Argent Payments Team · August 2, 2026 · Updated October 5, 2026
Quick Answer
Whether you can surcharge a credit card transaction depends on both your card network's rules and your state's law, and both can change, so there's no single universal answer that applies everywhere. Cash discounting is generally treated differently than surcharging and tends to have fewer restrictions, which is why many small businesses use it instead. Before adding either one, confirm current requirements with your processor's compliance team; if you want a clear read on your options, reach out to our team at Argent Payments.
Offsetting processing costs by passing some of the expense to card-paying customers is legal in most of the country, but "most" isn't "everywhere," and the rules for doing it correctly are more specific than a lot of merchants assume. Getting the registration, disclosure, or state-level requirements wrong can cost more in penalties than the surcharge would have saved.
Key Takeaways
These two terms get used interchangeably, but the card networks treat them differently. Surcharging adds a fee specifically for paying with a credit card, calculated as a percentage of the transaction, and it requires advance notice to your acquirer (and, for Mastercard, to Mastercard) plus clear disclosure before the customer pays. Cash discounting instead frames the card price as the standard price and offers a discount for paying with cash, which shifts the same cost difference without technically adding a card-specific fee.
The practical effect on a customer's receipt can look similar, but the compliance requirements differ enough that most processors set them up as genuinely separate programs rather than two labels for the same thing.
Both, but the process differs. Since April 15, 2023, Visa requires you to notify your acquirer (the processor or bank that settles your card sales) at least 30 days before you start surcharging, rather than registering with Visa directly. Mastercard requires at least 30 days' advance written notice to both Mastercard and your acquirer, and your acquirer registers you with Mastercard. Both networks also set a maximum percentage and signage and receipt rules, covered below. These rules get updated, so if you set up a program years ago, confirm it still matches the current requirements.
| Program | What It Does | Typical Requirement |
|---|---|---|
| Surcharging | Adds a percentage fee for paying with a credit card | 30 days' notice to your acquirer (and Mastercard); capped at your cost or 3% (Visa) / 4% (Mastercard); disclosed at entry, point of sale and on the receipt |
| Cash discounting | Prices the card rate as standard, discounts cash payments | Clear signage; generally no network registration |
| Convenience fee | Adds a flat fee for paying through an alternative channel, such as online bill pay | Under Visa's rules: a fixed amount, the same for every payment type in that channel, disclosed before payment |
What Argent Looks For
When a merchant asks about offsetting processing costs, we walk through both surcharging and cash discounting against their specific state and typical customer base, since the right fit isn't the same for every business, and getting the disclosure wrong is the most common way either program creates problems.
Considering a surcharge or cash discount program?We’ll walk through what’s allowed in your state and what it would actually save you.
Get My Free Rate ReviewCard network rules apply everywhere surcharging is allowed. Where a state law is stricter, you follow the state. Here is how Visa's and Mastercard's current U.S. surcharge rules compare.
| Rule | Visa | Mastercard |
|---|---|---|
| Maximum surcharge | Your merchant discount rate for that credit card or 3%, whichever is lower (3% since April 15, 2023) | Your average effective merchant discount rate for Mastercard credit or 4%, whichever is lower |
| Advance notice | Notify your acquirer at least 30 days before you start | Written notice to Mastercard and your acquirer at least 30 days before you start |
| Disclosure | Point of entry, point of sale, and a separate line on every receipt, in store and online | Point of sale and on the receipt |
| Cards you can surcharge | Credit cards only | Credit cards only |
| Cards you can't surcharge | Debit and prepaid, including debit run as "credit" | Debit Mastercard and prepaid |
The percentage cap only matters if your cost is higher than it. If your merchant discount rate on a Visa credit card is 2.4%, then 2.4% is the most you can surcharge on that card, not 3%. Mastercard's own example works the same way: a merchant paying 2.50% for Mastercard credit can surcharge up to 2.50%, not 4%. If you charge one flat rate across every brand, it has to fit under the lowest cap and the lowest cost that applies. Visa also lets you surcharge either all Visa credit cards (brand level) or specific Visa credit products (product level), but not both.
Visa requires a notice at the point of entry (for a physical store, the entrance), another at the point of sale, and the surcharge shown as its own line on every receipt. The surcharge amount also has to be sent in a dedicated field in the transaction data, which your acquirer sets up. A surcharge that only shows up on the receipt, with no signage before the sale, doesn't meet the rule.
Both networks bar surcharges on debit and prepaid cards. Visa addresses a common mistake directly: when a customer with a debit card presses "credit" on the terminal, it's still a debit card, so it can't be surcharged. Pressing credit only changes whether the transaction is signature-based or PIN-based. Your surcharge setup should identify the card type from the card itself, not from the button the customer presses.
A surcharge is a percentage added to credit card payments, with every rule above attached. A cash discount makes your posted price the card price and takes money off for cash. Visa's guidance says prices have to be shown as the card price only, or as card and cash prices side by side, and the card total can't be built by adding a fee at checkout, or Visa may treat it as a surcharge. That's why a "non-cash adjustment" line added at the register is risky, and New York's Department of State lists that practice as illegal when the total price isn't posted before the sale.
A convenience fee is something else again: a flat fee for paying through a channel outside your normal one, such as online bill pay for a business that usually takes payment in person. Under Visa's rules it has to be a fixed amount rather than a percentage, apply to every payment type in that channel, and be disclosed before the customer pays. It can't be charged just because someone used a card.
One change to watch: in June 2026 a federal judge in Brooklyn gave preliminary approval to a revised settlement between Visa, Mastercard and U.S. merchants that would change a number of network rules, including some surcharging rules, over the next several years. Until the settlement is final and your processor confirms new terms, the rules above are the ones to follow.
State law sits on top of the network rules, and it moves. Several state bans have been struck down in court or repealed over the past decade, and other states have added caps or disclosure rules since 2021. Oklahoma went from a ban to a 2% cap on November 1, 2025, and Kansas replaced its old rule with a disclosure requirement on January 1, 2025. The table below covers the statutes and state guidance we could confirm as of October 2026. States not listed either have no surcharge-specific statute or have rules we couldn't confirm against a primary source, so check those with your processor too.
Before You Rely on This Table
This is a plain-language summary, not legal advice. Surcharge laws change, and how they apply can depend on your industry and how you sell (in store, online or by phone). Use it to know which questions to ask, then confirm the current rule for your state with your processor or a business attorney before you turn on a surcharge.
| State | Status | What the rule says |
|---|---|---|
| Connecticut | Prohibited | No surcharge for using any payment method, including credit cards. Discounts for cash, check or debit are allowed. (Conn. Gen. Stat. § 42-133ff) |
| Maine | Prohibited | No surcharge on credit or debit cards; discounts for other payment methods are allowed. Narrow exception for government entities. (9-A M.R.S. § 8-509) |
| Massachusetts | Prohibited | No seller may surcharge a customer for choosing a credit card over cash or check. (M.G.L. c. 140D § 28A) |
| Puerto Rico | Prohibited | Law 150 bars surcharges on credit and debit cards and allows cash discounts. A federal appeals court rejected a challenge to it in May 2025. |
| Colorado | Capped | Up to 2% of the total, or up to the merchant discount fee you actually pay. Statutory sign wording is required, and no surcharge on cash, check, debit or gift cards. (C.R.S. § 5-2-212) A separate total-price law, HB 25-1090, took effect January 1, 2026; ask your processor how it affects your price display. |
| Oklahoma | Capped (ban lifted November 1, 2025) | The lesser of 2% or your cost of acceptance, credit cards only, and only if you accept other forms of payment. Disclose at the point of entry and point of sale in person, on the home page and checkout page online, and verbally by phone. (14A O.S. § 2-211, as amended by SB 677) |
| Minnesota | Capped | Up to 5% of the purchase price, though the card network caps are lower. Tell the customer orally at the time of sale and post a sign; online, show the notice during checkout. (Minn. Stat. § 325G.051) |
| New Jersey | Capped at your cost | The surcharge can't exceed your actual cost to process the card. The amount (a percentage is fine) has to be posted before the sale at the point of entry and point of sale; restaurants must also show it on the menu. Online, show it on the checkout page; by phone, say it before charging. Saying only that "a surcharge applies" isn't enough. (N.J.S.A. 56:8-156.1) |
| New York | Capped at your cost, total-price rule | Since February 11, 2024, you must post the highest total price including the surcharge (excluding sales tax) before the sale. The surcharge can't exceed what the card company charges you, and the final price can't be higher than the posted price. (N.Y. Gen. Bus. Law § 518) |
| Kansas | Allowed with disclosure | Since January 1, 2025, a credit card surcharge is allowed if the amount is disclosed with a clear and conspicuous notice at the point of entry or point of sale before the transaction. (K.S.A. 16a-2-403) |
| California | Verify with your processor | A surcharge ban is still written into Civil Code § 1748.1, but courts have limited how it can be enforced. Under SB 478 (in effect since July 1, 2024), the Attorney General says a card fee customers can avoid by paying another way generally doesn't have to be in the advertised price, but if you accept only cards, it does. |
| Texas | Verify with your processor | A ban remains in the Business & Commerce Code (§ 604A.0021). A 2018 federal court ruling blocked enforcement in part, but a 2019 Attorney General opinion says it still applies in some situations. The Texas State Law Library describes its enforceability as unclear. |
| Florida | Verify with your processor | Florida had a surcharge ban that courts have held violates the First Amendment. We couldn't confirm the statute's current wording against a primary source, so confirm current status before surcharging. |
Total-price laws are the newer layer to watch. New York's surcharge law already requires the total to be posted, California's SB 478 targets hidden mandatory fees, and Colorado's HB 25-1090 requires the total price to be shown. If you sell in a state with one of these laws, ask your processor how your surcharge or cash discount display fits it, not just whether surcharging is allowed. And if you have locations in more than one state, Visa's guidance is that each location follows the law of the state it's in.
For the fuller picture of what you're actually being charged before deciding whether an offset program is worth it, see how much payment processing really costs.
Compliant surcharging comes down to a short list. Run through it before you start, and again whenever your processor, your rates or your state's law changes.
Surcharge Compliance Checklist
We confirm your state's current surcharging status and your card network's registration requirements before helping set up either a surcharge or a cash discounting program, rather than assuming a template that worked for another merchant applies to you.
Considering a fee-offset program? Contact Argent Payments today for a compliance check specific to your business.
Under Visa's rules, a credit card surcharge can't be more than your merchant discount rate for that card or 3%, whichever is lower. Mastercard caps it at the lower of your average effective merchant discount rate for Mastercard credit or 4%. Some states set their own limits on top of that: Oklahoma allows the lesser of 2% or your cost, Colorado allows up to 2% or your actual merchant discount fee, and New York and New Jersey limit it to your actual cost of processing. The lowest limit that applies to you is the one you follow.
Yes. Visa requires disclosure at the point of entry, at the point of sale, and as a separate line on every receipt, for both in-store and online sales. Mastercard also requires disclosure at the point of sale and on the receipt. Some states go further: New Jersey requires the amount of the surcharge to be posted before the sale, and New York requires you to post the highest total price including the surcharge.
No. Visa and Mastercard both prohibit surcharging debit and prepaid cards, and Visa says this still applies when a debit cardholder chooses "credit" at the terminal, because it is still a debit card. Your terminal or gateway needs to identify credit versus debit by the card itself, not by how the customer runs it.
No, and that's part of why many businesses choose it instead. Cash discounting frames the card price as the standard price and a cash payment as earning a discount, which is typically treated differently under card network rules than a surcharge added specifically for using a card. Visa's guidance says a cash discount program has to show either the card price alone or the card and cash prices side by side, and the card total can't be built by adding a fee at checkout, or it may be treated as a surcharge.
Consequences can include card network penalties, forced removal of the program, or exposure under state consumer protection law, depending on the state. Visa says it runs mystery shopping and that the acquirer of a merchant caught surcharging improperly may be fined $1,000 right away. Because state rules change and vary in how they're enforced, confirm current status with your processor or counsel before implementing a surcharge program.
As of October 2026, Connecticut, Maine, Massachusetts and Puerto Rico prohibit credit card surcharges by statute. Oklahoma lifted its ban on November 1, 2025 and now caps surcharges at 2% or your cost, whichever is lower. California, Texas and Florida still have surcharge bans on the books that courts have limited, so merchants in those states should confirm the current position with their processor or counsel before surcharging.
No. Under Visa's rules, a convenience fee is a flat amount charged for using an alternative payment channel, such as paying a bill online instead of at your counter, and it has to apply to every payment type accepted in that channel. A surcharge is a percentage added because the customer paid with a credit card. Charging a percentage-based "convenience fee" only on card payments is treated as a surcharge, with all of the surcharge rules attached.
Offsetting processing costs is a legitimate strategy, but it only works if it's set up to match your state's current rules and your card network's requirements. Connect with an Argent Payments specialist before rolling out a surcharge or cash discount program.
We’ll walk through what’s allowed in your state and what it would actually save you.
Get My Free Rate Review Transparent Pricing · No Long-Term Contract · Reply Within One Business Day · (404) 497-7899