Looking for a credit card surcharging solution to offset expenses? The rules vary across multiple card brands and terms of acceptance. Here\u2019s an 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, my 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.<\/p>\n\n\n\n
Surcharge is any fee charged by a merchant for the use of a card.<\/p>\n\n\n\n
What’s the difference between a surcharge and convenience fee<\/a>?<\/strong> Convenience fees can only be charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant\u2019s customary payment channels and not charged solely for the acceptance of a Card. If a merchant only accepts credit cards, it\u2019s prohibited. If a merchant is 100% card absent, merchant cannot charge a convenience fee.<\/p>\n\n\n\n In short, surcharging is allowed to cover costs, not to make a profit. <\/strong>Let\u2019s face it, based on the rules above, to simplify implementation, merchants will surcharge at the brand level<\/strong> because they lack the technology to discern between product types on a per transaction basis. Taking all that into account what can you surcharge?<\/p>\n\n\n\n Just because somebody offers it doesn\u2019t make it right. <\/strong>Some companies are offering \u201cfree merchant accounts\u201d 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.<\/p>\n\n\n\n Per Visa, as of April 15, 2023, they are “Connecticut, Maine, Massachusetts, and Oklahoma. Note also that Merchants located in Colorado may not surcharge more than 2% as per State law.” However, due to federal and other court rulings, multiple states have backed away from the bans. The legislative intent in many of these states was to protect consumers, and not to restrict B2B surcharging, therefore, B2B companies may have exceptions. <\/p>\n\n\n\n What’s the penalty for non-compliance with surcharge rules<\/strong>? Acquirers face fines. Acquirers of any merchant identified as surcharging improperly may be assessed an immediate US $1,000 fine. This is just the beginning and is not all-inclusive. Visa is proactively enforcing surcharge rules from April 15, 2023. <\/p>\n\n\n\n Surcharge Laws Stories:<\/strong><\/p>\n\n\n\n For more information, see Surcharge law resources under Merchant Alerts & Rules Links<\/a> 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.<\/p>\n\n\n\n Does your company want to surcharge? Call Christine Speedy<\/a> right now<\/strong> at 954-942-0483, 9-5 ET for a compliant solution. 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.<\/p>\n\n\n\n 3D Merchant Services is rebranding as Greater Good Tech<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":" Looking for a credit card surcharging solution to offset expenses? The rules vary across multiple card brands and terms of acceptance. Here\u2019s an updated review of who can surcharge, what card types, and checklist of how to roll out credit … Continue reading Card brands agree on this for surcharging:<\/h1>\n\n\n\n
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How much can a merchant surcharge?<\/h1>\n\n\n\n
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Surcharge checklist:<\/h1>\n\n\n\n
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Which states prohibit merchants surcharging?<\/h1>\n\n\n\n
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https:\/\/oag.ca.gov\/consumers\/general\/credit-card-surcharges<\/li>\n\n\n\n
https:\/\/www.natlawreview.com\/article\/parties-case-challenging-constitutionality-ny-no-credit-card-surcharge-law-jointly<\/li>\n\n\n\nState statutes on surcharge laws<\/h1>\n\n\n\n
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