Passing on credit card fees to customers can be a smart move for businesses looking to reduce operating costs, but doing it without disrupting customer trust or violating payment network requirements is key. Whether you’re a small business or an enterprise, applying a surcharge requires thoughtful implementation—and strict alignment with PCI standards and card brand rules.
This guide will help you understand how to introduce a surcharge while maintaining compliance and a seamless customer experience.
Why Businesses Are Turning to Surcharges
Credit card processing fees continue to rise, cutting into margins across industries. According to the Nilson Report, U.S. merchants paid more than $160 billion in card processing fees in 2022 alone. These costs are especially painful for businesses with high transaction volumes or tight profit margins.
Surcharging—adding a percentage-based fee to credit card payments—offers a way to recover those costs. However, it must be done with attention to card network regulations and PCI compliance frameworks.
PCI Compliance: What It Means in the Context of Surcharging
PCI (Payment Card Industry) compliance refers to a set of security standards that businesses must follow when handling cardholder data. When implementing surcharges, it’s critical that:
- Sensitive payment data remains secure during surcharge calculation and processing
- Customer disclosures are clear and follow brand guidelines
- Systems used to manage surcharges are PCI DSS compliant
- Transaction records and receipts reflect the surcharge transparently
Key Steps to Implement a PCI-Compliant Surcharge Strategy
- Understand Your Regional and Network Guidelines
Each card brand (Visa, Mastercard, etc.) provides specific rules around how surcharges can be applied, including fee caps, notice periods, and signage requirements. Additionally, some U.S. states have unique restrictions that you must observe. - Use PCI-Compliant Surcharge Software
Avoid manual calculations or fragmented systems. Choose a payment gateway or surcharge platform that is fully PCI DSS compliant and supports:
- Real-time surcharge calculation
- Encrypted data handling
- Itemized receipts and reporting
- Configuration by card type or location
- Real-time surcharge calculation
- Disclose Fees Clearly at Checkout
Inform your customers before the transaction is completed. This isn’t just a best practice—it’s a requirement under most card network policies. Digital or in-store disclosures must be visible and easy to understand. - Apply Surcharges Only to Credit Cards
Debit cards are typically excluded from surcharge programs. Attempting to include them may result in non-compliance with network standards.
Notify the Card Brands (If Required)
Some card networks require that you submit a written notice 30 days before implementing surcharges. The right software will help manage this step for you
Surcharge Strategy: Small Business vs. Enterprise
- Small businesses benefit from plug-and-play surcharge tools that automate compliance and don’t require IT teams.
- Enterprises often need advanced APIs, multiple integrations, and audit-ready reporting for finance and compliance teams.
Either way, the priority should be maintaining control and transparency—without introducing unnecessary friction for the customer.
FAQs: What Businesses Ask About Surcharging and Compliance
Q: Can I apply surcharges in all U.S. states?
A: Not all. Some states have restrictions or require specific language. Your surcharge software should adapt automatically to local guidelines.
Q: What happens if I don’t follow the network rules?
A: You may face penalties, chargebacks, or service disruptions. A PCI-aligned platform protects you from these risks.
Q: How much can I charge as a surcharge?
A: Typically, up to 3%, depending on the card brand. Always review current card network guidelines before implementation.
Ready to Add a Surcharge Without Risk?
At VANX Software Solutions, we help businesses implement surcharge strategies that are compliant, customer-friendly, and easy to scale. Whether you’re just getting started or need a custom integration, our platform ensures you meet industry standards while maximizing your revenue retention.Schedule a free demo today and see how you can start recovering credit card fees—without compromising security or customer trust.
