Starting January 27, 2013 merchants were allowed to add a surcharge to credit card transactions as part of a settlement agreement in an antitrust, class action lawsuit that was filed by retailers against Visa and MasterCard. However, this surcharge is not applicable to debit cards, prepaid cards, or American Express credit cards – American Express still prohibits any surcharges. Before a business can begin surcharging their customers, they must notify Visa and their acquirer (such as Best Card) 30 days prior to implementing the surcharge. Merchants can also submit a notification form to Visa at

According to CNBC, ten states have already banned these Visa and MasterCard surcharges – California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Eleven other states including Hawaii, Illinois, Kentucky, Missouri, New Jersey, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, and Tennessee are currently looking into banning such surcharges as well. Nebraska is not on either list, so, what does this mean for consumers and businesses locally?

How much can the surcharge be?

The amount of the surcharge can range from 1.5 to 4 percent of each transaction – depending on the merchants cost of acceptance. The surcharge amount cannot exceed 4 percent. If you choose, you can choose to surcharge only Visa and MasterCard cards; however, merchants must surcharge Visa and MasterCard on the same terms and conditions as any equal or higher cost competitor that imposes limits on surcharging.

How to tell who’s participating in the surcharge.

Once the surcharge ban was lifted, Visa and MasterCard now requires merchants who pass on this surcharge to post a notice at the merchant’s entrance as well as on the customer’s receipt. As for online businesses, they must post a notice on the check out page where credit cards are first mentioned.

surchargeCould charging a surcharge hurt your business?

Nearly two in three Americans say they would stop using their credit cards if retailers start tacking on extra fees for paying with plastic, according to a new poll.

The scientific survey found that 65 percent of Americans who use credit cards would pay another way if any fee was charged, no matter how small.

But when asked in the survey if they were willing to pay a surcharge in that range — 2 percent — Americans said “no way.” In fact, only 2 percent of Americans would be willing to pay a fee that was capped at 2 percent of the purchase price.

Younger Americans more willing to pay more. The poll indicates that those least likely to flinch at paying a surcharge are those under age 35. In the survey, the younger the respondent, the less willing they were to stop using their card.

Only about half of 18- to 34-year-olds would use a different payment method to avoid a fee (52 percent), compared to 63 percent of those age 35 to 49, and more than 7 in 10 of those older than 50. Also, one in four in the younger group said they would pay up to $1 extra to use plastic, while only 13 percent of those over age 65 were willing.

Still have questions?

If you still have questions regarding the pass through surcharge, please visit or contact us.