For all card networks except American express, the notice should be in writing at least 30 days before you start implementing surcharging.
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Table of Contents
You can’t surcharge debit or prepaid cards.
The surcharge can’t be applied to payments made with a debit card or prepaid card. The processing fees for debit payments are calculated differently and are less costly to merchants than credit card payments.
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You can’t profit from surcharging.
The cost of surcharging cannot exceed 4% of the price of your transaction. The rule aims to ensure merchants don’t profit from surcharging fees. It is only used to cushion their margins by reducing credit card processing fees.
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You must surcharge the product level or card brand
MasterCard and Visa state that you can only apply the surcharge either at the product level or brand level and not both.
A brand-level surcharge means that you are applying the surcharge in the same amount for all cards from the card network. On the other hand, a product level means you apply the surcharge to a specific type of card from a network, whether a rewards card, traditional card, etc.
Is credit surcharging right for your business?
If you are on the fence on whether to implement a surcharge, you should ask yourself If your business is in a competitive market. it is unwise to a surcharge if your customer doesn’t want to pay the surcharge fee because they will take their business elsewhere
If credit card payments only fall under a small percentage of your overall business income, surcharging is unnecessary. Would your customers be open to a surcharge, or will you lose them? If your business is working with narrow margins, a surcharge will work. These are just a few questions you should ask yourself before implementing a surcharge.
