exceptions. 

Can a B2B company use surcharge to offset fees?

The rules vary across multiple card brands and terms of acceptance. Here’s a 2025 updated review of who can surcharge, what card types, and checklist of how to roll out credit card surcharge at your company. The answers are targeted for business to business merchants, our area of expertise. Historically if a merchant complies with Visa surcharge rules, they’d be compliant with other brands, so we often cite that as the standard. A B2B company that wishes to surcharge in every state should contact an attorney.

What is a credit card surcharge?

Surcharge is any fee charged by a merchant for the use of a card.These disclosure requirements include advance notice to both Mastercard and the merchant’s acquirer of the merchant’s intention to impose a surcharge no less than thirty days before the merchant implements a surcharge.

These disclosure requirements include advance notice to both Mastercard and the merchant’s acquirer of the merchant’s intention to impose a surcharge no less than thirty days before the merchant implements a surcharge.

What’s the difference between a surcharge and convenience fee? Convenience fees can only be charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant’s customary payment channels and not charged solely for the acceptance of a Card. If a merchant only accepts credit cards, it’s prohibited. If a merchant is 100% card absent, merchant cannot charge a convenience fee.

Card brands agree on this for surcharging:

  1. Merchant Discount Rate is the fee, expressed as a percentage of the total transaction amount that a Merchant pays to its Acquirer or Service Provider for transacting on a Credit Card brand. In short, it’s typically all the fees on your merchant statement EXCEPT PCI compliance, terminal rental fees or any other special fee that is not paid via the mechanism of the per-transaction merchant discount fee. Per Visa, merchants must “Limit the amount to your merchant discount rate (MDR) for the applicable credit card or 3% whichever is lowest.” This is the reason merchants can get in trouble if their surcharge solution provider charges a flat amount for every card type.
  2. The Surcharge amount must be submitted separately (in the defined surcharge field) from the Transaction amount in the authorization and clearing message.
  3. The receipt must list the surcharge amount separately.
  4. If the original transaction has a partial or full refund, the surcharge amount must all be refunded proportionally.
  5. Surcharge on debit or prepaid cards is prohibited for all merchants.To ensure compliance use a payment gateway that can identify the card brand and type of card to allow surcharges only on eligible cards.
  6. The fee must be relative to their average cost of card acceptance.
  7. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.

How much can a merchant surcharge?

In short, surcharging is allowed to cover costs, not to make a profit. Let’s face it, based on the rules above, to simplify implementation, merchants will surcharge at the brand level because they lack the technology to discern between product types on a per transaction basis. Taking all that into account what can you surcharge?

  • Cannot exceed Maximum Surcharge Cap, which for Visa is currently 3%, effective April 15, 2023, and MasterCard remains at 4% in 2025.

Just because somebody offers it doesn’t make it right. Some companies are offering “free merchant accounts” by offsetting fees with surcharge of 3.5% or even 4%, both exceeding current rules. The average B2B company has much lower than 3.5% effective rate so that was always a violation of card acceptance rules, subject to penalty. The companies offering these services are making big money on the spread of actual fees vs what customers are paying. Again, these are card brand rules violations.

Non-compliant merchants could face fines ranging from $50,000 to $1 million according to a memo from a. credit card processor to merchants, 12/2023 ahead of expected increase in Visa enforcement in 2024 and beyond.

Surcharge checklist:

  1. Merchants must notify their acquirer 30 days before they begin surcharging; must state whether will surcharge at the brand level or product level.
    1. https://www.visa.com/merchantsurcharging
    https://www.mastercard.us/en-us/business/overview/support/merchant-surcharge-rules.html
    1. Amex- none required
  2. For card not present orders, disclose verbally if telephone; for online orders minimum 10-point Arial font, but in any case no smaller or less prominent than surrounding text.
  3. Receipt must be delivered with the surcharge as a separate line item.
  4. The surcharge amount must be sent with the transaction for authorization.
  5. Retail Point-of-Entry Disclosure example: “We impose a surcharge on credit cards that is not greater than our cost of acceptance. We do not surcharge debit cards. ” Main entrance(s) of the Merchant Outlet, in a minimum 32-point Arial font, but in any case no smaller or less prominent than surrounding text.
  6. Point of transaction sign: Every customer checkout or payment location, in a minimum 16-point Arial font, but in any case no smaller or less prominent than surrounding text.

What’s the penalty for non-compliance with surcharge rules? Fines. Acquirers of any merchant identified as surcharging improperly may be assessed an immediate US $1,000 fine. They pass those down to their clients. Acquirers (the credit card processor or merchant account provider) merchant clients could face fines ranging from $50,000 to $1 million. This is not all inclusive.

  1. Effective January 2025, Kansas allows surcharging.
  2. In 2015, the 11th U.S. Circuit Court of Appeals, a federal court, overturned Florida state law as being unconstitutional, allowing surcharges to legally continue in Florida and nine other states that had enacted bans against them. The case was a highly contentious 2-1 decision in which the court’s chief judge said the state surcharge bans (like Florida’s) were “being struck down by a federal court for no good reason.”
  3. In December 2019, Oklahoma attorney general official opinion declaring the state’s no-surcharging law unconstitutionally restricts free speech. 

Surcharge Laws Stories:

  • NYS new rules in effect on February 11, 2024. https://www.governor.ny.gov/news/governor-hochul-announces-new-law-clarify-disclosure-credit-card-surcharges-goes-effect-sunday
  • Visa Intensifies Enforcement on Merchant Surcharges https://thefinancialtechnologyreport.com/visa-intensifies-enforcement-on-merchant-surcharges/
  • Visa Revises Rules Governing Surcharge Programs https://www.taftlaw.com/news-events/law-bulletins/visa-revises-rules-governing-surcharge-programs-1/
  • 2/2023 NJ Businesses Fined For Credit Card Surcharge Without Proper Notice https://lakewoodalerts.com/cracking-down-businesses-fined-for-credit-card-surcharge-without-proper-notice/
  • California update
    https://oag.ca.gov/consumers/general/credit-card-surcharges
  • 2018 Florida https://www.nbc-2.com/story/40273084/you-can-legally-be-charged-extra-for-using-a-credit-card
  • 2018 case in California http://delfinomadden.com/credit-card-surcharge-ban/
  • http://fortune.com/2017/03/29/credit-card-charges-supreme-court-freedom-speech/

State statutes on surcharge laws

  1. Maine Credit and Debit Card Surcharges https://www.maine.gov/pfr/consumercredit/consumer/surcharge.html
  2. https://oag.ca.gov/hiddenfeeshttps://portal.ct.gov/DCP/Legal/Credit-Card-Surcharge
  3. https://m.flsenate.gov/Statutes/501.0117
  4. https://portal.ct.gov/dcp/legal/credit-card-surcharge?language=en_US
  5. https://sll.texas.gov/faqs/credit-card-surcharge
  6. https://statutes.capitol.texas.gov/Docs/BC/htm/BC.604A.htm#604A.0021
  7. https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140d/Section28a Massachusetts statutes.
  8. Maine https://legislature.maine.gov/statutes/9-A/title9-Asec8-509.html
  9. Minnesota https://www.revisor.mn.gov/statutes/cite/325G.051

For more information, see Surcharge law resources under Merchant Alerts & Rules Links or contact your acquirer for accurate and current information specific to your situation. Neither Christine Speedy nor this web site provide legal advice. Consult an attorney for all your legal questions.

Does your company want to surcharge? Or do you want to reduce fees with payment optimization? Call Christine Speedy right now at 954-942-0483, 9-5 ET for compliant solutions. Please share your surcharge insights for others and ask any questions below. The information herein is based upon public information available at the time written and may change.

3D Merchant Services is rebranding as Greater Good Tech.

Disclaimer: This information is for reference only and is not legal advice. Rules are constantly changing, and you should verify the accuracy of surcharge laws for your business needs and location.

2025 Credit Card Surcharge Laws Update

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What are 2025 surcharge regulations?

Our primary customer base is business to business (B2B) so this credit card surcharge article includes specifics for companies, not government or education, and in particular for

B2B and automotive, truck, and related dealers. Merchants must consider Federal and state laws as well as merchant account, Visa, MasterCard and other card networks compliance rules.

Since our August 2024 update there have been multiple changes. Most notably, on July 1, 2024, when a new California law called Senate Bill 478 went into effect.

Which states prohibit merchants surcharging?

States with other surcharge regulations

  • Colorado allows credit card surcharging up to 2%. 
  • New York, New Jersey, Nevada, and South Dakota prohibit surcharges from exceeding the cost that the merchant pays to accept the card. (See also Visa merchant surcharge rules.)
  • The legislative intent in many states was to protect consumers, and not to restrict B2B surcharging, therefore, B2B companies may have exceptions. 

Can a B2B company use surcharge to offset fees?

The rules vary across multiple card brands and terms of acceptance. Here’s a 2025 updated review of who can surcharge, what card types, and checklist of how to roll out credit card surcharge at your company. The answers are targeted for business to business merchants, our area of expertise. Historically if a merchant complies with Visa surcharge rules, they’d be compliant with other brands, so we often cite that as the standard. A B2B company that wishes to surcharge in every state should contact an attorney.

What is a credit card surcharge?

Surcharge is any fee charged by a merchant for the use of a card.These disclosure requirements include advance notice to both Mastercard and the merchant’s acquirer of the merchant’s intention to impose a surcharge no less than thirty days before the merchant implements a surcharge.

These disclosure requirements include advance notice to both Mastercard and the merchant’s acquirer of the merchant’s intention to impose a surcharge no less than thirty days before the merchant implements a surcharge.

What’s the difference between a surcharge and convenience fee? Convenience fees can only be charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant’s customary payment channels and not charged solely for the acceptance of a Card. If a merchant only accepts credit cards, it’s prohibited. If a merchant is 100% card absent, merchant cannot charge a convenience fee.

Card brands agree on this for surcharging:

  1. Merchant Discount Rate is the fee, expressed as a percentage of the total transaction amount that a Merchant pays to its Acquirer or Service Provider for transacting on a Credit Card brand. In short, it’s typically all the fees on your merchant statement EXCEPT PCI compliance, terminal rental fees or any other special fee that is not paid via the mechanism of the per-transaction merchant discount fee. Per Visa, merchants must “Limit the amount to your merchant discount rate (MDR) for the applicable credit card or 3% whichever is lowest.” This is the reason merchants can get in trouble if their surcharge solution provider charges a flat amount for every card type.
  2. The Surcharge amount must be submitted separately (in the defined surcharge field) from the Transaction amount in the authorization and clearing message.
  3. The receipt must list the surcharge amount separately.
  4. If the original transaction has a partial or full refund, the surcharge amount must all be refunded proportionally.
  5. Surcharge on debit or prepaid cards is prohibited for all merchants.To ensure compliance use a payment gateway that can identify the card brand and type of card to allow surcharges only on eligible cards.
  6. The fee must be relative to their average cost of card acceptance.
  7. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.

How much can a merchant surcharge?

In short, surcharging is allowed to cover costs, not to make a profit. Let’s face it, based on the rules above, to simplify implementation, merchants will surcharge at the brand level because they lack the technology to discern between product types on a per transaction basis. Taking all that into account what can you surcharge?

  • Cannot exceed Maximum Surcharge Cap, which for Visa is currently 3%, effective April 15, 2023, and MasterCard remains at 4% in 2025.

Just because somebody offers it doesn’t make it right. Some companies are offering “free merchant accounts” by offsetting fees with surcharge of 3.5% or even 4%, both exceeding current rules. The average B2B company has much lower than 3.5% effective rate so that was always a violation of card acceptance rules, subject to penalty. The companies offering these services are making big money on the spread of actual fees vs what customers are paying. Again, these are card brand rules violations.

Non-compliant merchants could face fines ranging from $50,000 to $1 million according to a memo from a. credit card processor to merchants, 12/2023 ahead of expected increase in Visa enforcement in 2024 and beyond.

Surcharge checklist:

  1. Merchants must notify their acquirer 30 days before they begin surcharging; must state whether will surcharge at the brand level or product level.
    1. https://www.visa.com/merchantsurcharging
    https://www.mastercard.us/en-us/business/overview/support/merchant-surcharge-rules.html
    1. Amex- none required
  2. For card not present orders, disclose verbally if telephone; for online orders minimum 10-point Arial font, but in any case no smaller or less prominent than surrounding text.
  3. Receipt must be delivered with the surcharge as a separate line item.
  4. The surcharge amount must be sent with the transaction for authorization.
  5. Retail Point-of-Entry Disclosure example: “We impose a surcharge on credit cards that is not greater than our cost of acceptance. We do not surcharge debit cards. ” Main entrance(s) of the Merchant Outlet, in a minimum 32-point Arial font, but in any case no smaller or less prominent than surrounding text.
  6. Point of transaction sign: Every customer checkout or payment location, in a minimum 16-point Arial font, but in any case no smaller or less prominent than surrounding text.

What’s the penalty for non-compliance with surcharge rules? Fines. Acquirers of any merchant identified as surcharging improperly may be assessed an immediate US $1,000 fine. They pass those down to their clients. Acquirers (the credit card processor or merchant account provider) merchant clients could face fines ranging from $50,000 to $1 million. This is not all inclusive.

  1. Effective January 2025, Kansas allows surcharging.
  2. In 2015, the 11th U.S. Circuit Court of Appeals, a federal court, overturned Florida state law as being unconstitutional, allowing surcharges to legally continue in Florida and nine other states that had enacted bans against them. The case was a highly contentious 2-1 decision in which the court’s chief judge said the state surcharge bans (like Florida’s) were “being struck down by a federal court for no good reason.”
  3. In December 2019, Oklahoma attorney general official opinion declaring the state’s no-surcharging law unconstitutionally restricts free speech. 

Surcharge Laws Stories:

  • NYS new rules in effect on February 11, 2024. https://www.governor.ny.gov/news/governor-hochul-announces-new-law-clarify-disclosure-credit-card-surcharges-goes-effect-sunday
  • Visa Intensifies Enforcement on Merchant Surcharges https://thefinancialtechnologyreport.com/visa-intensifies-enforcement-on-merchant-surcharges/
  • Visa Revises Rules Governing Surcharge Programs https://www.taftlaw.com/news-events/law-bulletins/visa-revises-rules-governing-surcharge-programs-1/
  • 2/2023 NJ Businesses Fined For Credit Card Surcharge Without Proper Notice https://lakewoodalerts.com/cracking-down-businesses-fined-for-credit-card-surcharge-without-proper-notice/
  • California update
    https://oag.ca.gov/consumers/general/credit-card-surcharges
  • 2018 Florida https://www.nbc-2.com/story/40273084/you-can-legally-be-charged-extra-for-using-a-credit-card
  • 2018 case in California http://delfinomadden.com/credit-card-surcharge-ban/
  • http://fortune.com/2017/03/29/credit-card-charges-supreme-court-freedom-speech/

State statutes on surcharge laws

  • https://oag.ca.gov/hiddenfeeshttps://portal.ct.gov/DCP/Legal/Credit-Card-Surcharge
  • https://m.flsenate.gov/Statutes/501.0117
  • https://portal.ct.gov/dcp/legal/credit-card-surcharge?language=en_US
  • https://sll.texas.gov/faqs/credit-card-surcharge
  • https://statutes.capitol.texas.gov/Docs/BC/htm/BC.604A.htm#604A.0021
  • https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140d/Section28a Massachusetts statutes.
  • Maine https://legislature.maine.gov/statutes/9-A/title9-Asec8-509.html
  • Minnesota https://www.revisor.mn.gov/statutes/cite/325G.051

For more information, see Surcharge law resources under Merchant Alerts & Rules Links or contact your acquirer for accurate and current information specific to your situation. Neither Christine Speedy nor this web site provide legal advice. Consult an attorney for all your legal questions.

Does your company want to surcharge? Or do you want to reduce fees with payment optimization? Call Christine Speedy right now at 954-942-0483, 9-5 ET for compliant solutions. Please share your surcharge insights for others and ask any questions below. The information herein is based upon public information available at the time written and may change.

3D Merchant Services is rebranding as Greater Good Tech.

Disclaimer: This information is for reference only and is not legal advice. Rules are constantly changing, and you should verify the accuracy of surcharge laws for your business needs and location.

2024 Convenience Fee Rules Explained

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Credit card convenience fees 2024 rules explained. Visa rules on convenience fees are outlined in Table 5-4 Convenience Fee Requirements in Visa Core Rules, which was last modified April 2022.

What’s a convenience fee and when can I use it? Convenience fees can only be charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant’s customary payment channels and not charged solely for the acceptance of a Card.

  • Example 1: A merchant accepts credit cards only- Convenience fees are prohibited.
  • Example 2: A merchant gets 99% of payments via checks in the mail, ACH, and wire; they may be eligible to charge a convenience fee.

The improper use of convenience fees can result in fines. Merchants must take responsibility to be informed about the rules of card acceptance. This blog often cites Visa rules because typically if you’re in compliance with Visa’s, you’re compliant with other card brands. The rules of card acceptance are not the same as Payment Card Industry Data Security Standards (PCI).

There are three ways merchants can assess a fee to recoup some or all of the cost of card acceptance:

  1. Convenience fee is a flat rate and has restrictions that it must be a bona fide convenience. If you only accept payments online, that would make the merchant ineligible.
  2. Surcharge fees can be added in store or online for a maximum of 3%. There are many merchant solutions that are not compliant with the rules, and it’s been widely published that Visa is cracking down on compliance due to high volume of complaints.
  3. Service fees are limited to MCC code, for example, education and government.

3D Merchants Services core clients typically qualify for surcharge fees, however are frequently offered incorrect or improperly implemented solutions by other entities.

The following are all elements that can impact whether you can charge a convenience fee:

  • Federal law
  • State law
  • Rules of card acceptance, for example, Visa Core Rules
  • Merchant acquirer (credit card processor)

Who can and cannot charge a convenience fee?

  • If the Merchant operates exclusively in a Card-Absent Environment, cannot charge a convenience fee.
  • Convenience fee can only be charged by the merchant that provides the goods or services to the cardholder, not a third party.

Visa convenience fee rules excerpts:

  • Cannot be charged on a Recurring Transaction or an Installment Transaction.
  • Must be listed as a separate line item on the receipt.
  • Must be included with the total transaction. In other words, the receipt must split out the amount, but only one transaction is sent.
  • Added only to a domestic Unattended Transaction. In other words, customers self-pay.
  • Must be disclosed to customers as a charge for alternate payment channel convenience.

How much is allowed for a convenience fee?

Per Visa, the convenience fee must be a flat, or fixed amount, regardless of the value of the payment due. There isn’t a limit on the amount and a merchant may choose to dynamically generate the convenience fee amount. Regardless, the consumer must be able to opt-out prior to completing the transaction.

See Visa Core Rules Table 5-4: Convenience Fee Requirements for more information. Note, this is a change from the 2021 blog post.

Rules may vary by card brand, but typically, if a merchant complies with Visa rules, they’ll be compliant with the other brands. A convenience fee is not the same as a credit card surcharge for Visa, which also has another type called a service fee,which applies to government and education only.

Call Christine Speedy, For simple solutions to complex B2B payment transaction problems, 954-942-0483, 9-5 ET. CenPOS authorized reseller based out of South Florida and NY. CenPOS is an integrated commerce technology platform driving innovative, omnichannel solutions tailored to meet a merchant’s market needs. Providing a single point of integration, the CenPOS platform combines payment, commerce and value-added functionality enabling merchants to transform their commerce experience, eliminate the need to manage complex integrations, reduce the burden of accepting payments and create deeper customer relationships.

Please share your convenience fee insights for others and ask any questions below.

B2B credit card processing FREE analysis

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Are increasing merchant services credit card fees annoying you?

While technology can optimize fee management, there are multiple reasons new fees or rising fees may occur. Use the information for a quick self-assessment and determine whether it’s worthwhile to engage with a 3D Merchant Services payments professional for further review. This method is easier than my B2B credit card processing fact check, while still revealing problems that must be resolved.  As a processor neutral payments expert, Christine Speedy offers a unique perspective.

The areas needing most attention are rate qualification and other fees.

Here’s a shortcut to determine if you have authorization problems, which directly impact credit card processing transaction fees. Why is this important? Because unless you fix the underlying problem, switching merchant accounts will only provide partial relief from escalating transaction fees like non-. If you have any of these items below on your merchant statement, there’s a problem that is causing unnecessary extra costs.

  • Mastercard Transaction Processing Excellence Fee – Nominal Authorizations
  • Misuse
  • Integrity
  • Compliance or Non-compliance
  • Standard / STD (any)
  • EIRF
  • Data rate I
  • Data Rate II or Data Rate 2
  • Chargeback: FRAUD TRANS-NO CARDHOLDR AUTH
  • Chargeback reason: Compliance
  • Non-Qualified, NQ

Hint: If you open your merchant statement in Adobe Acrobat, in OSX with command F you can copy and paste the terms above. It’s not foolproof due to varying abbreviations, but you only need to have one of the bad items to know there’s a problem.

For card not present business to business, these are two credit card processing interchange types you should see; many often don’t and that is also a problems resulting in higher costs.

  • Full UCAF
  • Data Rate III, Commercial Level III

I don’t know why, but I get calls from other salespeople in the industry looking for solutions to help customers qualify for Data Rate II. Why wouldn’t you want the customer to qualify at Data Rate III? Makes no sense.

I also hear from merchants how they were told that the new solution would fix their level 3 data problems, but it didn’t. If you do preauthorizations, and the solution doesn’t automatically get new authorizations and manage reversals it’s not going to fix authorization problems. Always ask, “how will the payment gateway manage authorization reversals if we don’t settle for the original preauthorization amount’? That’s one of several critical key questions. If they don’t know the answer instantly, move on.

Due to constant changes in card network rules and data security compliance rules, a review by a neutral payments expert is essential. Did you have any red items? It’s time for a deeper dive into why.  Your FREE report will identify issues impacting profits and security, include action items how to fix them, and rarely requires changing financial partners.

credit card transaction fee checkup form

Call Christine Speedy, to reduce merchant fees with new or existing merchant account at 954-942-0483, 9-5 ET. With Christine as your account manager you’re assured a unique experience to maximize profits and security without business disruption.

3D Merchant Services is now WBE and WOSB certified and is rebranding to Greater Good Tech.