Payment Processing · Buyer guide
"Zero-fee processing" is one of the most common pitches a small business hears from a card processor. The fee does not disappear. It moves to the customer who pays by card, and the processor usually keeps a percentage set by the program rather than by what your cards actually cost to accept.
Three different things are sold under that name: a surcharge, a cash discount and dual pricing. From the till they can look identical. Under Visa's and Mastercard's rules and under state law they are not, and the line between them is a single question: which price is on the shelf. We read Visa's and Mastercard's current rules, the federal and state statutes, and the published terms of the providers below on 25 September 2026.
The Visa document then draws the line that matters. The card total "must be displayed in full" and "not achieved by applying an additional fee for a card payment", because otherwise it "may be treated as, a surcharge". Mastercard's rules define a surcharge as "any fee charged by the Merchant for use of a Card" and separately allow "an immediate discount from the Merchant's list, stated, or standard price".
Federal law protects the discount, not the fee. The Durbin amendment (15 U.S.C. 1693o-2(b)(2)) stops a card network from inhibiting a discount for paying by cash, cheque, debit or credit, provided a card discount does not favour one issuer or network. The Truth in Lending Act (15 U.S.C. 1666f) stops a card issuer from prohibiting a seller's discount for paying by cash, cheque or similar means, and says such a discount is not a finance charge if it is offered to all prospective buyers and disclosed clearly and conspicuously. Neither says anything in favour of a fee added at the register.
The practical consequence is debit. A surcharge can never be applied to a debit card, so a surcharging merchant still pays full processing costs on every debit sale. A cash discount or dual pricing program, done properly, charges the card price to anyone paying by card, debit included, because the card price is the posted price and the network rules permit a discount for other methods. Neither network puts that in a sentence, but it follows from the rule text, and Toast's own cash discount overview says its program recovers processing costs from guests who pay with debit or credit cards.
It is why dual pricing is sold as recovering more than surcharging does, and why a program that adds a fee at checkout and applies it to debit cards is where the trouble starts. Louisiana's Act 751, in force since 1 August 2026, forbids a retail business from imposing "a surcharge on a cardholder who uses a debit card", defined as any additional amount imposed at the time of the transaction for using one. The attorney general enforces it, and a customer can sue after giving the business 30 days' notice to cure. The act does not mention cash discounts. A debit fee added at the till looks squarely inside it.
Some programs post the cash price and then add a line on the receipt called a non-cash adjustment, service fee or processing fee, for every card, credit or debit. Visa says a card total built that way "may be treated as" a surcharge, and on a debit card that is a surcharge both networks prohibit. Providers who sell these programs say so plainly:
Calling it a service fee does not help. Visa's rules reserve "service fees" for utilities, schools, courts, fines, taxes and government, so a restaurant or shop cannot use that route. New York's General Business Law section 518, in force since February 2024, requires a seller that surcharges credit cards to post the total credit card price, caps the surcharge at its actual cost, and expressly allows a two-tier system with the card price posted alongside the cash price.
Only what each provider's own page says, as read on 25 September 2026:
Stax and Nadapayments publish what you pay on debit. The dual pricing and cash discount programs mostly publish what your customer pays. What your statement shows the processor keeping is the number to ask for.
On a surcharge, the ceiling is also a limit on what you recover. With a 3% surcharge on a $100 sale and a real cost of 3.5%, the card total is $103, the processor takes about $3.61 and you keep about $99.39. Recovering the whole cost would need a surcharge of about 3.63%, which Visa does not allow.
On dual pricing, nothing ties the program rate to your cost. PAYARC's $104 card price yields exactly $100 to the merchant, which means the processor's fee is whatever the program is set to, 3.85% of the card total. Compare that with what you would pay on interchange-plus pricing, where the card network's cost is passed through. The site's analysis of Visa's small-merchant interchange puts a plain Visa credit card tapped at a small shop at 1.29% plus 10¢ in interchange, and a regulated debit card at 0.05% plus 21¢. The customer is paying the gap. Whether that is acceptable is your decision, but it is not zero.
The network rules are the floor. Several states go further:
The site's guide to surcharging rules sets out the network rules and the states in detail. The pending Visa and Mastercard class settlement would write dual pricing into the network agreements explicitly, allowing a merchant to show a total credit card price and a separate price for cash or another method. It is not in force: final approval is still pending, and our explainer on the settlement covers where it stands.
