Visa’s Credit Card Surcharge Rules in the U.S.

Businesses Can Charge Customers for Paying with a Visa Credit Cards

However, Only Under Certain Conditions

When businesses accept credit cards, they pay processing fees that cut into their profits. To cover the added costs of accepting a credit cards, some businesses may add a extra fee to purchases made with cards, called a “surcharge.” To ensure that U.S. businesses do not abuse the addition of card surcharges to their sales, Visa imposes specific policies that they must follow, or face potentially serious consequences. These rules are meant protect customers and to maintain a positive perception of Visa card usage. In this article, we’ll explain Visa’s rules for adding extra fees to credit card purchases in the United States.

Credit Card Surcharge Rules in the U.S. (Visa-Specific)

1. Notification Requirements
   • Merchants must notify their acquirer (payment processor) at least 30 calendar days in advance before they begin assessing a surcharge.
2. Surcharge Disclosure Rules
   • The surcharge must be clearly disclosed to the cardholder before completing the transaction.
   • For e-commerce, mail, phone, and unattended transactions, the cardholder must be allowed to cancel the transaction after seeing the surcharge.
   • The surcharge must appear separately on the receipt.
3. Surcharge Limits
   • The surcharge must not exceed the merchant’s cost of acceptance for the card and cannot be more than 3% of the transaction amount.
   • Surcharges cannot be applied to debit or prepaid card transactions, even if the card is run as “credit”.
4. Fair Treatment Across Card Brands
   • If a merchant accepts multiple card brands (e.g., Visa, Mastercard), they cannot impose a surcharge on Visa cards unless they also surcharge other brands under the same conditions.
   • If a competing card brand prohibits surcharges, Visa transactions must also be surcharge-free.
5. Signage and Disclosure at Point-of-Sale
   • For in-person transactions, merchants must display clear signage about the surcharge at the entrance and checkout.
   • For e-commerce transactions, the surcharge must be clearly disclosed on the checkout page.
6. Restrictions on Third-Party Surcharges
   • Only the merchant providing the goods or services can apply a surcharge.
   • Third parties cannot impose a surcharge on Visa credit card transactions.

Visa’s Penalties for Improper Surcharging

Visa imposes strict penalties for merchants who violate its surcharging rules. If a merchant or its acquiring bank fails to comply with Visa’s surcharge policies, the penalties can include the following:

• Non-Compliance Assessments
  • Visa can impose a non-compliance assessment on an acquirer if a merchant improperly applies a surcharge.
  • These assessments may be levied per transaction or per merchant, depending on the severity of the violation.
• Violation Triggers for Compliance Action
  • A Visa member (such as an issuing bank or acquiring bank) may file for compliance enforcement if a merchant:
    • Charges a surcharge amount that exceeds the allowed limit.
    • Applies a surcharge to transactions where it is not permitted.
    • Fails to properly disclose the surcharge before the transaction is completed.
    • Does not include the surcharge amount on the transaction receipt.
    • Applies a surcharge alongside a service fee, which is not allowed.
• Escalating Penalties
  • Visa typically issues a warning letter for an initial violation.
  • If the issue is not corrected, financial penalties begin at $25,000.
  • Continued non-compliance leads to increasing fines, escalating to $50,000, $100,000, or even $250,000, depending on how long the violation persists.
  • If a merchant repeatedly violates the rules, Visa may disqualify the merchant from accepting Visa cards.
• Merchant and Acquirer Liability
  • The acquiring bank is ultimately responsible for ensuring its merchants comply with Visa’s surcharging rules.
  • Visa may impose penalties directly on both the merchant and the acquiring bank for repeated or serious violations.

Report Improper Surcharging of Visa Payment Methods

If you suspect that you were improperly charged for using your Visa credit or debit card, here’s how to report it to Visa:

1. Be sure to keep you receipt or any documentation of the transaction and surcharge fees.
2. If there is a lack of proper disclosure, take photos or videos of the location of the merchandise, the register or point-of-sale area where you paid, and the entrance of the business.
3. Call the customer support number for your card and report it to a support agent.
4. Report it directly to Visa via the Report a Purchase Issue Form.
5. Consider posting reviews online to warn other consumers of the improper fees.

Bottom Line

Businesses that want to offset credit card processing costs without facing penalties must comply with Visa’s surcharging rules. While surcharges can help business owners offset the cost of processing fees, improper implementation can lead to hefty fines, compliance issues, and even the loss of the ability to accept Visa payments. Before you report a business, be sure to understand what Visa’s rules allow.