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You can offset credit card processing costs by adding a surcharge in most US states, subject to state law and card network rules. Your card network also sets limits and requires you to tell your customers.
A credit card processing fee is what online stores pay to accept card payments. They cover interchange fees paid to the customer’s issuing bank, card network assessments, and the payment processor’s fee.
For example, Shopify Payments charges 2.9% plus 30¢ for standard online card payments on the Basic plan in the US. At that rate, a $100 payment costs $3.20 to process.
Who picks up that $3.20 is a business decision as well as a compliance question. Ahead, learn US surcharge rules, how to pass on eligible processing costs, and alternatives to charging customers extra.
Credit card surcharge laws by state
The table below summarizes selected state prohibitions, specific restrictions, and legally disputed bans as of October 23, 2026. It focuses on standard retail transactions and selected pricing requirements. Government payments and certain other transactions have separate rules or exceptions.
Where surcharging is permitted, both state law and card network rules apply. Visa’s maximum is 3%, and Mastercard’s is 4%, with acceptance-cost limits potentially reducing those ceilings. A higher state cap does not override a lower applicable network limit. Visa and Mastercard prohibit surcharges on debit and prepaid cards, including debit cards processed as “credit.”
| State | Status | Cap or limit | Notice or pricing requirements | Source |
|---|---|---|---|---|
| California | Statutory ban limited by court ruling; pricing laws still apply | Applicable network limits | Disclose price differences. If credit cards are the only accepted payment method, include the mandatory card fee in the advertised price. | Attorney General guidance and SB 478 guidance. |
| Colorado | Permitted with restrictions | Choose either a surcharge capped at 2% or one capped at the actual merchant discount fee. Network limits also apply. | Use the required statutory notice, corresponding to your chosen cap in-store or before completion of an online sale. Itemize the surcharge on the receipt. | Colorado Attorney General. |
| Connecticut | Prohibited for standard retail transactions | No surcharge permitted | Disclosing a surcharge doesn’t make it permissible. Properly disclosed cash discounts are permitted. | Department of Consumer Protection. |
| Florida | Permitted following a court ruling; specific food-service disclosure rules apply | Applicable network limits | Food-service establishments must disclose the amount or percentage and purpose on applicable menus, contracts, and ordering websites or apps. Bills must identify the charge and its amount or percentage; receipts must show it separately. | Federal court ruling and Florida Statutes §509.214. |
| Georgia | Permitted; disclosure requirements described in AG guidance | Acceptance cost, according to Attorney General guidance, subject to network limits | Post an entrance notice. Disclose the exact amount at checkout and on the receipt. For online purchases, disclose it on the first page requesting card information. | Georgia Attorney General guidance. |
| Kansas | Permitted with advance disclosure | Applicable network limits | Disclose the surcharge amount clearly at entry or the point of sale, before the transaction. Network rules can require notices in additional places. | Kansas Statutes §16a-2-403 |
| Maine | Prohibited for standard retail transactions | No surcharge permitted | The retail prohibition covers credit and debit cards. Discounts from the regular price are permitted. | Maine Revised Statutes §8-509. |
| Massachusetts | Prohibited for standard retail surcharges | No surcharge permitted | Cash discounts must be available to all prospective buyers and disclosed clearly and conspicuously. | Massachusetts General Laws, Chapter 140D, §28A. |
| Minnesota | Permitted with restrictions | 5% under state law, with lower network limits applying | In person, provide oral notice and posted signage. Online, display a conspicuous notice during the sale or checkout. Provide oral notice for telephone transactions. | Minnesota Statutes §325G.051. |
| New Jersey | Permitted with restrictions | Actual processing cost, subject to network limits | Disclose the amount before the customer incurs charges. In-store notices belong at entry and checkout; restaurants must post notices in the customer service area and on menus. Electronic checkout and phone payments require electronic and verbal notices, respectively. | P.L. 2023, Chapter 146. |
| New York | Permitted with restrictions | The processing charge imposed on the business, subject to network limits | Display the full credit card price before checkout. You can also display the cash price. A percentage-fee notice alone is insufficient. | New York surcharge guidance. |
| Oklahoma | Permitted with restrictions | Lower of 2% or actual processing cost | Display the amount at the entrance and checkout for in-person sales, and on the homepage and checkout page online. Give verbal notice for phone transactions. Customers must have an alternative to paying by credit card. | Oklahoma SB 677. |
| Texas | Statutory ban limited by a court ruling; enforceability depends on circumstances. | Obtain legal advice before setting a surcharge | The Texas State Law Library cautions that the statutory ban may remain enforceable in some circumstances. Have counsel review your proposed policy. | Texas State Law Library. |
| Virginia | Subject to mandatory-fee pricing rules | Applicable network limits | Advertised or displayed prices must include mandatory fees and surcharges. Review whether customers can avoid the payment fee through another accepted method. | Virginia Code §§59.1-607 and 59.1-608. |
Puerto Rico also prohibits credit card surcharges. A federal appeals court upheld the challenged law in May 2025.
If your state isn’t listed above, check its current requirements and your card network’s rules before adding a surcharge.
How to pass on credit card fees to customers
Work with your payment processor to set the fee, exclude ineligible cards, and provide the required notices. A convenience fee follows separate rules—under Visa’s rules, it must cover a qualifying alternative payment option outside your usual payment channels.
For example, a business that normally takes payments in person may qualify to charge a convenience fee for an optional phone-payment service. Confirm eligibility with your processor before introducing one.
According to J.D. Power’s 2026 U.S. Merchant Services Satisfaction Study, 35% of US small businesses add credit card surcharges. But 32% of merchants say customers occasionally or frequently abandon a purchase when a surcharge is added.
Determine whether surcharges are legal in your state
For in-person sales, check the laws where each store operates. If you have locations in several states, you may need a different surcharge policy for each.
For online and phone sales where the card’s not present, have an attorney determine which states’ laws apply. Their scope varies: New Jersey’s law addresses transactions occurring in New Jersey, while Minnesota’s law addresses sellers doing business in Minnesota and transactions in the state.
Have counsel review where your business and customers are located and how each sales channel operates before configuring surcharge rules based on billing or shipping addresses.
Follow regulations
Apply the lowest relevant limit under state law, your card network’s rules, and your processing agreement. Visa and Mastercard set different ceilings:
- Visa: The lower of 3% or your merchant discount rate for the applicable credit card.
- Mastercard: A maximum of 4%, subject to its acceptance-cost calculation and any lower applicable limit. Product-level surcharges have an additional calculation explained below.
The often-cited 4% ceiling is Mastercard’s network limit. Federal law sets no general 4% cap on merchant credit card surcharges.
Ask your processor to calculate the permitted rate from your processing statements. For example, a 2.5% acceptance cost would limit a brand-level surcharge to 2.5%, even where the network ceiling is higher.
If you’re using Shopify Payments, go to Finance > Payouts > View transactions > Export to download your transaction records.
The CSV includes card brand, transaction amount, and fees. Use these records to support your processor’s review of eligible credit card transactions and the permitted surcharge rate.
Visa actively enforces its rules. Their merchant surcharge guidance states that a merchant’s acquirer may face an immediate $1,000 fine for improper surcharging. Review your merchant agreement to understand whether penalties can be passed on to your business.
Notify the credit card networks
Contact your acquirer—the financial institution that handles credit card acceptance for your business—before introducing a surcharge. Your payment processor can help coordinate the required notices:
- Visa: Notify your acquirer at least 30 days before surcharging begins. Confirm that your payment setup will transmit the surcharge amount in Visa’s designated transaction-data field.
- Mastercard: Notify both Mastercard and your acquirer at least 30 days in advance. Follow Mastercard’s merchant surcharge registration process.
For Discover and American Express, ask your processor to confirm the notice and registration requirements under your merchant agreement. Keep records of submitted notices and the agreed launch date.
Display notices
Disclose the surcharge early enough for customers to choose how to pay. Build the disclosures into each sales channel:
- Store entrance and website. Place a conspicuous notice at the entrance to your shop and the relevant website entry page.
- Checkout. Show the applicable percentage or amount before the customer pays. Make online notices readable on mobile as well as desktop.
- Phone orders. Tell the customer about the surcharge before processing payment, following any applicable state requirements.
- Receipts. Show the surcharge’s dollar amount as a separate line item on printed and electronic receipts.
On Shopify, you can use your theme’s announcement bar to display an upfront surcharge notice and link to your payment policy. Keep the notice visible and confirm that your payment setup also provides the required checkout and receipt disclosures.
Visa’s sample disclosure signs identify the percentage or flat fee, state that it stays within the merchant’s acceptance cost, and explain that debit cards are excluded. Adapt the wording to your actual policy and applicable laws.
Card-network disclosure rules and state pricing laws impose separate obligations. In New York, for example, display the full credit card price in dollars and cents before checkout. Posting a sign announcing an additional percentage fee falls short of that requirement.
Only surcharge credit card payments
Visa and Mastercard prohibit surcharges on debit and prepaid cards. This restriction also covers a debit card processed as “credit,” including a signature-based transaction. Work with your processor to ensure your payment system identifies the underlying card type and excludes debit and prepaid payments.
According to Worldpay’s 2026 Global Payments Report, credit cards represented 32% of US online transaction value and 40% of point-of-sale transaction value in 2025. Debit cards accounted for 16% online and 28% in stores. Worldpay reports digital wallets separately, although those wallets can also be funded by cards.
Before launch, test credit, debit, and prepaid payments across your sales channels, including cards used through supported digital wallets or cards on file. Confirm that eligible credit payments receive the correct surcharge and that debit and prepaid card payments receive none.
Choose your surcharge type
Visa and Mastercard permit brand-level or product-level surcharging. Choose one approach for each network—you can’t combine both within that network:
- Brand-level. Apply the same surcharge percentage to all credit cards within a network, regardless of the issuing bank.
- Product-level. Apply the same surcharge to cards within a particular network-defined product, such as Visa Signature. Your payment system must identify the eligible product correctly.
Mastercard’s product-level calculation uses the cost of accepting that product minus the Durbin Amendment’s debit-interchange cap. Have your acquirer calculate the permitted amount. Ask it to review competing-network requirements too, because accepting American Express or Discover can affect how you surcharge other brands.
For Shopify stores, payment-method customization and surcharge collection require separate checks. In the US, customizing credit card fields at checkout requires Shopify Plus. These controls let you hide, rename, or reorder payment options, but they don’t calculate and collect a surcharge.
A third-party fee app for Shopify offers additional options, depending on your plan, payment provider, and checkout settings. Make sure that the developer and your processor support your surcharge policy, including eligible-card identification, debit and prepaid exclusions, fee caps, and disclosures.
If you offer Shop Pay or other accelerated checkouts or digital wallets, make sure that they're compatible, too.
Alternative strategies to reduce credit card fees
Before passing processing costs on to customers, review whether you can lower them. Your payment methods, transaction sizes, and processor’s pricing all affect the bill.
Set a minimum purchase amount
US businesses can set a minimum purchase amount of up to $10 for credit card payments. The minimum must apply equally across credit card networks and issuers. Visa’s rules limit this permission to credit cards issued in the US or its territories and prohibit minimums on debit and prepaid card purchases.
A minimum can reduce the proportion of each sale spent on fixed transaction fees. For example, a 30¢ fixed fee represents 6% of a $5 purchase and 3% of a $10 purchase, before any percentage-based processing charge.
Post a visible notice, such as “$10 minimum for credit card purchases,” and train staff to distinguish eligible credit cards from debit and prepaid cards. For online sales, confirm that your checkout can apply the minimum specifically to eligible credit card payments. Track abandoned purchases with merchant fee savings to assess the effect on sales.
Offer a discount or dual pricing
Where permitted, offer a discount to customers who use a payment method that costs you less to accept, such as cash or ACH. With dual pricing, you display both the regular card price and the discounted price before the customer purchases.
For example, suppose an item’s regular price is $100 before tax, and you offer a 3% cash discount:
| Payment method | Displayed price | Calculation |
|---|---|---|
| Credit card | $100 | Regular price |
| Cash | $97 | $100 minus a $3 discount |
The credit card customer pays the advertised $100. The cash customer receives the discount and pays $97.
Advertising only $97 and then adding a $3 credit card fee at checkout creates a surcharge. Under Visa’s cash discount guidance, display either the regular card price or both prices side by side. The final card price must match the displayed card price, plus applicable taxes and other disclosed charges.
Shopify POS supports percentage and fixed-amount custom discounts. Your staff with the appropriate permissions can apply a discount to the cart when a customer chooses cash. Add an Apply discount tile to the POS smart grid for quick access, and train staff to apply your advertised policy consistently.
For online orders, Shopify lets you set up manual payment methods, including bank transfers, with payment instructions for customers. Shopify doesn’t charge third-party transaction fees on manual payments, although your bank may charge its own fees. The orders remain unpaid until you receive the funds and mark them as paid.
If you sell wholesale, eligible US stores can also accept ACH Direct Debit for B2B orders through Shopify Payments. Your customers must pay in US dollars from a US bank account. Compare your ACH payment processing fees with your card rates and account for confirmation taking up to four business days.
The steps to set up a bank payment option and the step to apply the bank payment discount are separate. Make sure you can restrict any discount to the payment method that you intend to use at checkout. Consider whether processing savings exceed discount fees, alternative payment fees, and additional administrative expenses.
Seek lower credit card processing rates
Card networks set interchange rates. Your payment processor sets its own markup, which may be negotiable. Request a breakdown of your charges, including the processor’s fees and network costs where your pricing model separates them. Then:
- Review pricing models. Interchange-plus pricing separates interchange costs from the processor’s markup. Flat-rate pricing bundles costs into a stated transaction rate. Evaluate both using your sales volume, average order value, and customers’ card types to estimate your total bill.
- Negotiate processor charges. Ask about a lower markup, reduced per-transaction charges, or waived account fees. Bring recent processing statements and evidence of increased sales volume or a low chargeback rate to support your request.
- Request quotes based on the same sales data. Have each provider estimate costs for the same month of transactions. Include monthly fees, payment gateway charges, equipment costs, and contract termination fees when assessing the offers.
- Review settlement practices. Ask your processor whether late submission or incomplete transaction data is increasing your costs, and which changes are within your control.
For Shopify merchants, Shopify Payments rates vary by plan. Compare any processing savings from upgrading with the additional subscription cost. When Shopify Payments is your sole payment provider, orders incur no third-party transaction fees; card processing charges and your Shopify subscription still apply.
Vin Chicago, for example, found sizable savings after bringing their retail and online operations onto Shopify. The wine retailer reported saving 0.30 percentage points on credit card processing with Shopify Payments.
“We're saving 30 basis points with Shopify, which is just unheard of. These savings alone nearly offset their entire annual Shopify subscription,” says Owner Peter Schwarzbach.
Passing credit card fees to customers FAQ
Is it illegal to charge a 3% credit card fee?
A 3% credit card surcharge can be legal in the US, depending on state law and card-network rules. Visa limits surcharges to the lower of 3% or your acceptance cost. A business paying 2% to accept a Visa credit card can charge at most 2%, subject to any stricter state requirements.
Why are businesses passing on credit card fees?
Businesses pass on credit card fees to recover processing costs and preserve their profit margins. Those fees cover the issuing bank, card network, and payment processor. A surcharge shifts some or all of these costs to customers paying by credit card, within applicable legal and network limits.
Can you charge card fees to customers?
Yes, many US merchants can pass credit card processing costs to customers through a disclosed surcharge. You must follow applicable state laws, network limits, and notification requirements. Visa and Mastercard prohibit surcharges on debit and prepaid cards, including debit cards processed as “credit.”
Can merchants charge a 2% surcharge on credit card payments?
Yes, where state law permits surcharging, and the 2% fee meets card-network requirements. Your eligible acceptance cost must support that rate. For example, a merchant paying 1.5% to accept Visa credit cards is limited to 1.5%. Required advance notices, customer disclosures, and receipt itemization also apply.
How do you inform customers of credit card fees?
Post clear notices at your store entrance and checkout, and if you accept payments online, disclose surcharges before payment. State the rate or amount and itemize the dollar charge on receipts. Give verbal notice for phone orders where required. Follow state pricing rules too: New York requires the full credit card price to be displayed before checkout.
