Is Charging Customers a Fee Legal?

May 8, 2009
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Part II –Visa & MasterCard Surcharge Regulations by Sean Franke, La Verne Chamber Member


It’s not too hard today to find stores adding flat fees or a percentage rate to credit card transactions. Surcharging is one way for business owners to offset the rising costs of accepting credit cards but are businesses allowed to surcharge?

The card associations, Visa and MasterCard, obviously don’t want merchants adding fees to card transactions.  Because doing so discourages card usage.  So what are the actual regulations regarding surcharging?  Visa states “Always treat Visa transactions like any other transaction; that is, you may not impost any surcharge on a Visa transaction.” – Rules for Visa Merchants pg 10.  MasterCard states in Rule 5.9.2 “A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction.”

Most businesses today pass the cost of accepting credit cards by integrating those fees into the cost of goods and services.  Another effective method is to offer a cash discount.  Both Visa and MasterCard have provisions for merchants offering a cash discount.  Keep in mind the cash price must be present as a discount from the standard price – not added to the cash price.

Established in 1999 by Sean Franke, Electronic Merchant Services Inc., a registered ISO/MSP with US Bank – Minn. MN, provides credit card processing and merchant account services for hundreds of businesses in Southern California. Sean can be reached at 909.971.9583 or

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