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.
Q: Are there any states where credit card surcharging is prohibited? Yes, as of the latest updates, credit card surcharging is prohibited in Massachusetts, Connecticut, and Puerto Rico. Merchants must stay informed of changing laws to ensure compliance.
Is Debit Card Surcharging Legal? For debit cards and prepaid cards, surcharging is prohibited—even when the card is run as a signature-based transaction without the PIN. This restriction was implemented by the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
New Jersey law applies to credit cards only. No surcharge on debit cards.
No. The ability to surcharge only applies to credit card purchases, and only under certain conditions. U.S. merchants cannot surcharge debit card or prepaid card purchases.
No, surcharging for debit card transactions is prohibited under the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This applies to all types of debit cards, including prepaid cards.
To report merchants charging excessive payment card surcharges, or surcharging debit and prepaid card transactions, consumers may visit www.visa.com or www.mastercard.com to fill out a Merchant Violation Form.
A surcharge is not a convenience fee. 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. A surcharge is levied by a merchant for customer purchases made with a credit card.
In 2023, Governor Murphy signed P.L. 2023, c. 146 (N.J.S.A. 56:8-156.1 and -156.2) into law, which, among other things, prohibits sellers from imposing a credit card surcharge that is greater than the actual cost to the seller to process the credit card payment.
There is no prohibition for credit card surcharges and no statute on discounts for different payment methods. Merchants can impose a surcharge as long as it doesn't exceed the cost of the merchant's processing fee. Merchants may offer discounts for payment by cash, check or other methods unrelated to credit cards.
Disclosing additional fees before a customer finalizes a transaction is NOT allowed. Businesses cannot advertise a price that is lower than a customer will actually pay (even if they're disclosing that additional fees will be added). Non-compliance can result in a $1,000 fine per violation.
Use a different payment method.
Merchants often charge convenience fees or surcharges when credit cards aren't a standard payment method. If you have a rent, utility or tax bill, consider paying by check or electronic transfer instead.
When you open a checking or savings account with a bank, the bank charges a monthly maintenance fee. This fee is debited from the account at the end of the month. Banks also charge service charges for using the ATM of a competing bank, or when initiating a wire transfer.
Merchant Service Charge (MSC): anywhere from 0.25%–3% depending on card type and card issuer. Interchange fees: 0.2% for debit cards and 0.3% for credit cards. Card-not-present transaction: varies, but will be more expensive than other transactions.
A section of the Dodd-Frank Wall Street Reform and Consumer Protection Act known as the Durbin Amendment requires the Board to establish standards for assessing whether the amount of any interchange fee received by a debit card issuer is reasonable and proportional to the cost incurred by the issuer with respect to the ...
Use cash where you can
The easiest way to avoid card surcharges is to pay by cash.
A service charge, also called a service fee, refers to a fee collected to pay for services that relate to a product or service that is being purchased. In other words, a service charge is an additional charge for the service provided with the purchase of a product or service.
Banks may not charge their customers fees for ACH payments, including online bill pay.
Q: What should I do if I have unauthorized charges on my debit card? A: Contact your bank immediately if you suspect unauthorized transactions on your debit card. If the transaction was made using a debit card or other electronic fund transfers, you may have additional protections under federal law.
The court issues a judgment, which allows the state to collect unpaid surcharges through involuntary means. The judgment amount (surcharge debt) must be paid before personal property can be transferred or sold. Judgments include a collection cost and interest charges calculated on the judgment balance.
Cross-currency mark-up charges on foreign currency transactions. 3.5%# + applicable taxes on foreign currency transaction carried out on Debit. Cards. The exchange rate used will be the VISA/MasterCard wholesale exchange. rate prevailing at the time of transaction/merchant settlement.
Merchants can't impose surcharges on debit cards or prepaid debit transactions per Visa and Mastercard. If merchants add a surcharge, they must decide to add it at the brand or product level — but not both.
In 1985, California passed a law (Civil Code section 1748.1) that prohibited merchants from adding a surcharge (an extra fee) when customers pay by credit card instead of cash.
The chargeback process lets you ask your bank to refund a payment on your debit card when a purchase has gone wrong. You should contact the seller first, as you cannot start a chargeback claim unless you have done this. Then, if you can't resolve the issue, get in touch with your bank.