Every time a customer taps or inserts a credit card, the business accepting that payment pays a processing fee, typically 2-3% of the transaction. For many small and mid-sized businesses, those fees add up quickly. Credit card surcharging is one way to recover that cost, and Clearo Payments helps businesses across the United States and Canada set it up properly.
What is credit card surcharging?
A surcharge is a small fee added to credit card transactions to cover the cost of accepting the card. The customer who chooses to pay by credit card, and who often earns points, rewards or cashback for doing so, covers the cost of that convenience. Customers who pay with debit, cash or prepaid cards pay no surcharge. Gas stations have used a similar approach for years with separate cash and credit pricing.
What do the card networks require?
Card network rules set clear conditions for surcharging. The surcharge cannot be more than the merchant’s actual cost of accepting credit cards, and in the United States, Visa caps credit card surcharges at 3%. Debit and prepaid cards cannot be surcharged. Visa also requires merchants to notify their acquirer 30 days before they start surcharging, disclose the surcharge at the point of entry and the point of sale, and show the surcharge amount as a separate line on the receipt.
Where is surcharging allowed?
Rules vary by state and province, and surcharging is not permitted in every market. Some jurisdictions restrict or prohibit it, and others set their own limits. Clearo reviews the rules for each merchant’s location and confirms upfront whether surcharging is available.
How Clearo Payments sets it up
Clearo’s Credit Card Surcharging Program handles the details that keep a surcharge compliant and clear for customers:
- Compliance: the surcharge is configured within Visa and Mastercard network rules and capped at the merchant’s actual processing cost.
- Disclosure: Clearo sets up storefront signage, receipt line items and checkout messaging so customers see the fee before they pay.
- Terminal configuration: terminals and payment gateways apply the surcharge automatically to credit card transactions and exclude debit, prepaid and cash payments.
- Ongoing management: if a merchant’s processing costs change, a dedicated Clearo rep adjusts the surcharge percentage to match.
Is surcharging the right fit?
Surcharging tends to work well for professional services, contractors, auto shops, medical offices and B2B companies with high-ticket transactions. It is less common in restaurants and retail, where customers can be more sensitive to visible fees, although some of those businesses use it successfully with clear communication. In some cases, a different pricing structure, such as cost-plus or dual pricing, can achieve a similar result without a line-item surcharge.
“Most business owners don’t realize they can pass credit card processing costs on to the customers who choose to pay by credit card,” said Brendan Scott, spokesperson at Clearo Payments. “The key is setting it up properly: compliant with card network rules, clearly disclosed, and never more than the merchant’s actual cost.”
Getting started
Business owners who want to see whether surcharging makes sense can start with a free statement review from Clearo, which breaks down current processing costs line by line.
Learn more about surcharging: https://clearopayments.com/surcharging/
Request a free statement review: https://clearopayments.com/free-statement-review/
This article is general information only and is not legal, tax or financial advice. Surcharging rules change, so merchants should confirm the current requirements for their location.
Clearo Payments
+1 647 691 9195
4440 PGA Blvd.
Suite 600 #PMB 5005
Palm Beach Gardens
Florida
33410
United States
