A credit card surcharge will help your business recoup some of the losses involved in payment processing. The most seamless surcharge processing requires you to inform card associations and customers of your decision at the earliest time. Additionally, you should always document the surcharge on relevant documents to ensure complete transparency. 

As a merchant, the surcharging process can prove legally problematic without the right approach. Also, raising your prices is never easy since it affects the overall customer experience. Yet, businesses nationwide have lost billions by not accepting credit since it remains one of the fastest and most convenient payment methods. 

Many rules that limit or prohibit credit card surcharge practices have become overruled over the years, but some remain in effect. Therefore, it is essential to identify the fundamental requirements of the surcharging process before rolling out the initiative.

Core Surcharge Processing Considerations

Firstly, you should ensure that your business complies with state laws and the latest credit card regulations before going ahead with a surcharging campaign. Surcharge processing is illegal in Massachusetts, Connecticut, and Puerto Rico. The core surcharge processing considerations include:

  • Limiting surcharge to credit card payments (i.e., debit and prepaid cards do not qualify, as enforced by the Durbin Amendment).
  • Posting surcharge disclosures at the point-of-entry and point-of-sales. The process applies to brick-and-mortar and e-commerce establishments (where you should display disclosures on the checkout page).
  • Capping surcharge to 4% (2% for businesses in Colorado) since the initiative should help you recoup baseline costs and not serve as a profitable arrangement.   

Additionally, you will need to fulfill an additional surcharge processing disclosure for the states of New York and Maine. Specifically, your business must display the cost of cash and card payments in dollars and cents, so customers can easily compare the price difference. 

Facilitating Best Practices for Surcharge Processing 

Upon completing the checklist of surcharging prerequisites, you may proceed to convey the message to the involved parties, namely your payment processor, card associations, banks, and customers. As with the most effective marketing strategies for your business, you should communicate clearly throughout the process as you implement the surcharge. 

Informing Card Networks and Processors

You should immediately reach out to a representative of your card processing company to inform them of your intention of adding a surcharge to your transactions. Your business needs to submit an official written notice to the representative, who will help you expedite the request to the person in charge. 


Updating Your Customers 

Your customers deserve to know about the status of your surcharging practices since they will be the ones paying the fees. You should post a clear surcharge disclosure at the point of entry (where your customers enter your business premises) and at the point of sale (i.e., cashiers). 

Disclosures should be conspicuous and reflect the rate of surcharges and a disclaimer that you will not charge customers beyond your processing fee. Your surcharge signage should also specify the name of the respective card company as processors have varying regulations. 


Displaying Credit Card Surcharge Fees

Aside from on-premise notifications, your business must include surcharges as a separate line item on receipts and invoices, clearly displayed in dollars and cents. Additionally, you should constantly update your credit card processors and card networks of surcharged transactions to ensure they stay up to speed with your payments practices. 

One strategic step is to re-program your existing processing equipment and payment gateways to reflect the changes in the surcharge. Doing so helps your business account for the added sums in all receipts and invoices and makes for easier reporting.  

NMA – Optimizing Surcharge Processing

The NMA is a trusted advocate and solutions provider to help your business cope with the challenges of costly card processing fees. We provide customized payments solutions that support small and mid-sized businesses in reducing costs while offering customers card acceptance. 

NMA is here to make a difference if you require extra assistance with surcharge processing or feel that high merchant fees have become an impediment to your business growth. The average annual percentage rate for credit card users was 14.54% in 2021 – a rising sum that might affect surcharge sentiments and consumer spending. Therefore, it might be time to negotiate better processor arrangements, and we can help you get there. 

About NMA 

NMA is a merchant advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments. Since 2004, NMA’s payment processing solutions have delivered tailored solutions, best-in-class customer service, and high-quality service offerings for businesses across multiple industries. Whether it’s high-risk or low-risk, brick-and-mortar or e-commerce, NMA will create the best processing experience for your company. For more information, visit us at our legacy.nationalmerchants.com or by calling (866) 509-7199