Credit card surcharging in 2026: what the networks and the states actually allow

Surcharging, adding a fee when a customer pays by credit card, has been allowed under Visa and Mastercard rules since 2013 and is legal in most states. It is also the area of merchant compliance where the guides on the web are most often wrong, because the rules come from three sources that change on different schedules: Visa, Mastercard, and the state where each of your locations sits. A guide written in 2023 will tell you Kansas and Oklahoma ban surcharging. Neither does now.

This article sets out what each rule-maker actually requires as of September 2026, working from the networks' own published rules and the state statutes rather than from other guides, then looks at how the processors we review implement it.

The short answer

• Credit cards only. Debit and prepaid cards can never be surcharged, even when the cardholder presses "credit".
• The cap is the lower of your actual cost of accepting the card or 3% (Visa). Two states cap it at 2%.
• Give your acquirer 30 days' notice before you start. For Mastercard, notify the network as well.
• Disclose at the door, at the till or checkout page, and as a separate line on every receipt.
• Three states ban it. Several more add disclosure rules. Three have bans on the books that courts have struck down.
• Your processor's surcharging product will still charge you processing on the surcharged amount. Read the arithmetic before you assume it takes your cost to zero.

What Visa requires

Visa's US merchant surcharge Q&A, version dated February 15, 2024, and its one-page requirements sheet, dated August 2023, set out the rules in plain terms. A merchant that intends to surcharge must notify its acquirer at least 30 days before starting; include the surcharge amount in a dedicated field in the transaction message, which the acquirer enables; limit surcharging to credit cards; limit the amount to the merchant discount rate for the card or 3%, whichever is lower; and disclose the surcharge at the point of entry, at the point of sale or online transaction, and on every receipt.

The 3% ceiling dates from April 15, 2023, when Visa cut it from 4%. The ceiling only matters if your cost of acceptance is above 3%; if you pay 2.4% to take Visa credit, 2.4% is your maximum surcharge. Visa says it enforces this with consumer complaints and annual mystery shopping by outside auditors, and that the acquirer of a merchant caught surcharging improperly faces an immediate $1,000 fine. A July 2023 alert from the law firm ArentFox Schiff describes a fine schedule that escalates to $150,000 at 150 days of non-compliance and $25,000 a month after that; that schedule is the firm's account, not something in Visa's public documents.

Two points in Visa's Q&A trip merchants up. A debit card run as "credit" is still a debit card: the choice on the terminal is between a PIN transaction and a signature transaction, not between card types, and it may not be surcharged. And a merchant may surcharge at brand level, the same fee on every Visa credit card, or at product level, a fee on particular products such as Visa Signature, but not both.

Visa also draws the line between a surcharge and a cash discount. A discount is permitted if you display only the card price per item, or the card and cash prices side by side. If the total shown at the till is reached by adding a fee for paying by card, Visa says it "may be treated as a surcharge" and subject to the surcharge rules, whatever you call it on the sign.

What Mastercard requires

Mastercard's merchant surcharge FAQ adds two obligations on top of Visa's. A merchant must give both Mastercard and its acquirer a minimum of 30 days' written notice, and the acquirer must register the merchant with Mastercard within 10 days. Notice to Mastercard is given through its merchant site and acknowledged by an automated reply; the merchant may start 30 days after that reply.

The cap is described as the merchant's average merchant discount rate for Mastercard credit, calculated over the preceding one or twelve months at the merchant's option, with an absolute ceiling of 4% that Mastercard says "only becomes relevant in the rare instances where a merchant is paying more than 4%." That FAQ is dated May 2019 and predates Visa's move to 3%. In practice the point is moot: every processor product we examined applies a 3% ceiling to all brands, and a merchant surcharging at brand level pays roughly the same for both networks. Mastercard's disclosure rule also requires the sign to state that the surcharge is not greater than the merchant's cost of acceptance.

Mastercard's FAQ is also the clearest statement of the American Express problem. If you accept a competing brand that permits surcharging but requires you to surcharge all brands equally, and that brand costs you the same or more than Mastercard, you may surcharge Mastercard only if you also surcharge that brand. American Express's merchant policy is a non-discrimination policy of exactly that kind, which is why merchants that take Amex have generally been unable to surcharge Visa and Mastercard alone. The pending Visa and Mastercard settlement would remove that link on the networks' side; it has preliminary court approval and is not yet in effect.

The states that ban it

Three state statutes prohibit surcharging today, and their wording differs in ways that matter.

• Connecticut. General Statutes 42-133ff(b): "No person may impose a surcharge on any transaction." Discounts for cash, check or debit are allowed, but only if the discount is posted on the premises, displayed online before checkout, and stated verbally for phone orders. A violation is an unfair trade practice with an additional civil penalty of up to $500 per violation. The section was amended as recently as 2024.
• Maine. Title 9-A section 8-509: a seller "may not impose a surcharge on a cardholder who elects to use a credit card or debit card." Maine is the one state whose ban names debit cards. Cash discounts are expressly not surcharges, and government entities may surcharge up to their actual processing cost.
• Massachusetts. Chapter 140D section 28A: "No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card." Discounts to encourage cash or check are permitted.

Visa's Q&A also lists Puerto Rico as prohibiting surcharges, and the processors that exclude jurisdictions from their surcharging products exclude the same four: Connecticut, Maine, Massachusetts and Puerto Rico.

The states that allow it with conditions

• Colorado. Section 5-2-212, in force since July 1, 2022, allows a surcharge of up to 2% of the total, or the merchant discount fee if lower. No surcharge on cash, check, debit, a payment processed as debit, or a gift card. Signage in statutory language must be visible on the premises or shown online before checkout, and the surcharge must appear as a separate line on the receipt.
• Oklahoma. Senate Bill 677, effective November 1, 2025, replaced an outright ban with a cap at the lesser of 2% or the cost of acceptance, disclosed at the point of entry and point of sale, on the home page and checkout page online, and verbally by phone. Credit cards only, and only where other forms of payment are accepted.
• Minnesota. Section 325G.051 allows a surcharge of up to 5% of the purchase price if the customer is told both orally at the time of sale and by a conspicuous sign, or by a posted notice during an online sale. A violation carries a civil penalty of up to $500 and a refund to every buyer. Separately, chambers of commerce and payments consultants report that Minnesota's price-transparency law, in force since January 1, 2025, requires mandatory fees to be included in advertised prices; check that with counsel before relying on a sign alone.
• New York. General Business Law 518, as amended from February 11, 2024, requires a business that surcharges to "clearly and conspicuously post the total price for using a credit card in such transaction, inclusive of surcharge." The surcharge may not exceed what the card company charges the business. Two-tier pricing, the card price posted beside the cash price, is expressly allowed. The penalty is up to $500 per violation.
• New Jersey. P.L. 2023, c.146 caps the surcharge at the actual cost of processing the payment and requires the amount to be disclosed before any charge is incurred. The Division of Consumer Affairs says a sign reading only that the surcharge "does not exceed our processing costs" is not enough: the amount, or a percentage, must be stated, on signs at the entry and the point of sale, on the menu and in the service area for restaurants, on the checkout page online, and verbally by phone. Violations are treated as consumer fraud. The Attorney General's office reported in late 2024 that, since January 2023, investigations had produced civil penalties of $500 to $4,000 against 30 businesses, mostly restaurants, bars, salons and shops, for surcharging without proper notice or refusing cash.
• Kansas. Section 16a-2-403 was amended with effect from January 1, 2025 so that a surcharge is permitted where the merchant discloses its amount "through a clear and conspicuous notice to the customer at the point of entry or the point of sale and in advance of such transaction." This followed a 2021 federal ruling, CardX v. Schmidt, that the previous ban violated the First Amendment.

The bans that are still on the books

Three states have statutes that say surcharging is illegal, and federal courts have said those statutes cannot be enforced, at least against the merchants who challenged them. This is the part most guides get wrong in one direction or the other.

• California. Civil Code 1748.1 was held unconstitutional as applied in Italian Colors v. Becerra by the Ninth Circuit in January 2018. The Attorney General's office says it will "generally apply the Italian Colors decision to merchants that are similarly situated." What California does enforce is SB 478, the hidden-fee law in force since July 1, 2024. The Attorney General's FAQ says a card fee is generally not a mandatory fee if the customer can avoid it by paying another way, but if a business accepts only cards, the fee must be in the advertised price.
• Texas. Business and Commerce Code 604A.0021 was held unconstitutional as applied in Rowell v. Paxton in 2018. The State Law Library notes the Attorney General's position that an as-applied ruling binds only the litigants, and that the separate debit card provision, 604A.002, was not addressed. The statute carries a civil penalty of up to $500.
• Florida. Section 501.0117, which makes a credit card surcharge a second-degree misdemeanour, was held unconstitutional by the Eleventh Circuit in Dana's Railroad Supply in 2015. It remains in the 2026 Florida Statutes.

Processors treat these three as "restricted" rather than banned, and their products generally allow surcharging there. The legal position is that the statutes are unenforceable on First Amendment grounds, but nobody has repealed them. If you operate in one of these states and the amounts are material, that is a question for counsel, not a blog.

Why the state lists in your processor's help centre disagree with each other

The state rules moved three times in eighteen months, and vendor documentation lags. Visa's own Q&A, dated February 2024, lists Oklahoma as a prohibiting state; that was true until November 2025. Square's help centre lists Connecticut, Maine, Massachusetts and Puerto Rico as prohibited and seven others as restricted, which is current. Nadapayments, a surcharging specialist, still lists Colorado among the states that do not permit surcharges on its blog, which has been wrong since July 2022; our review notes the contradictory state information on its site. Check the date on anything you read, including this article, and check the statute if the answer matters.

How the processors we review implement it

The mechanics vary more than the marketing suggests. In particular, watch whether the product decides the rate for you, whether it excludes debit automatically, which channels it covers, and what you still pay.

Square offers credit card surcharges in the US as an open beta. It works on the Point of Sale, Restaurant and Retail apps and on web invoices, and not on Appointments, Kiosk, Connected Terminal, Virtual Terminal or Square Online. The surcharge is capped at 3%, applies to credit only, and is not applied to ACH, debit, tips, offline or split-tender payments. Receipts carry a notice.

Toast's Credit Card Surcharging product is the most explicit about the arithmetic. It excludes merchants in Connecticut, Maine and Massachusetts and those with a direct American Express agreement, detects debit and prepaid cards automatically, applies the surcharge to the pre-tax, pre-tip amount, caps it at 3% (2% in Oklahoma) and suggests a location-specific "compliant rate" based on your estimated processing cost. It also says plainly that you remain responsible for your full processing rate on the gross amount, surcharge included. On Toast's published 2.49% + $0.15 in-person rate, a $100 sale with a 2.49% surcharge is processed at $102.49, and you pay processing on $102.49.

Stripe exposes surcharging through its API rather than a switch, and as of its current documentation the feature is in public preview on a preview API version. Stripe validates that the surcharge does not exceed a technical maximum, which is 3% for US credit cards, but leaves the merchant to calculate a compliant amount, to notify the acquirer or network, to disclose the fee before purchase, to show it separately on the receipt, and to refund it pro rata on a partial refund. The documentation says, in a highlighted note, that you are fully responsible for fines arising from non-compliance.

Helcim calls its product Fee Saver. It is optional, defaults to a 3% pass-on fee for US credit transactions, adds 0.5% for American Express and 1.5% for international cards online, and does not apply to debit, ACH, bank withdrawal, cash or cheque; Helcim requires that you accept one of those non-card methods by default, which is what keeps the fee avoidable. Two details from its help centre are worth knowing. The in-person product is not offered in Connecticut, Maine, Massachusetts, Colorado or Oklahoma, which is a conservative reading of the 2% caps in the last two. And the online fee is labelled a "convenience fee" on the receipt while the in-person fee is labelled a "surcharge"; Mastercard's rules reserve convenience fees for pre-certified government and education merchants, so ask Helcim how that is handled before relying on it. Our Helcim review's rates, interchange plus 0.4% and $0.08 in person, are what you pay on the debit and card volume the fee does not cover.

Stax sells surcharging through CardX, which it owns. It caps the fee at 3%, detects debit cards and applies no fee to them, processes the surcharge and the sale as one transaction, and itemises the surcharge on the receipt. Stax's page does not publish pricing for the product. PayJunction applies a 3% maximum, lets a merchant set a lower rate, excludes branded debit cards whether PIN or signature, and enables surcharging per location so a multi-state business can switch it off where the law requires. Clover's developer documentation describes surcharging as something a merchant configures through its Clover account or a plugin, with a notice to the customer at checkout. Because Clover is sold through banks and resellers, the rate and the handling of state restrictions are set in the reseller agreement, which our Clover review says to obtain in full rather than as a summary sheet.

Nadapayments is built around surcharging rather than offering it as a feature. Per our review, the customer pays a 3.00% surcharge on credit, the merchant pays nothing on those transactions and 1.50% + 25¢ on debit, with a $35 monthly terminal rental. The company's own blog describes a cap of 4% and a different list of excluded states from its product pages, which is one reason the review grades it B-.

The arithmetic, honestly

A surcharge programme does not usually take your card cost to zero, and the reasons are worth knowing before you sign.

• The cap is your cost of acceptance, not 3%. If Visa credit costs you 2.4%, that is the most you may surcharge it.
• Debit is untouched. Whatever share of your volume is debit, you pay for it as before, and a merchant with a low average ticket often finds that is most of it.
• Processing applies to the gross. Toast says so explicitly; assume it of any processor unless its contract says otherwise. Surcharging 2.5% on a sale that costs you 2.5% to process leaves you paying 2.5% of the surcharge itself.
• American Express, if you take it directly, has its own non-discrimination policy, and its chief executive said in December 2025 that surcharging is "a really bad customer experience." Some processors, including Toast, exclude merchants with a direct Amex agreement from their surcharging products for this reason.
• The fine lands on you. Visa's rules fine the acquirer, and merchant agreements routinely pass network fines through to the merchant. Read yours.

None of that makes surcharging a bad idea. For a high-ticket, card-heavy business such as a dental practice or an auto repair shop, it is often the single largest cost reduction available. It is a reason to run the numbers on your own statement, with your own debit share and your own state, rather than on the example in the brochure.

A checklist before you start

1. Confirm the rule for each location's state, from the statute, not a summary. Connecticut, Maine, Massachusetts and Puerto Rico: stop here.
2. Work out your actual cost of acceptance per brand from three recent statements. That, not 3%, is your ceiling, and Colorado and Oklahoma cut it to 2%.
3. Decide brand level or product level. Not both.
4. Give your acquirer 30 days' written notice, and register with Mastercard. Ask your processor in writing whether its product does this for you.
5. Put up signage at the entrance and the point of sale, on the checkout page online, and say it aloud on the phone. New York needs the full card price posted; New Jersey needs the amount, not just the fact.
6. Check that receipts show the surcharge as a separate line, and that refunds return it, in full or pro rata.
7. Check that debit and prepaid are excluded automatically, and test it with a debit card run as credit.