All major card networks, including Visa, Mastercard, American Express, and Discover, prohibit merchants from adding surcharges to debit card transactions, even when the card is processed as credit. This restriction is reinforced by the Durbin Amendment, a federal law that regulates debit card fees.
If you've ever wondered whether it's legal to add a surcharge when someone pays with a debit card, you're not alone. It's a common question, especially for business owners looking for ways to offset card processing fees. The short answer is no, it's not legal to surcharge debit card transactions.
This practice is legal in all but four states — Connecticut, Maine, Massachusetts and Oklahoma. Other states allow surcharging but may limit the amount or mandate that the total price (including the surcharge) must be disclosed before the sale is completed.
State-by-State Legality
As of June 2025 surcharges are prohibited or restricted in the following: California. Connecticut. Maine.
The reason businesses charge a fee for CC transactions is because it isn't factored into the cost of the goods. None of that fee is kept by the business. If businesses ate that cost, it would essentially be as if credit card customers paid 3% less than customers that pay with cash or check.
Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions.
If you believe a merchant is improperly charging customers or otherwise engaging in false or misleading sales practices, you should file a complaint with the Attorney General's Office. The Office uses complaints to learn about misconduct.
Surcharges can incentivize customers to use alternative, less expensive payment methods such as cash or debit cards, which can result in lower overall transaction fees for businesses.
Merchants can impose a surcharge of up to 4 percent as long as it doesn't exceed the cost of the merchant's processing fee. There is no statute on discounts for different payment methods. There is no prohibition for credit card surcharges and no statute on discounts for different payment methods.
California MSPs can recover credit card processing costs, but cannot add a separate surcharge at checkout. Under SB 478, any fee tied to credit card use must be included in the advertised or quoted price from the start. Listing it as a line item or applying it after the subtotal violates state law.
8 Ways to Get the Lowest Credit Card Processing Fees
Convenience fees are designed to cover the costs associated with offering credit card payments as an option. Surcharges aim to offset the costs of processing credit card transaction fees from credit card companies: Visa, Mastercard, Discover, American Express, etc.
Businesses cannot impose any surcharge for using the following methods of payment: consumer credit cards, debit cards or charge cards. similar payment methods that are not card-based (for example, mobile phone-based payment methods) electronic payment services (for example, PayPal)
How to avoid it. You can avoid account inactivity fees by making small monthly purchases with your debit card. Setting up a direct deposit or transfer can also help you avoid the fee.
What is the minimum card payment law? There is no minimum card payment law, which means that there's nothing stopping businesses from setting a minimum spending limit. However, there are rules set out by card networks which state that any merchant accepting their cards cannot set a maximum or minimum limit.
Debit Card Processing & Fees: A 2025 Guide for Small Businesses. The average processing fee for debit card transactions is 34 cents in interchange plus your processor's markup.
No, surcharging for debit card transactions is prohibited under the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Surcharge fees are strictly limited to credit card transactions only. Even if a client wishes to run a signature debit transaction, where a debit card is processed as a credit transaction, you are still not allowed to implement a surcharge. Surcharging is also not permitted with prepaid cards.
You can withhold your service charge payment if: the landlord has not included a summary of your rights and obligations with the demand. the landlord's name and address are not on the demand.
Federal law (the Durbin Amendment) prohibits merchants from surcharging debit cards nationwide. Additionally, Visa, Mastercard, and other card networks prohibit debit surcharges in their merchant agreements, meaning that there is no place in the U.S. where an MSP can lawfully surcharge a debit card payment.
Convenience fees can be up to 3% of the transaction amount, which may seem small but can significantly impact profitability over time. For example, a company processing $1 million annually could face $30,000 in additional fees. Understanding these fees and their impact is crucial for maintaining profitability.
A convenience fee is levied by a merchant for offering customers the privilege of paying with an alternative non-standard payment method. Merchants can process convenience fees in all 50 states.
Yes, please report it. Whether you think it's a scam, you know it is, or you're not happy about a business practice, tell the FTC. The FTC and its law enforcement partners enforce a variety of laws. Your report makes a difference and can help law enforcers spot problems.
If you see an error, submit a dispute right away. Start by calling the card company's customer service number to report the problem. Find the telephone number on your monthly statement or on the back of your card.
The CFPB forwards your complaint to the company and works to get you a response. The bureau also uses complaint data to monitor the market and enforce consumer protection laws.