Fee Overview

Allows government and education MCCs to charge a Convenience or Service Fee.

Mastercard and American Express refer to it as a convenience fee.

Visa refers to it as a service fee.

Fees charged for non-face-to-face, card-not-present (CNP) transactions only when the card payment is a true convenience for the customer.

Programs that allow a merchant to add a surcharge fee to the cost of a purchase when a customer uses a credit card for payment. Surcharging is only allowed in certain situations and in certain states.

Fee Type

Fixed amount or percent

Fixed flat amount

Fixed or percent

Maximum Fee Amounts — Specified in Rules?

No

No

Lower of (a) cost of acceptance (interchange, network fees, and acquirer processing fees may be considered; POS terminal rental and unrelated costs should not be included), or (b) the applicable brand cap — Visa 3% (effective April 15, 2023; reduced from 4%) and Mastercard 4%. A merchant that accepts both Visa and Mastercard is effectively capped at 3%. Certain states cap lower (e.g., Colorado 2%, Oklahoma 2%, and Nevada 1.5%).

Payment Networks Supporting These Fees

Visa, Mastercard, American Express

Visa, Mastercard, American Express, Discover

Visa, Mastercard, Discover.

American Express does not impose a flat surcharge ban; its equal-treatment (non-discrimination) rules require that Amex be surcharged on terms no less favorable than competing brands across all “Other Payment Products,” which include debit and prepaid. Because debit/prepaid may not be surcharged under Visa/Mastercard rules, compliant Amex surcharging is effectively unworkable in most scenarios.

Registration Required

No

No

Advance notice required: notify Forte at least 60 days before surcharging.

Payment Type

All

Card-not-present transactions only

Credit only. Card present and card not present.

Detailed Description

Visa Service Fee  Visa allows government agencies, utility merchants, education merchants, or their third party to assess cardholder fees on approved transaction types. The fee can be charged as a fixed amount or as a percentage. To participate, merchants must: clearly disclose fees to the Visa cardholder and meet cardholder fee requirements; accept Visa in all channels where payments are accepted (face-to-face, mail, telephone, Internet); and feature the opportunity to pay with Visa at least as prominently as all other payment methods.

Mastercard Convenience Fee  Charged as a flat fee or percentage; variable or tiered; assessed in all channels (face-to-face, online, mail, phone, kiosk); and assessed for recurring payment transactions (e.g., installment payments and taxes). Mastercard cardholders cannot be assessed a convenience fee that discriminates against Mastercard (or is higher) relative to other brands such as American Express, Discover, and Visa. Under the Mastercard Convenience Fee Program, fees are limited to specified payment types: tuition and school-sponsored room and board (elementary schools, secondary schools, colleges, universities, and professional schools); government and court fees, costs, and fines (including alimony and child support); and local, state, and federal taxes. 

American Express Convenience Fee  For government, utilities, and education MCCs; charged as a flat fee or percentage. Fees may be assessed on all utility and government transactions. American Express does not maintain a separate education-specific or “mandatory expense” scope; instead, the fee must meet the definition of a convenience fee (a charge for a bona fide convenience, not a surcharge on card acceptance), be assessed on a non-discriminatory basis, and be disclosed to the Card Member before the transaction is completed with an opportunity to cancel. The Amex fee cannot be higher than fees charged for other brands.

Discover — N/A  However, Discover’s general policy states that merchants may not adopt payment practices that disadvantage the use of Discover compared to other brands such as Visa, Mastercard, and American Express.

A fixed-amount fee charged for a true convenience, for non-face-to-face, CNP transactions in an alternative channel to the merchant’s customary payment channel. That is, the fee is not charged solely for accepting a card payment. The fee is included as part of the total amount of the transaction. Mail/phone-order and e-commerce merchants that only use CNP channels may not impose a convenience fee when a customer pays with a card. A merchant may not charge the fee as a percentage of the transaction amount.

Visa  A convenience fee must not be charged by any third party or added to a recurring transaction. Merchants that charge a convenience fee must ensure it is: clearly disclosed to the cardholder as a charge for the alternative-channel convenience; disclosed before completion of the transaction, with the opportunity to cancel; and applicable to all forms of payment accepted in the channel.

Percentage-based or fixed surcharge fee for accepting credit card payments.

Visa  A charge assessed by the merchant to the consumer for the credit card payment service itself.

Mastercard  Any fee charged in connection with a credit card transaction that is not charged if another non-card payment method is used.

Visa and Mastercard  A merchant that assesses a surcharge on a Visa credit card transaction must not charge a convenience fee in addition to the surcharge.

Discover  Permits credit card surcharging subject to its network rules. A Discover surcharge may not exceed the cost of acceptance for the credit card sale. Debit and prepaid cards may never be surcharged (see General, below).

General  Surcharging requires specific functionality, including the ability to distinguish credit cards from debit and prepaid cards, and to provide necessary disclosures at the point of entry (entrance/website signage), point of sale, and a separate line item on every receipt. Inappropriate surcharge can lead to significant financial penalties.

*Surcharging applies to credit card payments only. Merchants are not required to accept credit cards and must offer debit and ACH payment options with no additional fee.

Examples

A college charges a 3% fee for paying tuition with a credit or debit card.

A city charges a 2% fee for paying taxes with a credit or debit card.

A cable company charges a $5 fee for paying an internet bill online with a card or via ACH when the dominant payment method is by mail and an in-person, card-present option also exists.

The DMV’s primary method of payment is by mail; payments can also be made in person. The DMV website charges $3 for online registration renewals.

A merchant charges a 2% surcharge for payments with a credit card. (Debit/ACH/check payments do not have a fee.)

Rules & Legal Restrictions

Visa, Mastercard, and American Express determine the rules and restrictions for these programs. Discover does not have a specific program for government, utility, and education transaction fees.

Each of the payment networks (Visa, Mastercard, Discover, and American Express) has its own set of rules and regulations. We recommend merchants review applicable card-brand convenience rules for additional details.

Visa, Mastercard, and Discover determine the applicable rules, but there may be limitations by state. American Express does not impose a flat surcharge ban but applies equal-treatment (non-discrimination) rules that make compliant Amex surcharging effectively unworkable in most scenarios.

A merchant that wishes to surcharge while continuing to accept American Express may consider becoming a Visa/Mastercard Limited Acceptance (VISA registration required) merchant that accepts only credit cards, which keeps the program within all applicable brand rules.

 U.S. merchants cannot surcharge debit or prepaid card purchases. U.S. merchants cannot assess a surcharge on credit card purchases that exceeds the merchant discount rate for the applicable credit card surcharged, or the applicable brand cap (Visa 3% / Mastercard 4%), whichever is lower.

State landscape (changes frequently):  

Connecticut, Massachusetts, Maine (private entities only), and Puerto Rico prohibit surcharging. California effectively bars separate line-item surcharges via SB 478 (the “Honest Pricing Law,” effective July 1, 2024). Texas has a statutory ban that federal courts have found unconstitutional, so enforcement is uncertain — consult counsel. 

New York permits surcharging only if the total credit-card-inclusive price is posted (NY Gen. Bus. Law § 518). 

Colorado caps surcharges at 2%. 

Nevada — the Attorney General advises consumers to ask merchants for policy documentation if they are charged a surcharge higher than 1.5%. 

Oklahoma — the surcharge may not exceed the lesser of (1) two percent of the total transaction amount or (2) the actual cost charged to the seller to process the credit card transaction. 

Minnesota’s Price Transparency Law requires businesses to include all mandatory fees or surcharges in the advertised, displayed, or offered price for goods or services.

We recommend merchants review applicable card-brand surcharging requirements and consult their legal counsel on state-by-state surcharging laws.

Merchant Type

Select government MCCs: 9222. Higher-education MCCs: 8220, 8211, 8244, 8249.

Network pilot MCCs:  4900 (Utilities – Electric, Gas, Water, Sanitary); 8211 (Elementary and Secondary Schools); 8220 (Colleges, Universities, Professional Schools, and Junior Colleges); 8244 (Business and Secretarial Schools); 8249 (Vocational and Trade Schools); 9211 (Court Costs, Including Alimony and Child Support); 9222 (Fines); 9311 (Tax Payments); 9399 (Government Services [Not Elsewhere Classified]).

All

All

Merchant Payment Channels

All channels

Alternate (card-not-present) channel. The alternate channel cannot process the majority of payments. Merchant must have a card-present channel.

All channels

Number of Transactions

One — payment and service fee

One — payment and convenience fee

One — surcharge amount shown on the receipt

Recurring Transactions OK?

Yes

No

Yes

• Debit and prepaid cards may never be surcharged — even when run as “credit” or routed over credit-card network rails.
• The surcharge may not exceed the lower of: (a) the merchant’s credit-card cost of acceptance / applicable merchant discount rate, or (b) the applicable brand cap (Visa 3%; Mastercard 4%; Canada 2.4%). Where both Visa and Mastercard are accepted, the practical cap is often 3%.
• A surcharge may be assessed at the brand/network level or the product/card level, but the merchant should not mix both approaches for the same program. The amount must be applied equitably to competing credit-card brands and products, subject to each brand’s cost-of-acceptance cap. Choose brand/network or product/card level and apply it consistently and equitably.
• Do not combine a surcharge with a convenience fee or cash discount for the same transaction. Choose one pricing construct and document the rationale. A merchant may use either a surcharge or a cash discount, not both, and cannot post a cash price and charge a higher card price without a compliant disclosure / all-in pricing review.
• The surcharge must be clearly disclosed before completion of the transaction, must be separately identified on the receipt, and must include the exact amount or percentage; that it is imposed by the merchant; that it applies only to credit transactions; and that it does not exceed the applicable merchant discount rate.
• Consumers should have a meaningful opportunity to cancel, opt out, or pay by another available method before the surcharge is added.
• Flat surcharges are operationally risky because the flat amount can exceed the cost-of-acceptance/cap on low-dollar transactions. Use controls or minimum transaction thresholds if a flat fee is supported.
• For refunds, return the full surcharge on a full return and a proportional amount of the original surcharge on a partial return.
• State and local law can be more restrictive than network rules. Confirm the law in every jurisdiction where the merchant advertises, displays, or offers prices.

The card-brand convenience-fee and surcharge rules in this sheet govern card transactions only. Fees on ACH/eCheck payments are governed by the Nacha Operating Rules and applicable state and federal law (including Regulation E considerations), not by the card networks. Apply the framework that matches the rail being used.