Visa has announced a rule change to decrease the maximum surcharge amount that consumers pay for credit card transactions. This change will cap the maximum surcharge amount at 3.00%.
Note the following important dates and changes for the Merchant Surcharge Program:
Effective March 1st, 2023, the surcharge rate for all new merchants enrolling in the Merchant Surcharge Program will be reduced from 3.50% to 3.00% for all card brands.
Effective April 1st, 2023, existing merchant surcharge program merchants will have the surcharge rate automatically reduced from 3.50% to 3.00%.
Merchants previously assessing a 3.50% surcharge must update all consumer-facing signage and disclosures to accurately reflect the updated 3.00% rate.
Overview
Surcharging allows merchants to add a "% checkout fee" to a credit card transaction, paid by the cardholder, to help cover the merchant’s credit card processing fees.
The CardPointe Gateway supports the Merchant Surcharge Program to allow eligible merchants to add a surcharge on applicable credit card transactions. This guide provides an overview of the Merchant Surcharge Program as it relates to the CardPointe Gateway, including card brand requirements and related application changes.
You should review this guide to help determine if the Merchant Surcharge Program is right for your business.
The Merchant Surcharge Program is only available to qualifying merchants enrolled in a Merchant Services account and processing on the First Data Rapid Connect platform.
The changes described in this document are currently in development.
What's New?
Date Updated: July 14, 2022
To align with updated state regulations, Colorado has been removed from the list of restricted states and territories. The CardPointe Gateway will no longer waive the surcharge amount when the cardholder provides a Colorado postal code.
In addition to card brand regulations and other applicable laws, merchants in Colorado are responsible for ensuring that they are in compliance with Colorado state law, including but not limited to Colorado Senate Bill 21-091. See https://leg.colorado.gov/bills/sb21-091 for more information.
Colorado merchants must present the following disclosure to their merchants:
TO COVER THE COST OF PROCESSING A CREDIT OR CHARGE CARD TRANSACTION, AND PURSUANT TO SECTION 5-2-212, COLORADO REVISED STATUTES, A SELLER OR LESSOR MAY IMPOSE A PROCESSING SURCHARGE IN AN AMOUNT NOT TO EXCEED THE MERCHANT DISCOUNT FEE THAT THE SELLER OR LESSOR INCURS IN PROCESSING THE SALES OR LEASE TRANSACTION. A SELLER OR LESSOR SHALL NOT IMPOSE A PROCESSING SURCHARGE ON PAYMENTS MADE BY USE OF CASH, A CHECK, OR A DEBIT CARD OR REDEMPTION OF A GIFT CARD.
Understanding the Merchant Surcharge Program
When you enroll in the Merchant Surcharge program, a fixed 3% surcharge rate will be set for your merchant account. Once enabled, this surcharge rate will automatically be applied to the subtotal amount of all eligible transactions.
Eligible transactions are all credit card payments, including recurring payments.
For card-not-present transactions, if the cardholder resides in a restricted region the 3% surcharge rate will not be applied.
Depending on the application(s) you use to accept payments, you may need to make minor changes to your integration or business processes. See Integrated Payment Application Changes for updates to the CardPointe Gateway API, and CardPointe Payment Application Changes for updates to the CardPointe Virtual Terminal, HPP, and other applications.
Important Considerations
Review the following important considerations to determine if the Merchant Surcharge Program is right for your business.
Card Brand Requirements
Review state and local regulations for surcharging. The following US states and territories do not allow surcharging:
States - Connecticut (CT)
- Massachusetts (MA)
Territories - Puerto Rico
Armed Forces Locations - Domestic (AF)
- EU (AE)
- Pacific (AP)
- US (AA)
Merchant locations within these regions cannot enroll in the Merchant Surcharge Program or add a surcharge to their transactions. Additionally, cardholders residing in these locations are exempt from surcharging for card-not-present e-commerce, mail, telephone, and recurring transactions. For these transactions, the CardPointe Gateway disables surcharging at the transaction level when a cardholder's postal code matches a restricted region.
- Connecticut (CT)
Update in-store and in-app messaging to clearly notify cardholders that a surcharge will be applied to applicable transactions.
See the following examples, provided by Visa, for more information: https://usa.visa.com/dam/VCOM/download/merchants/sample-surcharge-disclosure-signage.pdf.
Merchant Disclaimer
As a merchant enrolled in the Merchant Surcharge Program, you are responsible for your compliance with the Card Brand requirements. Note the following:
There may be other disclosure requirements related to surcharging depending on your type of business and where you are located. Please review the Card Brand rules and any state laws to determine what applies to your business. You are solely responsible for preparing disclosures that comply with applicable laws.
Notices/Disclosures indicating that you are assessing a surcharge on credit card purchases must be posted at all points of customer interface, including point of entry and point of sale/transaction.
Some states have additional disclosure requirements whereby businesses are not allowed to advertise one price, and then add a surcharge at the point of sale when a consumer elects to pay with a credit card. Instead, businesses are required to inform consumers of the higher credit card price for each product or service by posting the higher prices. In these states, merchants must clearly post the dollar and cents amount of each product or service offered. Additionally, businesses may be required to inform consumers of the higher credit card price for each product or service by posting the dollar and cents amount of the higher price.
In addition to card brand regulations and other applicable laws, merchants in Colorado are responsible for ensuring that they are in compliance with Colorado state law, including but not limited to Colorado Senate Bill 21-091. See https://leg.colorado.gov/bills/sb21-091 for more information.
Colorado merchants must present the following disclosure to their merchants:
TO COVER THE COST OF PROCESSING A CREDIT OR CHARGE CARD TRANSACTION, AND PURSUANT TO SECTION 5-2-212, COLORADO REVISED STATUTES, A SELLER OR LESSOR MAY IMPOSE A PROCESSING SURCHARGE IN AN AMOUNT NOT TO EXCEED THE MERCHANT DISCOUNT FEE THAT THE SELLER OR LESSOR INCURS IN PROCESSING THE SALES OR LEASE TRANSACTION. A SELLER OR LESSOR SHALL NOT IMPOSE A PROCESSING SURCHARGE ON PAYMENTS MADE BY USE OF CASH, A CHECK, OR A DEBIT CARD OR REDEMPTION OF A GIFT CARD.
Merchant Surcharge Program Guidelines
In addition to the requirements each merchant must meet to enable surcharging, note the following restrictions and limitations:
Surcharges cannot be applied to transactions when the cardholder is paying with a Signature Debit, PIN Debit, PINless Debit, or Prepaid card. For these payment types, the surcharge will not be applied.
Surcharges cannot be applied to card-not-present e-commerce, mail, telephone, and recurring transactions when the cardholder's postal code matches a restricted region. For these transactions, the merchant must provide the cardholder's postal code to validate the cardholder's eligibility. If the postal code matches a restricted region, the surcharge will not be applied.
The Surcharge Rate of 3% of the post-tax amount of the transaction will be applied by the CardPointe Gateway.
The Surcharge Rate cannot vary at the transaction level. The Surcharge Rate of 3% is set for the merchant account, and automatically applied to applicable transactions.
The Surcharge Rate cannot be applied to partial authorizations. Partial authorizations are automatically disabled on surcharge-eligible transactions.
For card-present payments that include a surcharge, USB card reader devices (for example, the ID Tech Augusta) are supported for use with the CardPointe Desktop SDK solution and CardPointe Virtual Terminal.
Note the following CardPointe product restrictions:
CardPointe Integrated Terminal and CardPointe Retail Terminal devices are currently not supported for use with the Merchant Surcharge Program. Merchants who currently use CardPointe Integrated Terminal or CardPointe Retail Terminal devices to accept payments, cannot enroll in the Merchant Surcharge Program at this time. Additionally, merchants enrolled in the Merchant Surcharge Program will be unable to order ineligible devices, including CardPointe Integrated Terminal and CardPointe Retail Terminal devices.
The CardPointe Mobile App is currently not supported for use with the Merchant Surcharge Program. Merchants enrolled in the program should not attempt to process transactions using CardPointe Mobile, because the transactions will decline.
The following topics describe important changes to the CardPointe Gateway API and related integrated payment applications to support the Merchant Surcharge Program.
The CardPointe Gateway API changes are currently in a private beta. For more information, reach out to your account manager.
If your application is integrated with the CardPointe Gateway API, you will need to make minor updates to your integration to support additional response fields returned when surcharging is enabled, as well as minor updates to your authorization and capture requests, to ensure that surcharges are handled correctly.
As described in the Card Brand Requirements above, you must also display in-app disclosure that a credit card surcharge is will be applied.
Additionally, if your application is not already collecting and providing the cardholder's postal code in the payment request, you must update your integration to include this data. Once surcharging is enabled for a merchant account, all card-not-present transactions for that merchant must include a postal code for validation purposes.
New Authorization Request Parameters
| Field | Max Length | Type | Description |
|---|---|---|---|
fee_excluded_amount | 14 | N | When allowing the customer to provide a tip amount on a receipt, and then performing a delayed capture/tip adjustment on the initial authorization amount, include the customer-specified tip amount in the For example, when capturing a $10 authorization, with a $4 tip adjustment, the capture request includes Note: When the tip amount is included in the authorization, the surcharge is applied to the tip amount as well. |
| postal | 9 | AN | For card-not-present e-commerce, mail, telephone, and recurring transactions, merchants must gather the cardholder's postal code and include it in the authorization request to ensure that cardholders in restricted territories are not surcharged. If surcharging is enabled, but no postal code is supplied in the authorization request, the transaction will be declined by the CardPointe Gateway. If the cardholder's postal code is included, but matches a restricted location, then the surcharge will be waived and the transaction will be processed normally. |
| waiver | 1 | AN | For forced credits, when the initial authorization did not include a surcharge, include |
New Response Fields
| Field | Max Length | Type | Description |
|---|---|---|---|
| fee_amount | 14 | N | The surcharge amount applied to the transaction, in dollars and cents. "0.00" if the surcharge was waived or bypassed. |
| fee_authcode | 6 | N | Duplicate of the authcode field. |
| fee_format | 7 | AN | The surcharge format configured for the merchant account. Always "percent" when a surcharge is successfully applied to the transaction. Empty ("") if the surcharge was waived or bypassed. |
| fee_merchid | - | - | Not applicable for surcharge transactions; returns an empty value (""). |
| fee_retref | - | - | Not applicable for surcharge transactions; returns an empty value (""). |
| fee_type | 13 | AN | The type of fee applied to the transaction. Always "SURCHRG" when a surcharge is successfully applied. "SURCHRG_WAIVED" if the surcharge was waived or bypassed. |
| fee_value | 3 | N | The surcharge rate applied to the transaction. Returns "350" when a surcharge is successfully applied to the and "0" if the surcharge was waived or bypassed. |
Request and Response Examples
Expand the following examples to see how the CardPointe Gateway handles the following scenarios for merchants enrolled in the Merchant Surcharge Program.
Credit Authorization - Surcharge Applied
Request
{
"merchid": "777777777778",
"account": "9370197441551006",
"amount": "5000",
"expiry": "1224"
}
Response
{
"fee_value": "350",
"amount": "51.75",
"resptext": "Approval",
"fee_authcode": "PPS468",
"commcard": "N",
"cvvresp": "P",
"fee_type": "SURCHRG",
"respcode": "000",
"avsresp": "Z",
"entrymode": "Keyed",
"merchid": "777777777778",
"token": "9370197441551006",
"authcode": "PPS468",
"respproc": "RPCT",
"fee_amount": "1.75",
"bintype": "",
"fee_format": "percent",
"expiry": "1224",
"retref": "132519139221",
"respstat": "A",
"fee_retref": "",
"account": "9370197441551006",
"fee_merchid": ""
} Debit Authorization - Surcharge Waived
Request
{
"merchid": "777777777778",
"account": "9457943444201933",
"amount": "5000",
"expiry": "1222"
}
Response
{
"fee_value": "0",
"amount": "50.00",
"resptext": "Approval",
"fee_authcode": "PPS015",
"commcard": "N",
"cvvresp": "P",
"fee_type": "SURCHRG_WAIVED",
"respcode": "000",
"avsresp": "Z",
"entrymode": "Keyed",
"merchid": "777777777778",
"token": "9457943444201933",
"authcode": "PPS015",
"respproc": "RPCT",
"fee_amount": "0.00",
"bintype": "",
"fee_format": "",
"expiry": "1222",
"retref": "132495138187",
"respstat": "A",
"fee_retref": "",
"account": "9457943444201933",
"fee_merchid": ""
} Credit Refund - Surcharge Applied
Request
{
"retref": "132498138370",
"merchid": "777777777778"
}
Response
{
"fee_value": "350",
"amount": "51.75",
"resptext": "Approval",
"fee_authcode": "REFUND",
"fee_type": "SURCHRG",
"respcode": "00",
"merchid": "777777777778",
"respproc": "PPS",
"fee_amount": "1.75",
"fee_format": "percent",
"retref": "132499138378",
"respstat": "A",
"fee_retref": "",
"fee_merchid": ""
} Credit Void - Surcharge $0
Request
{
"retref": "132501138471",
"merchid": "777777777778"
}
Response
{
"fee_value": "0",
"amount": "0.00",
"resptext": "Approval",
"fee_authcode": "REVERS",
"fee_type": "SURCHRG",
"respcode": "000",
"merchid": "777777777778",
"authcode": "REVERS",
"respproc": "RPCT",
"fee_amount": "0.00",
"fee_format": "",
"currency": "USD",
"retref": "132501138471",
"respstat": "A",
"fee_retref": "",
"fee_merchid": ""
} E-Commerce Authorization - Declined Without "postal"
Request
{
"merchid": "777777777778",
"account": "9370197441551006",
"amount": "5000",
"expiry": "1224"
}
Response
{
"amount": "0.00",
"resptext": "Surcharge Not Supported",
"cardproc": "RPCT",
"commcard": "N",
"respcode": "104",
"entrymode": "ECommerce",
"merchid": "777777777778",
"token": "9370197441551006",
"respproc": "PPS",
"bintype": "",
"expiry": "1224",
"retref": "132518139170",
"respstat": "C",
"account": "9370197441551006"
} E-Commerce Authorization - Surcharge Waived with Restricted "postal"
Request
{
"merchid": "777777777778",
"account": "9370197441551006",
"amount": "5000",
"expiry": "1224",
"postal": "06857"
}
Response
{
"fee_value": "0",
"amount": "50.00",
"resptext": "Approval",
"fee_authcode": "PPS020",
"commcard": "N",
"cvvresp": "P",
"fee_type": "SURCHRG_WAIVED",
"respcode": "000",
"avsresp": "Z",
"entrymode": "ECommerce",
"merchid": "777777777778",
"token": "9370197441551006",
"authcode": "PPS020",
"respproc": "RPCT",
"fee_amount": "0.00",
"bintype": "",
"fee_format": "",
"expiry": "1224",
"retref": "132513138902",
"respstat": "A",
"fee_retref": "",
"account": "9370197441551006",
"fee_merchid": ""
} Capture with Tip Adjustment - Surcharge Applied to Pre-Tip Amount (Subtotal)
Request
{
"merchid": "777777777778",
"retref": "132515139031",
"amount":"6000",
"fee_excluded_amount":"1000"
}
Response
{
"fee_value": "350",
"amount": "61.75",
"resptext": "Approval",
"setlstat": "Queued for Capture",
"fee_authcode": "PPS021",
"fee_type": "SURCHRG",
"respcode": "000",
"batchid": "292",
"merchid": "777777777778",
"token": "9370197441551006",
"authcode": "PPS021",
"respproc": "RPCT",
"fee_amount": "1.75",
"fee_format": "percent",
"retref": "132515139031",
"respstat": "A",
"fee_retref": "",
"account": "9370197441551006",
"fee_merchid": ""
} Forced Credit with "waiver" - Surcharge Waived
Request
{
"merchid": "777777777778",
"account": "9370197441551006",
"amount": "-5000",
"expiry": "1224",
"waiver": "Y"
}
Response
{
"fee_value": "0",
"amount": "-50.00",
"resptext": "Approval",
"fee_authcode": "REFUND",
"commcard": "N",
"cvvresp": "U",
"fee_type": "SURCHRG_WAIVED",
"respcode": "00",
"batchid": "292",
"avsresp": "U",
"entrymode": "Keyed",
"merchid": "777777777778",
"token": "9370197441551006",
"authcode": "REFUND",
"respproc": "PPS",
"fee_amount": "0.00",
"bintype": "",
"fee_format": "",
"expiry": "1224",
"retref": "132517139123",
"respstat": "A",
"fee_retref": "",
"account": "9370197441551006",
"fee_merchid": ""
} Forced Credit without "waiver" - Surcharge Applied
Request
{
"merchid": "777777777778",
"account": "9370197441551006",
"amount": "-5000",
"expiry": "1224"
}
Response
{
"fee_value": "350",
"amount": "-51.75",
"resptext": "Approval",
"fee_authcode": "REFUND",
"commcard": "N",
"cvvresp": "U",
"fee_type": "SURCHRG",
"respcode": "00",
"batchid": "292",
"avsresp": "U",
"entrymode": "Keyed",
"merchid": "777777777778",
"token": "9370197441551006",
"authcode": "REFUND",
"respproc": "PPS",
"fee_amount": "-1.75",
"bintype": "",
"fee_format": "percent",
"expiry": "1224",
"retref": "132516139077",
"respstat": "A",
"fee_retref": "",
"account": "9370197441551006",
"fee_merchid": ""
} CardPointe Integrated Terminal
CardPointe Integrated Terminal devices are currently not supported for use with the Merchant Surcharge Program. Support for the Merchant Surcharge program is planned for a future update to the CardPointe Integrated Terminal solution.
Merchants who currently use CardPointe Integrated Terminal devices to accept payments, cannot enroll in the Merchant Surcharge Program at this time.
Additionally, merchants enrolled in the Merchant Surcharge Program are unable to order CardPointe Integrated Terminal devices.
CardPointe Mobile SDK
If your mobile application is integrated with the CardPointe Mobile SDKs for tokenization, and the CardPointe Gateway API for payments, you will need to update your application to align with the CardPointe Gateway API changes described above.
As described in the Card Brand Requirements above, you must also display in-app disclosure that a credit card surcharge will be applied.
CardPointe Payment Application Changes
The Merchant Surcharge Program is currently supported on the CardPointe Virtual Terminal and the CardPointe Hosted Payment Page (HPP).
Enhancements to support the Merchant Surcharge Program will be available in future updates of the CardPointe Mobile Application.
The changes to these applications are currently in development; additional information will be available as development completes.
CardPointe Virtual Terminal
The CardPointe Virtual Terminal has been enhanced with support for the Merchant Surcharge Program. Merchants enrolled in the program will have a credit card surcharge automatically applied to all eligible credit card transactions, including billing plan payments, processed on the Virtual Terminal.
The Virtual Terminal and transaction receipts include an itemized breakdown of the subtotal, credit card surcharge amount, and total amount of the transaction, when the credit card surcharge is applied.
In addition to the requirements described in Important Considerations earlier in this guide, note the following important changes and considerations for surcharging on the Virtual Terminal.
You must notify cardholders that a 3% credit card surcharge will be applied to credit card payments, including payments using a Customer Profile when the payment method is a credit card, and the cardholder's zip code is not a restricted location.
Cardholder Zip Codes
For card-not-present (e-commerce, mail, telephone, and billing plan) credit card transactions, you must enter the cardholder's zip code to ensure that cardholders in restricted territories are not surcharged. You will be unable to process these transactions on the Virtual Terminal without entering the zip code.
Additionally, all Customer Profiles used for billing plans must include a valid zip code. For existing billing plans, ensure that the associated profile includes the cardholder's zip code. Billing plan transactions without a zip code will be declined by the CardPointe Gateway.
If a cardholder's zip code matches a restricted territory, the surcharge will not be applied.
Billing Plans
As mentioned above, all billing plan transactions must include a valid zip code in the associated Customer Profile; billing plan transactions without a zip code will be declined by the CardPointe Gateway.
Existing billing plans must be updated to charge the proper amount, per the agreement with the cardholder, unless you obtain the cardholder's agreement to continue the billing plan at the increased cost.
Tips and Tip Adjustments
For tips collected at the time of the sale, the tip value is included in the surcharge calculation.
For tip adjustments after the time of sale, the tip value is excluded from the surcharge calculation.
Only one of these tipping models can be enabled at a time.
Card-Present Transactions
CardPointe Integrated Terminals are currently not supported for use with the Merchant Surcharge Program. If you use a CardPointe Integrated Terminal to accept card-present payments, that option will be disabled on the Virtual Terminal once you are enrolled in the Merchant Surcharge Program.
The ID TECH SREDKey/SREDKey2 is currently not supported for use with the Merchant Surcharge Program.
As an alternative, you can use a supported USB card reader (for example, the ID TECH Augusta, which includes support for EMV payments.
CardPointe Hosted Payment Page (HPP)
For merchants enrolled in the Merchant Surcharge Program the HPP displays a surcharge disclaimer and itemized Subtotal, Credit Card Surcharge, and Total amounts on the Payment Page and receipt for eligible credit card transactions.
In addition to the requirements described in Important Considerations earlier in this guide, note the following considerations for surcharging on the HPP:
- If the customer enters a debit card number on the payment page, the surcharge is not applied, and the surcharge details are not displayed on the Payment Page or receipt.
- If the customer's postal code matches a location that does not permit surcharging, the surcharge is not applied, and the surcharge details are not displayed on the Payment Page or receipt.
CardPointe Mobile
Support for the Merchant Surcharge Program on the CardPointe Mobile apps for Android and iOS is currently in development.
The CardPointe Mobile app is not supported for use with the Merchant Surcharge Program at this time. Merchants enrolled in the program should not attempt to process transactions using the CardPointe Mobile app, because transactions will decline.