Surcharge, Cash Discount or Convenience Fee: The Rules

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This page is general information, not legal advice, current as of October 8, 2026. It summarizes the Visa Core Rules and Visa Product and Service Rules (18 April 2026) and Visa's U.S. Merchant Surcharge Q&A. Mastercard, American Express and Discover set their own rules, and state and provincial laws apply on top. CELER Merchants is an independent merchant services agent, not a law firm or a processor. Confirm your plan with your processor and your own counsel before you change how you charge.

Surcharge: a fee on credit card payments

Visa's Q&A says a merchant that surcharges must give its acquirer at least 30 days' notice, limit the surcharge to credit cards, cap it at its merchant discount rate for that card or 3%, whichever is lowest, and disclose it at the point of entry, at the point of sale and on every receipt as a separate line. Visa's rules add that online, phone and unattended customers must be able to cancel after the surcharge is disclosed, and that debit cards must not be surcharged even when the customer presses a credit button. Our signage guide goes through the disclosure details.

Cash discount: a lower price for paying another way

With a cash discount, the posted price is the card price and customers paying by cash or another non-card method get a reduction. Visa's Q&A says the program is handled correctly only if prices are shown as the card price alone, or card and cash prices side by side, and the card total is not reached by adding a fee at the register. If a fee is added for card payment, Visa says the program may be treated as a surcharge, whatever it is called. Our cash discount and surcharging guide compares the structures in detail.

Convenience fee: a flat fee for an alternative channel

Visa's rules define a convenience fee as a fee for a bona fide convenience to the cardholder, such as an alternative channel outside the merchant's customary payment channels, that is not charged solely for accepting the card. In the US, Table 5-5 of the rules says a convenience fee must be: added only to a card-absent transaction; not charged if the merchant operates only in card-absent environments; charged only by the merchant providing the goods or services; applied to all forms of payment accepted in that channel; clearly disclosed before the transaction is completed, with the chance to cancel; a flat or fixed amount regardless of the payment value; included in the transaction total; not charged in addition to a surcharge; and not charged on recurring or installment transactions. In practice, a business that normally takes payment in person and also offers phone payments may be able to use one for those phone payments. An online-only store cannot.

Service fees are a separate category

Visa's rules also describe service fees, which in the US are limited to specific merchant categories such as utilities, schools and colleges, and government payments like taxes and fines, with their own requirements. Most small businesses are not in those categories, so do not assume a service fee is an option without confirming your merchant category with your provider.

Where state and provincial law steps in

Card brand rules apply everywhere you accept that brand, but local law decides what is allowed at all. Some US states and territories prohibit credit card surcharges outright; our state-by-state table lists Connecticut, Maine, Massachusetts and Puerto Rico among them. Others allow surcharges with a lower cap or specific sign wording. In Canada, the rules differ by province. Consumer protection and pricing laws can also apply to how fees are advertised. Check the rules for every place you sell, including online sales to customers in other states.

Before you add any card fee

1. Decide which structure fits how you actually take payments. 2. Check your state or province, and each card brand you accept. 3. Ask your processor what it supports and how the fee will appear in the transaction data. 4. Give any notice the rules require before you announce or start. 5. Update signs, checkout pages, invoices and receipts. 6. Train staff on what to say and on keeping debit cards fee-free where surcharging. 7. Keep records of your notices and disclosures. Getting it wrong can lead to complaints, chargebacks, fines or action from your provider, so it is worth taking the time.

What changes for multi-location and enterprise operations

A business operating in several states or provinces can face different rules at each location and for each online customer's location. One national surcharge policy may be legal in one state and prohibited in the next. Larger operations usually keep a location-by-location rules register, configure fees at the terminal or gateway level rather than company-wide, have legal or compliance review every change, and audit receipts and checkout pages regularly. Franchise systems should decide whether fee policy is set centrally or by each franchisee, and document it.