Surcharges and Surcharging

Surcharges are additional fees that a merchant adds to the cost of a transaction when a customer uses a certain payment method, usually credit cards. Surcharging is the practice of applying these fees.

Surcharges are typically a percentage of the transaction amount and are meant to cover the merchant’s cost of accepting card payments. This practice has become more common due to the high fees associated with credit card transactions.

However, it is important to note that surcharging is subject to regulations and laws that vary by jurisdiction. Some regions — like certain states in the U.S. — prohibit surcharging altogether. Others have strict guidelines on how and when a surcharge can be applied.

For example, in the European Union, merchants are not allowed to charge a fee that exceeds the actual cost of processing the card payment. Additionally, credit card companies like Visa and MasterCard have their own rules regarding surcharging.

As a result, merchants need to be aware of all applicable regulations and card network rules before implementing surcharges. Merchants should clearly inform customers about any surcharges before the payment is made to avoid disputes and maintain transparency.