the cpa’s guide to credit card surcharging - affinipay

The CPA’s Guide to Credit Card Surcharging


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The CPA’s Guide to Credit Card Surcharging of 10

What CPAs Need to Know About Surcharging

CPAs are all too familiar with the fact that it costs money to move money within our financial systems. Credit cards are no exception to this rule—if you accept credit card payments from your clients, you’ll inevitably have to pay processing fees with each transaction. Of course, as a business owner, you’re always looking for ways to manage your costs and operate more efficiently, so you’re likely looking for ways to offset the costs of processing each month.

Many businesses that accept credit cards use surcharges to account for this, but you may be wondering how to effectively implement one into your billing or if you’re able to do so in your state.

Below, we’ll break down exactly what surcharging means, including its legal status in the U.S. and regulations in place around this practice.

Credit card surcharging rules

The legal status of surcharging in the U.S. (by state)

What is a surcharge?

https://cpacharge.com/features/payments/?utm_campaign=surcharging&utm_medium=ebook


What is a surcharge?

In the context of credit cards, surcharging is defined as adding up to 4 percent on credit card transactions to recoup payment processing costs. The practice became permissible to merchants in 2013 in the wake of a class action lawsuit against Visa and MasterCard.

It’s important to note that a surcharge is distinct from a convenience fee, which is a relatively older but similar term in the credit card lexicon. A convenience fee is a flat rate that can be added to both debit and credit card transactions. It’s a cost passed to the customer to give them the option of paying in a way that’s convenient to them, hence the name.

SURCHARGE

Up to 4% Flat rate

CONVENIENCE FEE




Click for more information

Surcharge Prohibited: Yes

Surcharge Prohibited: No

LEGEND



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Alabama Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Alabama Attorney General

Alaska Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: State of Alaska Department of Law

Arizona Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Arizona Attorney General

Arkansas Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Arkansas Attorney General

California Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: California Attorney General

Colorado Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Colorado Attorney General

Connecticut Surcharge Prohibited: YesCredit/Debit Usage Discounts: Yes Resources: Conn. Gen. Stat. §42-133ff

Delaware Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Delaware Attorney General

Florida Surcharge Prohibited: No Credit/Debit Usage Discounts: NoResources: Florida Attorney General

Georgia Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Georgia Attorney General

Hawaii Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Hawaii Attorney General

Idaho Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Idaho Attorney General

Illinois Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Illinois Attorney General

Indiana Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Indiana Attorney General

Iowa Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Iowa Attorney General

BACK TO MAP


https://www.alabamaag.gov/

http://www.law.alaska.gov/department/about.html

https://www.azag.gov/

https://arkansasag.gov/

https://oag.ca.gov/consumers/general/credit-card-surcharges

https://coag.gov/

https://law.justia.com/codes/connecticut/2011/title42/chap739/Sec42-133ff.html

https://attorneygeneral.delaware.gov/

http://myfloridalegal.com/

https://law.georgia.gov/

https://ag.hawaii.gov/

https://www.ag.idaho.gov/

http://www.illinoisattorneygeneral.gov/

https://www.in.gov/attorneygeneral/

https://www.iowaattorneygeneral.gov/




Kansas Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Kansas Attorney General

Kentucky Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Kentucky Attorney General

Louisiana Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Louisiana Attorney General

Maine Surcharge Prohibited: No Credit/Debit Usage Discounts: NoResources: Maine Attorney General

Maryland Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Maryland Attorney General

Massachusetts Surcharge Prohibited: YesCredit/Debit Usage Discounts: YesResources: Massachusetts Attorney General

Michigan Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Michigan Attorney General

Minnesota Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Minnesota Attorney General

Mississippi Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Mississippi Attorney General

Missouri Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Missouri Attorney General

Montana Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Montana Attorney General

Nebraska Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Nebraska Attorney General

Nevada Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Nevada Attorney General

New Hampshire Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: New Hampshire Attorney General

New Jersey Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: New Jersey Attorney General

BACK TO MAP

https://ag.ks.gov/about-the-office/contact-us

https://ag.ky.gov/Pages/default.aspx

https://www.ag.state.la.us/

https://www.maine.gov/ag/

https://www.marylandattorneygeneral.gov/

https://www.mass.gov/orgs/office-of-attorney-general-maura-healey

https://www.michigan.gov/ag/

http://www.ag.state.mn.us/

https://www.ago.state.ms.us/

https://ago.mo.gov/

https://dojmt.gov/agooffice/

https://ago.nebraska.gov/

https://ag.nv.gov/

https://www.doj.nh.gov/

https://nj.gov/oag/




New Mexico Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: New Mexico Attorney General

New York Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: New York Attorney General

North Carolina Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: North Carolina Attorney General

North Dakota Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: North Dakota Attorney General

Ohio Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Ohio Attorney General

Oklahoma Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Oklahoma Attorney General

Oregon Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Oregon Attorney General

Pennsylvania Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Pennsylvania Attorney General

Rhode Island Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Rhode Island Attorney General

South Carolina Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: South Carolina Attorney General

South Dakota Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: South Dakota Attorney General

Tennessee Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Tennessee Attorney General

Texas Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Texas Attorney General

Utah Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Utah Attorney General

Vermont Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Vermont Attorney General

BACK TO MAP

https://www.nmag.gov/

https://ag.ny.gov/

https://ncdoj.gov/

https://attorneygeneral.nd.gov/

https://www.ohioattorneygeneral.gov/

https://www.oag.ok.gov/

https://www.doj.state.or.us/

https://www.attorneygeneral.gov/get-help/

http://www.riag.ri.gov/

http://www.scag.gov/

https://atg.sd.gov/

https://www.tn.gov/attorneygeneral.html

https://www.texasattorneygeneral.gov/

https://attorneygeneral.utah.gov/

https://ago.vermont.gov/




Virginia Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: Virginia Attorney General

Washington Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Washington Attorney General

West Virginia Surcharge Prohibited: NoCredit/Debit Usage Discounts: NoResources: West Virginia Attorney General

Wisconsin Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Wisconsin Attorney General

Wyoming Surcharge Prohibited: NoCredit/Debit Usage Discounts: YesResources: Wyoming Attorney General

BACK TO MAP

https://www.oag.state.va.us/

https://www.atg.wa.gov/

https://ago.wv.gov/Pages/default.aspx

https://www.doj.state.wi.us/

http://attorneygeneral.wyo.gov/


Surcharging rules

Almost every major card brand requires you to notify them of your intention to surcharge. Most brands have a form to fill out on their website. Otherwise, you must provide a written letter to your account representative. More importantly, once notified, you must wait no less than 30 days before you start implementing surcharging.

Notify the card brand of your intent to surcharge

If you choose to surcharge, you’re required to follow rules put in place by each credit card brand. We’ll discuss the most common rules below:

Surcharges must be listed as separate line items

You cannot simply loop your surcharges into each transaction. When a surcharge occurs, it must be listed separately on each invoice. Itemizing your invoice also helps you avoid charge disputes. It’s important to note that you cannot implement a surcharge on debit cards.

Do not surcharge more than the cost of your processing fee

This rule essentially means that you can only surcharge to recoup the losses sustained from processing fees—you cannot use surcharging as a means to profit. If, for example, your all-in rate is only three percent, you cannot apply a 4 percent surcharge.

Notify your clients of your intention to surcharge

You are also required to notify your customers or clients of your intention to surcharge (as soon as you are eligible to do so). For example, if using an online payments solution, you would have to include language on your payment page that clearly states your intentions to do so. Fortunately, if you’re using the right online payment solution, this step can be skipped altogether, as they will handle it on your behalf.

Payment processing may be one of the costs of doing business in today’s economy. However, your clients will appreciate being able to pay with a more convenient payment option, which increases the speed and the frequency that you’ll get paid for your services. And with surcharging, you can benefit from the efficiency and popularity of online payment solutions while still offsetting the fees associated with accepting credit cards.

To learn more about CPACharge, an online payment solution specifically designed for CPAs and CPA firms, schedule a demo of our solution. Or, if you’re ready to start getting paid faster, sign up today!


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CPACharge is a registered agent of Wells Fargo Bank N.A., Concord, CA, Synovus Bank, Columbus, GA., and Fifth Third Bank, N.A., Cincinnati, OH.

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the cpa’s guide to credit card surcharging - affinipay

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