Merchant Surcharge Q and A.

Below is a list of common questions and answers on merchant surcharging. Please note, next day funding is not available for surcharging accounts.

I am a merchant who intends to surcharge. What is the process I need to follow?

      U.S. merchants that intend to surcharge are required to:

  • Notify Mastercard and your acquirer at least 30 days in advance of beginning to surcharge. 
  • Limit surcharging to credit card purchases (Debit card, ACH/e-checks and Prepaid cards cannot be surcharged) and limit the amount to your merchant discount rate for the applicable  card surcharge*.
  • Disclose the surcharge as a merchant fee and, 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 should also consider whether they comply with all applicable state and/or federal laws. Currently, several states have laws that prohibit or limit surcharging, including Colorado (prohibition effective through 30 June 2022), Connecticut, Maine, Massachusetts, and Oklahoma.
  • For further help & instruction on filling out the merchant surcharging forms for Mastercard, click here! 

What is a payment card surcharge?

A payment card surcharge, also known as a checkout fee, is an additional fee that a merchant adds to a consumer’s bill when he or she uses a credit card payment.

  • Credit card surcharging rate is 3.31% (3.85% AMEX) per transaction.

Can I add a surcharge to card transactions?

Merchants in the U.S. and U.S. territories may add a surcharge to credit card transactions, subject to certain limitations. Merchants who choose to surcharge must follow consumer disclosure and other requirements.

What should I consider when determining whether or not to assess a surcharge on card transactions?

Before choosing to surcharge, U.S. merchants may want to consider a number of factors, including:

  • The potential impact on your customers’ experience.
  • What your competitors might be doing.
  • What information must be disclosed to your customers.

Can I assess a surcharge on both credit and debit card purchases?

No, the ability to surcharge is only to credit card purchases, and only under certain conditions. U.S. merchants cannot surcharge debit card purchases, ACH/e-checks or prepaid card purchases.

Can I assess a surcharge on debit card transactions where the debit card holder chooses “credit” on the point of sale terminal?

Yes, the ability to surcharge only to credit card and debit card purchases, and only under certain conditions. U.S. merchants cannot surcharge debit card purchases, ACH/e-checks or prepaid card purchases.

Are there limits to the amount I can surcharge?

Yes. U.S. merchants may assess a surcharge on credit card purchases that do not exceed the merchant discount rate for the applicable credit card surcharged*.

Am I required to disclose the surcharge to my customers?

Yes. U.S. merchants that surcharge must disclose the surcharge dollar amount on every receipt.

In addition, disclosures indicating that a merchant outlet assesses a surcharge on credit card purchases must be posted at the point of entry and point of sale/transaction. 

What laws exist that may relate to surcharging?

Currently, several states have laws that prohibit or limit surcharging, including, Connecticut, Maine, Massachusetts, and Oklahoma. Laws are subject to change, so please check your states current guidelines for the most up-to-date information before you begin surcharging.

I operate stores in multiple states. I understand that state laws prohibit me from surcharging in some states where I operate, but not others. Does that mean I can’t surcharge in any of the states where I operate?

No. If a merchant is legally prohibited from surcharging in one state, rules do not prevent the merchant from surcharging in other states that allow the practice.

Does the ability to surcharge apply to merchants globally?

No. The rules discussed in this Q&A related to the surcharging of credit cards and apply to purchases made in the U.S. and U.S. territories only. Surcharging remains prohibited outside the U.S., with certain limited exceptions. 

Can I assess a surcharge on E-check ACH tranactions?

No, Merchants cannot surcharge ACH/e-checks.

Merchants can access this and other information by visiting Mastercard's website.

 Information provided here is subject to Mastercard's operating regulations relating to surcharging.