VISA recently announced a surprising new change that has caught many businesses and merchant service providers off guard. The announcement applies to merchants who add a fee when a card is used for payment.

According to VISA, effective April 15, 2023 the maximum amount for a credit card surcharge in the USA and the USA Territories will be lowered from 4% to 3%. The maximum amount will now be included in the Visa Rules

So far, the understanding is this ruling only applies to surcharging (which is illegal in NY) and does not apply to dual pricing or true cash discounting.

Over the past 10 years it has become more common for merchants to add a fee when a consumer pays with a card. Since there have not been any clear guidelines on how to implement this, VISA and the card brands have received more consumer complaints.


It’s no secret that business owners have been frustrated with the steadily rising costs associated with accepting card payments. So when surcharging became available in 2013, after merchants won a class action lawsuit against Visa & MasterCard, many businesses began charging a fee for card payments.

Surcharging was illegal in NY until January of 2019 when a long running lawsuit between merchants and NYS was settled.

The ruling stated that merchants may add a fee to a card transaction as long as they are showing a card price and a cash price. If you’ve been paying attention while shopping, you’ve probably noticed that very few businesses are following the proper procedure.

Cash Discounting

Most businesses who add a fee for card payments use a commonly accepted practice known as cash discounting.

When a customer pays with a card, the terminal or point of sale will add a non-cash adjustment which ranges from 3.00% – 3.99%.

The problem with this program is that consumers are not shown two prices. They must calculate an additional percentage to the labeled price. How many people do you know who can quickly add 3.99% to a listed price of $42.56?

This has caused some consumer complaints with VISA and NYS both issuing warning letters. As of today, I have not heard of any businesses being fined.

Does The New Rule Impact Me?

If you are adding a non-cash adjustment as a line item, VISA & NYS may consider this surcharging. Since most non-cash adjustments range from 3.50% – 3.99% it could possible be a double whammy (I am not a lawyer and I am only speculating). My professional advice would be to offer your customers dual pricing.


Dual pricing is simple and lets your customer see both a card price and a cash price.

If you are outside of NYS, and participating in surcharging, you will need to work with your merchant service provider to update your signs and equipment.


Will VISA Enforce This?

VISA has been and will be continuing to utilize secret shoppers. These secret shoppers are visiting businesses and taking pictures of any signs related to additional fees being charged when a card is used.

In my circle of merchant service providers, I have heard stories and seen letters from merchants who have received a warning about non compliant surcharging. It’s unknown at this point if a more aggressive approach will be used.

Businesses have the right to pass along fees to their customers if they choose to do so. To learn more please contact us or talk with your current merchant service provider.

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