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Can The Merchants Charge Customers Additional Fee To Offset Credit Card Processing Fee?

Can The Merchants Charge Customers Additional Fee To Offset Credit Card Processing Fee?

Credit card processing fee is something that every online merchant should understand. The ecosystem is quite dynamic and merchants operating online must embrace it to conduct their online business smoothly. There are different types of credit card processing fees and at International Payment Solutions, we have already covered those fees. Here, we will basically cover an important question that definitely titillates the mind of most businessmen and consumers.

If you are operating an online business, you have probably know the different types of credit card processing fees. Well, these are something that merchants want to skip. They utilize various plans in order to offset the credit card processing fees. Well, merchants operating online businesses think that they can reduce the credit card processing fees by charging customers some additional credit card processing fees. But, is this possible?

Well, there are different consumer guidelines, credit card brand agreements and different laws that merchants will have to follow. The entire scenario depends upon the type of business you do and the region where you are doing the business.

Different Types Of Credit Card Processing Fees- Surcharge Fees And Convenience Fees

In order to know the answer, you must know the difference between the surcharge fees and the convenience fees. Surcharge fee is something that is closely associated with the credit card processing fee. Well, merchants generally pay fees for accepting card payments from the customers. Now, the surcharge fees are designed in such a way so that they can mitigate or reduce the overall cost of these credit card processing fees that merchants pay. Surcharge fees basically indicate the passing of credit card processing fees onto the customers. The main objective of these types of processing fees is to mitigate or reduce the burden of overall credit card processing fees from the shoulder of the merchants.

On the other side, the convenience fee is completely different from the surcharge fees. Merchants charge customers convenience fees when they offer any additional payment option that is not generally available at their business. If the merchants accept payments that are in-person in nature and offering any additional payment option to add convenience to the overall payment process, the merchants can charge convenience fees.

Credit Card Processing Fees- MasterCard And Visa Issued Settlements

MasterCard and Visa are the two top credit card brands. In Canada, these credit card brands issued lawsuit settlements regarding the credit card processing fees. It is something that merchants will have to pay when they receive card payments from the consumers. So, last year, these two credit card brands sketched guidelines. The guidelines were all about charging the surcharge by the merchants. However, there is no additional information on when the surcharge can be applied.

If we talk about the United States, merchants can charge customers surcharge. Yes, the credit card brands allow the merchants to do it. However, the merchants will have to follow the guidelines set by the credit card brands. If the merchant is operating his or her business in an area where the credit card surcharge is banned, the merchants cannot impose the credit card processing fee on the consumers.

States Where Credit Card Surcharge Is Not Allowed

The credit card surcharge fee has a very inextricable connection with the credit card processing fee. Well, there are certain states where the merchants cannot charge the credit card surcharge. If you are into a digital business, it is very important to know about these states. We at International Payment Solutions have added the names of these states here. So, do not skip the following points:

  • Colorado: Under sections 29-11.5-103(3) and 24-19.5-103(3) of the Colorado state law, the merchants cannot impose any sort of credit card surcharge fee on the credit cardholders.
  • California: California does not allow the merchants to charge any extra fee or credit card surcharge fee whenever the customers make credit card transactions instead of cash transactions.
  • Connecticut: Connecticut does not have any sort of surcharge fee. Here, the merchants cannot impose any sort of surcharge fee on the buyers in any kind of credit card transactions or sales transactions.
  • Florida: According to the Consumer Protection Status in Florida, the merchants cannot charge a surcharge fee.
  • Kansas: Well, in Kansas, merchants are not allowed to take any credit card surcharge fee from the customers.
  • Massachusetts: Under section 28A, merchants cannot take any surcharge fee from the consumers.
  • Maine: There is a debit card and credit card surcharge prohibition in the credit card processing fees guidelines in Maine. Therefore, businessmen cannot impose credit card surcharge fees upon the consumers.
  • Puerto Rico: Puerto Rico is another state where merchants cannot charge credit card surcharge fees.
  • Texas: Texas consumer protection guidelines have surcharge fee prohibition and so, the merchants cannot take any sort of credit card surcharge fee.
  • Oklahoma: The Consumer Credit Code in Oklahoma has a prohibition in credit card surcharge fees. No seller can impose a surcharge fee on the consumers.
  • New York: The general business law in New York prohibits the merchants from taking any sort of extra fee or surcharge fee.
Opinions Of Credit Card Brands On Credit Card Surcharge

It is very essential to know what the top credit card brands such as Visa, MasterCard, and American Express are saying about the credit card surcharge.


Under the Visa Service Fee Program in Canada, the merchants can take service charge. Well, the business category codes include tax payments, fines, childcare, post-secondary institutions, real estate agents and utilities. Well, the businessmen can take up to 1.5% on the eligible debit card transactions and in the case of eligible credit card transactions, they can take up to 2.5% charge. As per section, merchants can assess variable or fixed credit card surcharge fees on the eligible Visa credit card transactions. Well, the surcharge can be applied either on the product or on the credit card brand.


Under section 5.11.2, you will get to know about the credit card processing fees details of MasterCard. Well, in Canada, MasterCard clearly indicates that a merchant can provide a discount to the customers in various forms of online payment. However, the merchants must mention it at the point of interaction with customers.

If we talk about the MasterCard credit card surcharge rules in the United States, it consists of the following aspects:

  • Registration of the acquirer
  • At the point of interaction, the merchants must disclose the surcharge fee
  • Transaction requirements
American Express

Well, the Canadian Merchant Policy of the American Express has the following terms and conditions:

  • The merchants cannot persuade the cardholders to use different payment methods such as paycheques.
  • The businessmen cannot impose any sort of conditions, and restrictions upon the cardholders except for cash transactions or electronic fund transfer.
  • Merchants cannot make any sort of implication directly or indirectly that they prefer other payment modes.

A surcharge fee is a kind of credit card processing fee. Talking about the policy of surcharge fee, the US Merchant Policy is almost similar to that of the Canadian Merchant policy.

Not An IPS Merchant?

As of now, you have understood why merchants cannot charge any additional fee to offset the credit card processing fee. Now, if you want to accept online credit card payments, you must need an online payment processor. International Payment Solutions offers an affordable, transparent and honest credit card processing fee structure. So, what are you waiting for? Visit International Payment Solutions today and become a merchant.

Start accepting credit card online and/or in your store today! , Fill out the below form for a free consultation, we will get back to you shortly:

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