Feeling overwhelmed by the terminologies in the vast realm of payment solutions? Perhaps you’ve stumbled upon the term “surcharging” but find yourself lost in a sea of questions—what is it, how to benefit from it, and who is concerned? Wondering about the rules and considerations? Fret not, we’re here to break it all down for you. After perusing this guide, if you find yourself intrigued and seeking further assistance, Navidor is ready to provide guidance with 100% transparency.

What are surcharges, and to whom do they apply?

You might be familiar with the term “merchant surcharge“. This is the extra fee added to a customer’s bill when they use a credit card – not applicable for other payment methods like debit cards and prepaid cards. It’s a way for businesses to cover the costs of processing credit card transactions.

The merchant’s ability to apply a surcharge depends on meeting specific disclosure criteria. This involves contacting their acquirer for greater detail concerning those requirements and notifying the acquirer at least thirty days in advance regarding the merchant’s intention to impose a surcharge before its actual implementation. For instance, a merchant might use signage like: “We impose a surcharge on credit cards that is not greater than our cost of acceptance. We do not surcharge debit cards.” for both in-store and online transactions, clearly alert consumers to the practice at the point of entry, the point of sale or transaction, and on every receipt.  Merchants are free to create their own signage that aligns with surcharging requirements.

What are the surcharging limits, and what happens if you don’t comply?

Now, there’s a limit to how much you can add. Credit card companies set a cap, and recently, Visa decided to reduce it from 4% to 3%, starting April 15, 2023. This means that if the processing fees for a Visa card exceed 3%, you can only impose a maximum surcharge of 3%, and you’ll need to cover the remaining costs – if any- yourself. It’s crucial to follow these rules because non-compliance can lead to heavy fines. It’s not just about knowing these rules but abiding by them to avoid potential financial consequences.

Considerations for U.S. Merchants: To Surcharge or Not?

Before opting for surcharging, consider the impact on customer experience, competitors’ practices, required disclosures, and the overall cost of credit cards and alternative payment methods.


In summary, grasping and incorporating surcharges into financial transactions pose nuanced challenges for merchants. The imperative for clarity regarding the nature of surcharges, their applicable audience, and the governing rules becomes evident in a financial landscape marked by continual regulatory evolution. Our exploration into the complexities of surcharging, encompassing the factors shaping its application and the repercussions of non-compliance, underscores the necessity for merchants to proceed with caution, ensuring a smooth and compliant financial experience. By conscientiously considering limits, adhering to regulations, and understanding implications, businesses can confidently integrate surcharging, cultivating transparency and financial integrity in their transactions.