Offset your credit card processing costs by passing a small, capped fee through to customers who choose to pay with a credit card. Debit cards are never surcharged — federal law (the Durbin Amendment) prohibits it — and KAJA handles card brand registration, real-time BIN detection, and customer disclosure so you stay compliant with Visa, Mastercard, Discover, and American Express rules from day one.
A surcharge is a small fee — capped by Visa at 3% of the transaction, and never more than your actual cost of acceptance — added only to credit card sales to offset interchange and processing costs. Customers who pay with a debit card, cash, check, or ACH are never surcharged. Customers who pay with a credit card see the fee disclosed before they swipe, dip, tap, or click "pay."
To be compliant, the program has to follow the rules set by the card networks (Visa, Mastercard, Discover, Amex), the Durbin Amendment of the Dodd-Frank Act (which permanently exempts debit), and any applicable state law. KAJA files your 30-day notice with the acquirer, configures BIN-level card detection at the terminal, supplies the required customer signage, and formats receipts to show the surcharge as a separate line item — so your program is audit-ready from the first transaction.
Every card is checked against the Visa, Mastercard, Discover, and Amex BIN tables at swipe. Credit cards are surcharged; debit, prepaid debit, and HSA/FSA cards are not — automatically, every time.
The networks require 30 days' advance notice through your acquirer before you can begin surcharging. We file the notification on your behalf and confirm you're registered before your first surcharged transaction settles.
Visa caps surcharges at 3% as of April 2023 — and you can never charge more than your actual cost of acceptance. KAJA configures your rate so it stays inside both limits, even if your effective rate drops mid-month.
Card brand rules require disclosure at the point of entry (storefront signage or website banner) and at the point of sale (terminal screen or checkout page). We provide the signage and configure the terminal text — you don't have to draft anything.
Every customer receipt shows the surcharge as a separate, clearly labeled line item — the dollar amount of the fee, not just a percentage. This satisfies Visa's receipt rule and gives customers the audit trail they expect.
When a customer disputes a surcharge, when a state law changes, or when a card brand updates its rules, you reach a person — not a help article. Our team is on call around the clock to keep your program clean.
The card networks require a 30-day advance notice before you can begin surcharging. Here's what happens during that window — and after.
We confirm your state allows surcharging (Connecticut, Massachusetts, and Puerto Rico currently prohibit it — see below), review your industry to flag any category-specific rules, and recommend the right surcharge rate based on your interchange profile.
KAJA files your 30-day notice, configures BIN detection and the surcharge rate on your terminal or gateway, sets up the required disclosure text, and ships your point-of-entry signage so you're ready when the registration window closes.
On day 31, your program goes live. Credit cards are surcharged; debit and other tenders are not. We monitor for card brand rule changes, state law updates, and effective-cost drift, and we adjust your configuration when something requires it.
All three programs reduce your processing cost. They work differently — and only one is right for any given business.
| Surcharge | Convenience Fee | Cash Discount | |
|---|---|---|---|
| What's added | % fee on credit transactions | Flat $ fee for an alternate payment channel | Discount off the posted price for cash |
| Maximum amount | 3% (Visa) or actual cost — whichever is lower | Reasonable flat fee, posted in advance | No cap — set by the merchant |
| Where it applies | Any in-person or card-not-present channel | Non-standard payment channels only | Any channel |
| Debit cards charged? | No (Durbin Amendment) | Yes — flat fee allowed | Discount for Cash |
| Card brand registration | Required — 30-day notice via acquirer | Not required | Not required |
| State restrictions | Prohibited in CT, MA, PR; capped in CO, IL, NY | Legal in all 50 states | Legal in all 50 states |
| Best for | Card-present retail, B2B, professional services | Online or phone payments in industries where flat fees are standard | Any business that wants zero net processing cost |
Not sure which fits your business? Talk to us — we'll recommend the right one based on your industry, ticket size, and customer mix.
Surcharging is currently prohibited in Connecticut, Massachusetts, and Puerto Rico. Several states impose caps below the 3% Visa limit or require the surcharge not exceed your actual cost of acceptance (notably Colorado at 2%, Illinois at 1%, and New York). State laws change, and a number of older state-level bans (in California, Texas, Florida, and others) have been struck down by federal courts as unconstitutional. We confirm your state's current rules before we register your program, and we adjust if a law changes after you're live.
Visa caps surcharges at 3% of the transaction as of April 15, 2023. You also cannot charge more than your actual cost of acceptance — so if your effective processing rate is 2.6%, your surcharge is capped at 2.6%. Some states impose lower caps (Colorado 2%, Illinois 1%). KAJA configures your rate inside whichever limit is lowest.
The Durbin Amendment, part of the 2010 Dodd-Frank Act (codified at 15 U.S.C. § 1693o-2), permanently prohibits surcharging on debit transactions — and the prohibition applies in all 50 states. It covers signature debit, PIN debit, prepaid debit, and HSA/FSA cards (which the networks route as debit on the back end). Our terminals do a real-time BIN lookup on every card and automatically suppress the surcharge on any debit card, so the rule is enforced at the device level rather than by your staff.
Card brand rules require disclosure in three places: at the point of entry (storefront signage or homepage banner), at the point of sale (terminal screen or checkout page), and on the receipt as a separate line item showing the dollar amount of the surcharge. KAJA provides the signage, configures the terminal display text, and formats receipts so all three are handled out of the box. For phone-order businesses, verbal disclosure of the surcharge and its amount is required before the transaction is authorized.
Yes. You're required to give the card networks 30 days' advance notice before you start surcharging — done through your acquiring bank rather than directly with the networks. KAJA files the notice on your behalf as part of onboarding, so you don't have to navigate the paperwork or risk a procedural violation on your first transaction.
The data we see across our merchant book says no — but the answer depends on disclosure. Customers who are surprised by a fee at checkout push back. Customers who see the surcharge clearly disclosed at the entrance, on the website, and on the terminal before they pay almost never do. And because debit, cash, ACH, and checks are always free of any surcharge, every customer has a no-fee option available to them.
A surcharge adds a fee on top of the listed price when a customer pays with credit. A cash discount works the other way around — the listed price is the credit price, and the customer pays less when they pay with cash or debit. The economics are similar, but the legal frameworks are different. Cash discounts are legal in all 50 states with no card brand registration required, which makes them a better fit for businesses in states where surcharging is prohibited or capped tightly. We're happy to run the numbers on both for your business.
Card brand violations can result in fines from Visa or Mastercard (typically $10,000+ per offense), forced refunds to surcharged customers, and in serious cases, termination of your processing account. KAJA's program is structured to prevent the most common violations — surcharging debit, exceeding the 3% cap, missing disclosure, or unregistered surcharging — by enforcing them at the terminal and at the back office. If you ever do receive a notice, we're on the phone with you to respond.
Talk to KAJA about whether a surcharge program is right for your business, or whether a cash discount or convenience fee fits better.