Business InformationPayment Processing

Can You Surcharge on a Debit Card?

By August 29, 2019 April 24th, 2020 No Comments

Don’t Surcharge Just to Surcharge

Surcharging is spreading like wildfire. My advice to every merchant who wants to or is considering surcharging is to pause and think about it first. It is not something you should rush into. Surcharging provides an opportunity for your clients to become frustrated with your new processing method. We meet merchants who are angry and are tired of paying for their customer’s convenience to use a credit card.

I understand taking a cut in profit to accept your customer’s is a hard pill to swallow. Surcharging eliminates that problem. Whether your surcharging program charges the customer 3% or 4% on top of their bill, your fees are either at or near zero, unless you have a high value of debit transactions. Accepting debit while surcharging is where the lines tend to get blurry when they are in fact crystal clear. You are not allowed to surcharge on a debit card. Period. Like we explained in our last blog, your terminal has to be able to differentiate between a credit and debit card.

When a salesman pitches you surcharging, be sure to ask about debit pricing. In order to be in compliance with the major card brands like Visa and Mastercard, you cannot surcharge a debit card. Meaning, you have to pay for the debit transactions. Luckily, debit cards usually have the lowest interchange rates. If you are surcharging, check-in on your debit pricing program.

Closing Thoughts

Coming to a close on this series, I recommend that you pause before hastily signing up for surcharging. Make sure it is something you can see working for your business and do it the compliant way! Do not surcharge on a debit card and notify Visa and MasterCard that you are surcharging, along with the other card brands you accept. As always, remember to call MAX Pay when you need a merchant account!