Take control of your payment processing costs by learning how to offset credit card fees using surcharges or convenience fees. The platform allows you to recover processing costs while maintaining a transparent, legally compliant checkout experience for your clients. By automating fee disclosures and rate limits, the platform helps you stay aligned with card network rules and state laws.
IMPORTANT LEGAL & COMPLIANCE WARNINGS
Federal & State Law Restrictions
- Prohibited States: Surcharging (charging an extra fee for credit card usage) is strictly prohibited by law in Connecticut (CT) and Massachusetts (MA).
- New York Surcharge Compliance (NY GBL § 518): If your business is located in New York, you cannot simply add a credit card surcharge at the final checkout step. Under NY State law, you must clearly display the credit card price (inclusive of the surcharge) to the consumer before they initiate the checkout process, or display a clear side-by-side "Cash Price" and "Credit Card Price" breakdown. Surcharges must also never exceed your actual processing cost.
- Debit Cards: It is a violation of federal law (Durbin Amendment) and card network rules to apply surcharges to debit or prepaid cards. The platform automatically attempts to detect and block debit card surcharging, but final compliance remains your legal responsibility.
Why use surcharges or convenience fees
- Protect your profit: Offset credit card processing costs so they don’t cut into your margins.
- Stay transparent and compliant: Align with card network rules and automatically show fee disclosures to clients.
- Choose what works for you: Set a percentage-based surcharge or a flat/percentage-based convenience fee that fits your business model.
- Keep everything in one place: Manage payment methods, fees, and invoices directly in your account.
Understanding Fee Types
Before configuring your settings, you must determine which fee type best suits your business model and location. Applying the wrong fee type may result in merchant account suspension or class-action lawsuits.
Surcharges
A surcharge adds a fee specifically to credit card payments.
- Applies to: Credit cards only (Visa, Mastercard, Discover, Amex).
- Fee Type: Percentage-based only (strictly capped between 1% and 3%).
- Debit Cards: Strictly prohibited. You cannot apply surcharges to debit or prepaid cards, even if processed as "credit".
- Network Limit: Cannot exceed your actual credit card processing merchant discount rate, up to a maximum of 3% in the US.
Important Surcharging is prohibited in Connecticut (CT) and Massachusetts (MA). Restrictions also apply in Maine (ME), New York (NY), and Puerto Rico (PR).
Convenience Fees
A convenience fee applies when a client chooses to pay through an alternative, non-standard payment channel (such as paying online instead of in-person).
- Applies to: Online payment transactions where an alternative, physical payment method (cash/check/in-person) is typically standard.
- Fee Type: Flat fee only (for Visa card acceptance compliance*).
- Debit Cards: May apply to debit cards if the fee is charged across all payment types in that alternative channel.
Note While some networks permit percentage-based convenience fees under narrow guidelines, Visa rules strictly mandate that a convenience fee must be a flat, fixed fee regardless of the transaction value.
Choosing Between Surcharge and Convenience Fee
Note Fee-offsetting features are available only to businesses located in the United States, Canada, Australia, or New Zealand.
| Feature | Surcharge | Convenience Fee |
| Payment Types Covered | Credit cards only. | Applies to all online card payments (Credit and Debit) in the specific channel. |
| Fee Format | Percentage-based (1–3%). | Flat fee only (required to maintain Visa network compliance). |
| Debit Cards Allowed? | No (Strictly prohibited under federal law). | Yes, if applied uniformly across all card types in that specific channel. |
| Geographic Limits | Banned in CT, MA. Heavily restricted in NY, ME, and PR. | Permitted in most states, provided it represents a genuine alternative channel. |
Payment Processors:
- Payments by inTandem – Available Now
- Stripe – Expected April 2026
- Square – Coming soon
Regional Maximum Surcharge Limits (Enforced Automatically)
To assist with compliance, the platform enforces maximum rate limits:
| Region | Max Allowed Surcharge Rate |
| United States | 3.0% (Reduced in accordance with card network rule changes) |
| Canada | 2.4% |
| Australia | 1.75% |
| New Zealand | 2.0% |
How the Platform Helps You Stay Compliant
The platform includes automated safeguards to minimize your regulatory exposure:
- Automatic Debit Card Detection: Surcharges are automatically stripped if a debit or prepaid card is used, protecting you from violating federal card processing laws.
- Hard Rate Capping: The system prevents you from entering surcharge rates that exceed regional caps (e.g., 3% in the US).
- Clear Checkout Disclosures: Clients are shown the surcharge or convenience fee as a distinct, labeled line item before they click to pay.
- No Manual Overrides on Staff-Facing Transactions: Offsetting fees only apply to client-initiated online payments to prevent accidental non-compliant charges by staff.
Your Legal Responsibilities
While the platform provides automated tools, you are ultimately liable for compliance with consumer protection laws in your jurisdiction. Follow this mandatory checklist:
- Offer a Fee-Free Alternative: To legally charge surcharges or convenience fees, you must offer clients at least one standard, fee-free payment option (e.g., ACH/bank transfer, cash/check in-person, PayPal, or Apple Pay).
- Avoid Duplicative or Disguised Fees: Never add manual "handling," "processing," or "admin" fees on top of the system-calculated surcharge.
- Verify Your Business Location: Ensure your physical address is accurate under Settings ➜ Business Info ➜ Contact Info. The platform relies on this address to enforce regional legal caps and prohibitions.
- State-Specific Disclosures (New York Merchants): If you are based in New York, you must ensure your client-facing service catalog, invoices, or booking pages clearly state the credit-card-inclusive price alongside the cash price to comply with NY GBL § 518.
Legal Disclaimer
The platform provides technical tools to enable surcharging and convenience fees. However, the Customer is solely responsible for ensuring compliance with all local, state, and federal laws, as well as card network rules (Visa, Mastercard, American Express, Discover). Engaging in non-compliant surcharging can lead to severe fines from card networks, legal prosecution from state Attorneys General, and the immediate termination of your payment processing privileges. We strongly advise consulting qualified legal counsel in your state before enabling these features.
How to set up surcharges or convenience fees
Setting Up Surcharges or Convenience Fees
Follow these steps to enable fee offsetting in your account.
- Open the platform.
- In the Settings menu, click Payments.
- Click Online payments.
- In the "Offset card fees" section, select Surcharge or Convenience fee.
- Enter the fee amount (The platform will automatically cap percentage-based surcharges to ensure they do not exceed regional limits).
- Review the legal compliance disclaimer and confirm your consent.
- Click Save.
After saving, you will see a transparent breakdown of each transaction (Gross Amount, Fee, and Net Payout) in your back-office dashboard.
Frequently Asked Questions
Q: A surcharge didn't appear on a client's invoice. Why?
- Debit Card Used: The system detected a debit or prepaid card and automatically blocked the surcharge to keep you compliant with federal law.
- Back-Office Payment: The payment was entered manually by your staff. To prevent non-compliant charging, surcharges only apply to client-initiated online checkout.
Q: Why is the fee option missing from my Settings menu?
- Unsupported Gateway: These compliance tools are currently available only for merchants using Payments by inTandem (Stripe integration is expected in April 2026).
- Unsupported Country: Your business address in Settings is set to a country outside the US, Canada, Australia, or New Zealand.
- No Fee-Free Option Enabled: You must configure at least one fee-free alternative payment method in your dashboard first.
Q: Can I apply both a surcharge and a convenience fee?
No. You may only select and activate one fee-offsetting type at any given time.
Q: Are convenience fees allowed to be percentage-based?
Under Visa's strict card acceptance rules, convenience fees must be flat/fixed fees and cannot be percentage-based. While the system may permit a percentage setting for alternative networks, using a percentage-based convenience fee on a Visa card transaction violates Visa guidelines and can trigger network fines. We highly recommend using flat convenience fees.