Last reviewed: April 22, 2026. This article provides a general overview of the surcharging landscape heading into mid-2026. Because rules vary by region and change frequently, merchants should confirm requirements with legal counsel or their acquirer before implementing or modifying a surcharge program.
Surcharging is the practice of adding a fee to a credit card transaction to help offset the cost of processing. Whether a merchant can apply a surcharge, and how it must be done, depends on both card network rules and local legal requirements.
What's New in 2026
Several developments since the last update to this guide are worth flagging for partners:
Visa/Mastercard interchange settlement (U.S.) — pending court approval. Under the proposed settlement announced in 2025, Visa and Mastercard would, within 90 days of final approval, allow U.S. merchants to surcharge credit card transactions at either the brand level (e.g., all Visa credit) or the product level (e.g., a specific Visa consumer rewards product) — but not both for the same network. The settlement would also cap posted U.S. credit interchange rates for five years and cap rates on standard Visa Traditional/Traditional Rewards and Mastercard Core/Enhanced Value credit cards at 1.25% for eight years. Final approval is expected in late 2026 or early 2027.
Australia — surcharging ban effective October 1, 2026. The Reserve Bank of Australia will prohibit surcharges on eftpos, Visa, and Mastercard consumer and commercial card payments starting October 1, 2026. The consumer credit card interchange cap also drops from 0.80% to 0.30%, aligning with the UK and EU. Merchants operating in Australia should plan now to remove surcharge programs before that date.
Visa rule refresh (October 2025). Visa's most recent Core Rules update (published October 18, 2025) keeps the U.S. brand-level surcharge cap at 3% and maintains the 30-day acquirer-notification requirement. Product-level surcharging remains available, subject to network and state limits.
Visa Level 2 interchange programs sunset (April 2026). As part of ongoing changes to Visa's Card Eligibility Determination Program (CEDP), Level 2 interchange programs are being retired in April 2026. This does not change surcharge caps directly but may affect the economics behind a merchant's cost-of-acceptance calculation.
U.S. state activity continues. State-level changes over the last year (notably Minnesota, California, and New York) are reflected in Section 4 below.
1. Surcharging Is Only Allowed on Credit Cards
Merchants may only apply surcharges to credit card transactions. Debit and prepaid card transactions cannot be surcharged under card network rules, regardless of how the card is routed (signature or PIN).
2. Surcharge Amount Limits
Card network rules cap how much a merchant may surcharge. Current U.S. caps:
Visa: lesser of the merchant's cost of acceptance or 3% (brand-level); product-level surcharging is also permitted up to the same cap.
Mastercard: lesser of the merchant's average effective merchant discount rate or 4% (the Maximum Surcharge Cap).
American Express & Discover: surcharging is permitted, but merchants cannot surcharge these brands at a higher rate than Visa/Mastercard.
Outside the U.S., caps differ by market. Examples:
Canada: maximum surcharge of 2.4%, and surcharges are prohibited in Quebec under provincial consumer protection law.
Australia: surcharging permitted today but banned effective October 1, 2026.
UK & EU: surcharging on most consumer credit/debit cards is prohibited under the Payment Services Directive / Payment Services Regulations.
In all cases, the surcharge must not exceed the merchant's actual cost of acceptance.
3. Clear Disclosure Required
Merchants must clearly disclose any surcharge to customers:
Disclosure must occur before the transaction is completed, at the point of entry (e.g., storefront, website landing page) and again at the point of sale.
The surcharge must appear as a separate line item on the transaction receipt.
If surcharging at the product level, signage and digital disclosures must make clear which specific card products are surcharged.
Under the proposed Visa/Mastercard settlement, merchants must provide at least 30 days' written notice to their acquirer before beginning to surcharge, including the merchant's name and address, whether the surcharge is at the brand or product level, the surcharge amount, and any payment facilitator, processor, or third party involved.
4. Local Laws & State-by-State Rules (U.S.)
In addition to card network rules, state laws may prohibit, limit, or impose additional disclosure requirements on surcharging. The list below reflects notable positions as of April 2026 — always confirm with counsel.
States where surcharging is effectively prohibited:
Connecticut — surcharges banned; cash discounts permitted. Violations up to $500 each.
Massachusetts — surcharges prohibited by statute.
Maine — surcharges by private merchants prohibited; government entities may surcharge for certain payments.
Puerto Rico — surcharges prohibited.
States with notable rules or recent changes:
California — the anti-surcharge statute was held unconstitutional as applied to truthful disclosure, so surcharging is effectively permitted; however, California's 2024 "junk fee" law (SB 478) requires mandatory fees to be included in the advertised price. As a result, separate credit-card line-item surcharges are restricted, but dual pricing (posting both a cash and card price) and all-in pricing remain allowed. Restaurants are subject to narrower rules.
Colorado — surcharges capped at 2% (or the merchant's processing cost, whichever is lower); on-premises and online signage required.
Minnesota — as of January 1, 2025, surcharging is legal if the fee is avoidable (e.g., by paying cash). All other mandatory fees must be baked into advertised prices, and the surcharge must be disclosed at the point of sale with conspicuous on-premises signage.
New York — under General Business Law § 518 (effective Feb. 11, 2024), merchants must clearly and conspicuously post the total price including the surcharge before checkout. The surcharge cannot exceed the merchant's cost of acceptance. Penalties up to $500 per violation.
Florida, Kansas, Oklahoma, Texas, Utah — statutory surcharge bans have been struck down or enjoined on First Amendment grounds; surcharging is effectively permitted with proper disclosure, but compliance risk remains — confirm with counsel.
All other U.S. states currently permit surcharging subject to network rules and general disclosure requirements.
5. International Rules at a Glance
Canada — permitted outside Quebec, max 2.4%, 30-day notice to acquirer and card networks, clear disclosure at point of sale and on receipts.
Australia — permitted through September 30, 2026; banned from October 1, 2026 on eftpos, Visa, and Mastercard transactions.
United Kingdom & European Economic Area — surcharging prohibited on most consumer card payments under PSD2 / UK PSRs. Commercial cards and non-EEA-issued cards may be surchargeable subject to local rules.
Other markets — rules vary significantly; merchants should consult their acquirer for market-specific requirements.
6. Federal & Regulatory Landscape (U.S.)
There is no federal statute directly governing surcharging, and the CFPB has not issued surcharging-specific rules. However, the broader regulatory focus on "junk fees" continues to shape disclosure expectations:
The CFPB's ongoing junk-fee initiative, state "all-in pricing" laws (California SB 478, Minnesota), and FTC unfair-practice enforcement have all reinforced the requirement that mandatory fees be disclosed up front, not added at checkout.
Litigation activity — including First Amendment challenges to state surcharge bans — continues in multiple jurisdictions. Merchants should monitor updates in states where the anti-surcharge statute has been enjoined but not repealed.
7. Business Considerations
Before implementing or expanding a surcharge program, merchants should consider:
Customer perception — surcharges can impact customer experience, particularly in competitive retail categories.
Fee transparency — how and where the surcharge will be disclosed, and whether dual pricing or all-in pricing would better fit the jurisdiction.
Alternative options, such as cash discounts, where permitted and compliant.
Operational readiness — 30-day network notifications, POS configuration, receipt formatting, and signage refreshes should be planned in advance.
Summary
To surcharge credit card transactions in 2026:
Only apply to eligible credit card transactions.
Stay within network caps (Visa 3% / Mastercard 4%) and the merchant's actual cost of acceptance, whichever is lower.
Provide clear and prominent disclosure at the point of entry, point of sale, and on the receipt.
Comply with applicable state and local laws, and monitor pending changes such as the Visa/Mastercard interchange settlement and Australia's October 2026 ban.
Provide 30 days' advance written notice to your acquirer before starting, changing, or stopping a surcharge program.
Because rules vary by region and change over time, merchants should consult legal counsel or their acquirer before implementing a surcharge program.
Change log — April 22, 2026: Added "What's New in 2026" section; expanded network caps to call out Visa (3%), Mastercard (4%), and Amex/Discover parity; added Visa/Mastercard interchange settlement (brand/product-level surcharging); added Australia's October 1, 2026 ban and RBA interchange cap reduction; expanded U.S. state guidance to reflect Minnesota (effective Jan 1, 2025), California SB 478, New York GBL § 518, and Colorado's 2% cap; added international (UK/EU) and federal/regulatory landscape sections.