Understanding Surcharge Rules
and Compliance

State Credit Card Surcharge Laws Explained

With clients preferring credit card payment options over cash and debit, credit card surcharges have become an attractive model for legal professionals to offset credit card processing fees at their firms. However, state payment processing laws vary and require considerable research before implementing payment processing solutions in your practice. In this article, we’ll explain everything regarding merchant services, including which states allow payment services surcharges (and which do not), how to implement point of sale systems, and the regulations that must be followed. Attorneys should also check with their local bar association for the most updated information on online payment processing and ACH payments ethics.

What Is a Credit Card Surcharge?

Each time a merchant accepts a credit card transaction, they pay a processing fee to the financial institution. A credit card surcharge is a fee enforced by the merchant to compensate for credit card processing costs. This fee applies only to credit cards—never debit, even if run through point of sale systems as credit. Surcharges are predominantly percentage-based. For example, a dentist’s office with retail POS systems for in-person payments might charge a $1.95 convenience fee for phone orders. However, a surcharge on online payment processing or in-store POS systems looks different: when patients choose credit, their bill reflects a 2% fee for payment services. The patient is notified of this at the point of sale, and the fee is calculated from the total. These payment processing solutions help firms manage merchant services overhead. Using integrated payment processing services guarantees your online merchant services and ACH payments remain compliant with all current 2026 regulations.

Are Credit Card Surcharges Legal?

If you’re wondering if charging fees is legal, the answer is yes in most states for credit card processing. Surcharging was largely outlawed for decades until a 2013 lawsuit permitted merchant services in several states to implement fees. This sparked a chain reaction as more states adopted a pro-surcharging stance for their retail POS systems. Proponents argue that anti-surcharge laws for online payment processing drive up prices across the board and may even violate the First Amendment. Modern payment processing solutions now allow businesses to manage these costs through integrated POS systems. Regardless of if using point of sale hardware or online merchant services, firms now utilize payment services to offset overhead. By adopting robust payment processing strategies, including ACH payments, companies maintain margins via advanced payment processing services. These shifts make sure that point of sale systems remain both compliant and profitable for businesses nationwide.

Credit Card Surcharge Laws by State

The legal landscape of credit card processing fluctuates, but as of February 2026, surcharging is legal in most states. However, there are nuances to be aware of when choosing payment processing solutions. In some of the states below, there may be certain restrictions on merchant services (based on state attorney general guidance or bar rules)—and in others on the list, anti-surcharging laws still exist but aren’t necessarily enforceable for point of sale systems because of recent court decisions. For instance, retail POS systems in New York must now display the total credit price upfront. While ACH payments and online merchant services remain flexible, your point of sale must align with these evolving payment services standards. Ensuring your POS systems and online payment processing tools follow these payment processing services guidelines is vital for maintaining compliance in a shifting regulatory environment.

California
Georgia
Indiana
Iowa
Michigan
Ohio
Oklahoma
Pennsylvania
Texas

Note:Surcharges are governed by state law and card brand rules, like those from Visa and Mastercard, which frequently change. Attorneys must also follow ethics rules and should consult local bar associations for updated information. The following list, current as of February 2026, provides legal professionals with data on credit card surcharges based on state law. Use these payment processing solutions alongside robust merchant services to ensure your POS systems remain compliant.

States Where Credit Card Surcharges Are Legal

States A-L	States M-O	States P-Z
Alabama	Maryland	Pennsylvania
Alaska	Michigan	Rhode Island
Arizona	Minnesota	South Carolina
Arkansas	Mississippi	South Dakota
California	Missouri	Tennessee
Colorado	Montana	Texas
DC	Nebraska	Utah
Delaware	Nevada	Vermont
Florida	New Hampshire	Virginia
Georgia	New Jersey	Washington
Hawaii	New Mexico	West Virginia
Idaho	North Carolina	Wisconsin
Illinois	North Dakota	Wyoming
Indiana	Ohio
Iowa	Oklahoma
Kansas	Oregon
Kentucky
Louisiana

States Where Credit Card Surcharges Are Illegal

Currently, credit card surcharging is illegal in the following states and territories:

Connecticut
Maine
Massachusetts
New York (as currently interpreted)
Puerto Rico

As of February 11, 2024, it is illegal for New York merchants to separately list the pre-surcharge subtotal or even the separate line item surcharge amount. As mentioned below, listing the surcharge as a line item is required to comply with card brand rules. This means that, as of the time of writing, New York conflates “surcharging” with what is generally understood by the payments industry to be a cash discount model, while effectively banning “surcharging” as that term is understood by the industry and card brands. Local governments are authorized to enforce the law while keeping the proceeds, and each violation carries a fine of up to $500. This article provides detailed analysis regarding the specific payment processing restrictions and open questions arising from the new law in New York. Modern retail POS systems must now display the total price upfront to verify compliance with these payment services. By utilizing advanced payment processing solutions, businesses can navigate these merchant services regulations while managing their credit card processing costs effectively.

Credit Card Surcharging Rules

Major credit card institutions, like Visa and Mastercard, establish specific rules for merchants implementing surcharges. While variations exist between brands, general guidelines remain universal. Below, we break down common rules for legal professionals executing surcharges at their firm. We also explain how Merchant Processing Solutions helps your firm comply through advanced payment processing solutions and POS systems, allowing you to focus on practicing law. Our credit card processing and online payment processing tools make sure your retail POS systems stay updated.

Notify the Credit Card Institution

You must provide written notice to major card brands regarding your intent to surcharge. This involves sending a formal letter to your account representative or submitting documentation via the networks' official websites. When you utilize high-quality merchant services for credit card processing, such as those from Merchant Processing Solutions, dedicated support teams can manage this notification on your behalf. This streamlined approach to payment processing solutions simplifies the initial setup, guaranteeing your point of sale systems are compliant from day one.

Notify Your Clients

Clients must be informed of your intent to surcharge through clear, transparent communication rather than hidden fine print. You can achieve this by itemizing fees on invoices or displaying signage at your point of sale. If you utilize online payment processing, this disclosure should appear automatically on your checkout page. Since credit card processing costs are passed to the consumer, effective messaging is vital for a positive experience. Modern merchant services and payment processing solutions automate this disclosure across all retail POS systems, ensuring your point of sale systems remain compliant while providing seamless payment services.

Do Not Surcharge More Than the Cost of Your Processing Fee

This rule stipulates that you cannot use surcharging for profit. Generally, surcharges cannot exceed 3% in the U.S. In Colorado, merchants may either surcharge a maximum of 2% or charge the actual cost for credit card processing. Because costs vary by transaction, most merchant services in Colorado cap surcharge at 2%. To make sure of compliance, businesses utilize payment processing solutions and POS systems. Modern retail POS systems help manage these payment services while keeping your point of sale compliant with Colorado laws.

Do Not Implement Surcharges on Debit Card Transactions

Surcharge fees are strictly limited to credit card processing only. Even if a client runs a signature debit transaction at your point of sale, you cannot implement a surcharge. These rules also apply to prepaid cards and ACH payments. Using compliant payment processing solutions ensures your POS systems and merchant services follow all regulations.

Stay PCI Compliant

PCI compliance is a vital rule for any firm using credit card processing. To protect data, you must follow PCI DSS security standards. Our merchant services help you maintain a secure environment across all retail POS systems and online payment processing platforms. Merchant Processing Solutions simplifies the annual questionnaire, making sure your payment processing solutions meet the highest security levels. By utilizing our expertise in payment services and point of sale systems, your firm remains compliant. We provide tools to secure ACH payments and online merchant services.

Simplify Surcharge Implementation and Compliance with a Legal Payment Processor

Surcharge compliance is complex, but legal payment processors alleviate the burden by making sure your firm follows card brand rules. At Merchant Processing Solutions, we offer ethical credit card processing for law firms. Regardless of if using retail POS systems or online payment processing, we provide flexible payment services that adhere to surcharge laws. Our payment processing solutions auto-detect debit cards to prevent illegal fees. By integrating merchant services with online merchant services and ACH payments, we guarantee compliant billing across all POS systems and point of sale systems.

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