You’ve probably heard about credit card surcharging AKA free credit card processing, 0% payment processing fees, or passing on the fees. We’ve put together a comprehensive guide to understanding credit card surcharging, and the pros and cons of passing on the fees to customers.
For those of you who want the skinny in less than 2 minutes, you’re in the right place. Let’s go!
Credit card surcharging is when a business adds a fee (2.4%) to a customer’s bill when they pay with a credit card. It helps cover credit card processing costs, which would otherwise eat into the business’s margins.
Instead of the business absorbing the fee, the customer pays it. For example, on a $100 purchase, a 2.4% surcharge means the customer pays $102.40 while the business keeps the full $100 after processing.
To maintain profit margins, be transparent about fees, and nudge customers toward cheaper payment methods like debit or cash.
Yes—but with rules. In Canada, the cap is 2.4%. In the U.S., most states allow it with caps (e.g., 3% for Visa, 4% for Mastercard), but some places like Massachusetts, Connecticut, and Puerto Rico prohibit it. For more information, check our guide on credit card surcharging or consult your local rules.
Pros:
✅ Keeps margins healthy
✅ Encourages cost-effective payment methods
✅ Promotes fee transparency
Cons:
⚠️ Might irritate customers or hurt loyalty
⚠️ Requires legal compliance and clear disclosures
⚠️ Could create operational headaches (e.g., more cash, cheques, or admin work)
Surcharging isn’t for every business, but it can be a smart move—especially if done thoughtfully, legally, and with customer experience in mind.