When Can I Charge My Customers for Accepting Their Credit Card Payment?

When Can I Charge My Customers for Accepting Their Credit Card Payment?

Advancements in mobile and card technology have led to widespread consumer acceptance of card payments. In fact, recent surveys show that only 11% of buyers prefer cash, while the rest prefer to use a debit card or a credit card.

While card payments give your business an important layer of protection to safeguard your transaction activity and streamline your business operations, they also lead to additional costs in the form of card assessment and interchange fees — also known as “swipe fees.” In most cases, total fees end up amounting to 2-3% of transaction totals, but costs vary depending on your specific card processor or merchant account agreement.

Fortunately, recent lawsuits and congressional actions have changed the rules to guarantee your right to pass those costs on to your customers, if you so choose. Here’s what you need to know.

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When Charges Can Be Passed to Consumers

Legally, the only real prohibition when charging customers for using a card is a ban on adding surcharges on debit transactions. In every other case, the sticking point is usually your card processing agreement or the rules of the major issuers like MasterCard and Visa, which restrict surcharge activities.

Currently, you’re able to assess a surcharge of up to 4% to your consumers, equal to the amount you paid to process their payment. To determine your costs accurately, it’s best to work with a processing partner who provides interchange pass through pricing, also known as interchange plus pricing. Along with offering the lowest costs to merchants, pass through pricing provides the most transparency for each transaction. This lets you accurately assess your expenses for accepting cards to determine what amount you can pass on to your customers.

Otherwise, additional restrictions on charging customers for card payments are determined by local laws. Today, 10 states outlaw surcharges  on credit card transactions: New York, California, Texas, Florida, Massachusetts, Connecticut, Colorado, Maine, Kansas and Oklahoma. (The California and New York laws are facing challenges in court.)

Balancing Costs With Convenience and Security

While accepting card payments does add another cost to your business, the benefits are usually worth it. Along with improving the speed and accuracy of your transaction activities, card payments are something consumers have grown used to, and they may find it off-putting when a business only operates with cash.

To absorb the cost, you can adjust your pricing to reflect the added credit card surcharge. And, there are also merchant processors that can help you pass the cost of credit card swipe fees to your customers. The cost is simply added as a line item to their receipt. This may be a viable option if you could not otherwise afford to accept credit cards, or if your customers wouldn’t mind absorbing those costs for the convenience of paying by plastic.


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As long as you choose a payment partner who offers transparent pricing, you shouldn’t experience any difficulties if you decide to pass your costs on to customers while maintaining the convenience and security of accepting credit and debit cards.

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