Surcharging vs. Dual Pricing: Mastering Visa Compliance in the Marketplace

Merchants are increasingly looking for ways to offset the rising costs of credit card acceptance. However, as any seasoned business owner knows, the line between a "convenience fee" and a "compliance violation" is razor-thin.

As we move through 2026, Visa has maintained strict oversight of how merchants pass costs to consumers. If you are considering Surcharging or Dual Pricing, here is your definitive guide to staying in the clear.

1. Credit Card Surcharging: The "Added Fee" Model

Surcharging is the practice of adding a specific fee (a percentage) to a transaction when a customer pays with a credit card. Because this adds to the "advertised price," Visa treats it with the highest level of scrutiny.

The Mandatory Checklist:

• 30-Day Advance Notice: You must notify your merchant acquirer (your processor) at least 30 days before you start surcharging.

• Credit Cards ONLY: It is a violation of federal law and Visa rules to surcharge debit cards or prepaid cards, even if they are run as "credit" (signature-based).

• The 3% Hard Cap: As of 2023, Visa lowered the maximum surcharge cap. You may only surcharge the lower of:

  1. Your actual merchant discount rate (MDR) for that card.

  2. A maximum of 3%.

• Point-of-Entry Disclosure: You must post clear signage at the entrance of your store (or the homepage of your website) informing customers that a surcharge applies.

• Point-of-Sale Disclosure: Another notice must be present at the register or checkout page.

• Receipt Transparency: The surcharge must be a separate line item on the receipt. It cannot be "baked into" the total price without being identified.

2. Dual Pricing: The "Choice" Model

Dual Pricing is often confused with surcharging, but from a compliance standpoint, it is handled differently. In this model, the merchant displays two distinct prices for every item: a Card Price and a Cash Price.

The Requirements:

• Explicit Pricing: You cannot simply say "Add 3% for cards" at the register or at the time of payment. To be a true Dual Pricing program, the customer must see both prices (e.g., on the menu, shelf tag, or invoice) before the transaction begins or whenever presented pricing in writing.

• No "Surprise" Fees: Because the card price is already disclosed as the "standard" price for that payment method, it isn't technically a surcharge—it's just the price of the item.

• Universal Acceptance: Unlike surcharging, Dual Pricing is generally permitted in all 50 states because it functions as a "Cash Discount" (which is protected by the Durbin Amendment).

3. Surcharging vs. Dual Pricing at a Glance

4. The Cost of Non-Compliance

Visa does not take these rules lightly. They use "mystery shoppers" and transaction data monitoring (specifically looking at Field 28 in the transaction message) to identify non-compliant merchants.

• First Violation: Usually results in a $1,000 fine and a mandatory remediation plan.

• Repeat Violations: Fines can escalate rapidly, reaching up to $150,000 for ongoing non-compliance.

• Termination: In extreme cases, your merchant account (MID) can be terminated, landing you on the MATCH list (effectively a blacklist for merchant processing).

Summary for Merchants

If you want the least amount of "compliance friction," Dual Pricing is currently the preferred path. If you prefer Surcharging, ensure your POS is hard-coded to recognize and exclude debit cards, or you will eventually face a brand audit.