Your merchants are feeling the cost of card payments every day. 

Every transaction comes with processing fees, eating into their margin. And sooner or later, many of them start asking, “Can we pass some of this cost on to the customer?”

That’s usually where credit card surcharging enters the conversation.

Surcharging can help your merchants recover payment costs, protect margins, and make more informed decisions about how they accept payments. It can also give you another way to strengthen your payments proposition and grow revenue through your platform.

But surcharging comes with important questions:

• Can your merchants surcharge in every state?
• Which card types are eligible?
• How much can they charge?
• What needs to be shown at checkout?
• How do you keep the customer experience clear, compliant, and conversion-friendly?

This guide will help you answer those questions. We’ll cover how credit card surcharging works, when it makes sense for your merchants, what compliance and customer experience risks to consider, and how to build surcharging into a stronger payments strategy for your SaaS platform.

In this article:

• What is credit card surcharging?
• When does surcharging make sense vs not?
• Is credit card surcharging allowed in the US and Canada?
• How SaaS platforms should talk to merchants about surcharging
• How Fiska helps SaaS platforms handle payment complexity

Fiska is an embedded payments solution that helps SaaS platforms turn payments into a revenue driver. Book a no-obligation call with our experts to learn how we can help you develop and execute a strong payments strategy. 

What is credit card surcharging?

Credit card surcharging allows your merchants to recover some or all of the costs associated with accepting credit card payments by charging a fee to customers who choose to pay with a credit card.

For example, if a customer makes a $100 purchase and your merchant applies a 3% surcharge for using credit cards, the customer would pay $103 at checkout. 

While surcharging can help merchants offset payment processing expenses, it’s subject to strict card network and state regulations.

Generally:

• Debit cards can’t be surcharged
• Surcharge amounts are capped by the card networks 
• Visa permits surcharges up to the merchant’s cost of acceptance or 3%, whichever is lower
• Mastercard allows surcharges up to the merchant’s cost of acceptance or 4%, whichever is lower

Merchants have a few responsibilities here: 

• Clearly disclose surcharge fees before purchase and on customer receipts
• Display signage indicating that a surcharge will be added to the sale price
• Notify the applicable card networks at least 30 days before implementing or modifying a surcharge program

 

When does surcharging make sense vs not?

Surcharging can be an effective way for your merchants to offset payment processing costs, but it isn’t the right fit for every business.

In general, surcharging makes the most sense for merchants with high credit card processing expenses, tight profit margins, or large transaction volumes where fees have a meaningful impact on profitability. 

It can be especially relevant in payment contexts where card fees are significant, transaction values are relatively high, and customers are already used to seeing payment-related fees disclosed separately. Examples include event ticketing, bill payments, B2B invoicing, professional services, tuition payments, and payments to government agencies or municipalities.

Where surcharging isn’t worth it 

It might be worth advising your merchants against surcharging if they operate in highly competitive retail environments where customers can easily shop elsewhere. Adding fees at checkout can create friction, reduce conversions, and negatively affect the overall customer experience. This is especially important for merchants whose customers are price-sensitive or where a smooth, transparent checkout experience is central to the brand. In these cases, the potential loss of sales may outweigh any savings on processing costs.

You may also want to advise your merchants to consider the compliance requirements that come with surcharging. Failure to follow card network rules could result in penalties or your merchants losing the ability to accept credit card payments. When evaluating a surcharge program, it’s important for your merchants to weigh the potential savings against both the risk of noncompliance and the impact on customer relationships.

For some merchants, cash discounting may be a better alternative. With a cash discount program, customers receive a lower price when they pay with cash or another low-cost payment method, such as ACH, rather than paying an additional fee for using a credit card.

Is credit card surcharging allowed in the US and Canada?

Credit card surcharging is permitted in both the US and Canada, but the act is subject to strict regulations, which vary by jurisdiction.

In the US, surcharging is legal in most states, although it’s prohibited in Connecticut, Massachusetts, and Maine. Colorado allows surcharging but limits the fee to 2%.

(This list may change as regulators continue to weigh in on credit card surcharging).

Merchants must also comply with card network rules, including disclosure requirements and surcharge caps.

• In Canada, credit card surcharging is generally permitted, with the exception of Quebec, where the practice is prohibited. Canadian merchants that surcharge can’t charge more than their actual cost of accepting the card and are subject to an overall maximum surcharge of 2.4%.

Because surcharge regulations can change and may vary by location, your merchants should review applicable laws and card network requirements before implementing a surcharge program.

How SaaS platforms should talk to merchants about surcharging

As a SaaS platform, you have an important role to play in helping merchants understand and implement credit card surcharging properly.

Rather than presenting surcharging as a simple way to recover payment processing costs, position it as one option within a broader payments strategy. Merchants need to balance margin protection, customer experience, and compliance.

They should also understand that surcharge rules can vary by state, country, and card network. Customer communication is especially important. If a surcharge appears unexpectedly at checkout, it can create confusion, complaints, or abandoned carts.

You can help reduce that risk by giving merchants the right tools and guidance from the start, such as:

• Educational resources
• Configurable surcharge settings
• Built-in disclosure prompts
• Clear guidance on where and how surcharge information should be displayed

For example, you may prompt merchants to include language such as:

“A 3% surcharge applies to credit card payments. This fee will be added to your total before payment is completed.”

The key is that customers should see the surcharge before they complete the transaction, ideally on the same page where they enter their payment information. The disclosure should be clearly visible and easy to understand.

You should also help merchants decide whether surcharging is actually the right fit for their business. For some, recovering card processing costs can improve margins and make operating costs more predictable. For others, especially those in highly competitive markets or serving price-sensitive customers, adding a surcharge may create more friction than value.

In those cases, merchants may be better off absorbing processing costs.

How Fiska helps SaaS platforms handle payment complexity

If you’re running a SaaS platform, payments eventually become much bigger than processing transactions. They impact your merchant experience and retention, support workload, product roadmap, and revenue potential.

We’ve spent years helping SaaS companies navigate those challenges. That’s why we built Fiska specifically for SaaS platforms that want more control over their payments strategy without taking on the operational burden that comes with it.

Unlike many payment providers, we offer a true revenue-sharing model built on transparent interchange-based pricing. That means you can clearly understand your costs, create pricing strategies that fit your business, and participate in the value your payments program generates.

Here are three ways we help SaaS platforms turn payments into a competitive advantage:

1. Navigate payments with strategic guidance from a partner invested in your growth

One of the biggest mistakes SaaS companies make is treating payments as a technical integration rather than a business strategy. As your payments volume grows, so do the decisions around things like pricing, monetization, compliance, merchant onboarding, support, and risk management. And those choices can have a direct impact on your revenue and your merchants’ experience.

That’s where we come in.

Rather than acting like another vendor, we work alongside your team to help you build a payments program that supports your business goals and growth plans. Whether you’re launching payments for the first time or looking to optimize an existing program, we help you think through everything from pricing models and merchant adoption to operational efficiency and long-term scalability.

We also take a significant amount of payments work off your plate. Our team provides Level 1 and Level 2 merchant support, helping your merchants resolve payment issues quickly without creating additional strain on your internal teams. Instead of relying on impersonal ticketing systems, you’ll have access to a dedicated team available through phone, email, and Slack.

Behind the scenes, we help manage many of the operational complexities that often slow SaaS teams down, including PCI compliance, certifications, chargebacks, and dispute management. This means you can develop a payments program that scales with your platform without needing to build a large in-house payments team.

And if you’re exploring surcharge programs for your merchants, we can help you evaluate whether they’re the right fit, navigate compliance requirements, and implement them in a way that minimizes friction for both your merchants and their customers.

2. Unlock new revenue streams with integrated payments and pricing control

For many SaaS companies, payments represent one of the largest untapped revenue opportunities within their business. The challenge isn’t simply embedding payments into your platform: it’s creating a payments strategy that gives you flexibility as your business evolves.

With Fiska, you can offer in-person, online, and mobile payments through a single integration while maintaining control over how payments are packaged, priced, and monetized. Whether you prefer interchange pass-through pricing, flat-rate pricing, or a more tailored approach based on merchant segments, you have the flexibility to structure your pricing around your goals.

Because our pricing is built on interchange, you gain more flexibility to create competitive pricing structures while generating recurring revenue as payment volume grows. Payments can be packaged in whatever way best supports your business model, whether bundled into SaaS subscriptions, offered as an add-on service, or customized by merchant segment. And because we don’t charge platform or monthly fees, you can begin generating payment revenue sooner with lower upfront operational costs.

You can also adapt your payment strategy over time without replatforming, whether that means adjusting pricing, onboarding flows, payment configurations, or merchant offerings.

And when your merchants are looking for ways to reduce payment costs, you can offer options that fit their business, including surcharge programs, ACH incentives, and other payment optimization strategies.

3. Deliver branded payment experiences with white-label infrastructure

You don’t want your merchants to think of payments as a separate product: they should see it as part of your platform.

But when onboarding flows, payment experiences, or checkout pages feel disconnected from the rest of your product, it can introduce friction and weaken the trust you’ve worked hard to build.

That’s why we give you the ability to fully own the payments experience.

Our white-label infrastructure allows you to deliver payment onboarding, processing, and checkout experiences that feel like a natural extension of your platform. Payment workflows can be customized to align with your existing product and brand, creating a more seamless experience for your merchants while reinforcing trust at every touchpoint.

This becomes especially important when your merchants implement surcharge programs. Clear disclosures and payment options need to be presented in a way that feels transparent and integrated, not disruptive. We help you maintain a cohesive checkout experience while giving your merchants the flexibility to recover payment costs and manage customer expectations effectively.

Read more: What to look for in a white-label payment solution

Activate and manage credit card surcharging for your merchants with support from Fiska

Credit card surcharging can be a powerful way for your merchants to manage rising payment processing costs, but it requires the right balance of compliance and customer experience. As a SaaS platform, the challenge isn’t just enabling surcharging – it’s doing so in a way that supports merchant success while maintaining control over your broader payments strategy.

We help SaaS platforms like yours activate and manage surcharging as part of a wider embedded payments offering. With our flexible infrastructure, transparent interchange-based pricing, and hands-on payments expertise, you can give your merchants the tools to offset costs while maintaining a smooth, compliant, and branded payment experience. 

Ready to enable surcharging for your merchants? Book a zero-obligation call to discover how we can help optimize your payments strategy. 

FAQ: Credit card surcharging for SaaS

Can SaaS platforms offer credit card surcharging to their merchants?

Yes, SaaS platforms that offer integrated payments can support merchants that want to implement credit card surcharging, provided the program complies with applicable card brand rules, card network requirements, and state or provincial credit card surcharge laws.

Many platforms choose to offer surcharging as an optional feature, allowing merchants to decide whether it aligns with their business model, customer base, and overall surcharge policies.

What are the benefits of credit card surcharging for SaaS platforms?

Offering surcharging can help SaaS platforms provide additional value to merchants by giving them a way to offset some or all of their credit card processing fees and broader payment processing fees. It can also make integrated payments more attractive to merchants, which may increase payments adoption and transaction volume.

What is an acceptable credit card surcharge?

An acceptable credit card surcharge is one that complies with card network rules and applicable regulations. In general, the surcharge rate can’t exceed the merchant’s actual cost of accepting the credit card.

Visa limits surcharges to the merchant’s processing cost or 3%, whichever is lower, while Mastercard allows surcharges up to the merchant’s processing cost or 4%, whichever is lower.

Can merchants apply surcharges to debit or prepaid cards?

No. Credit card surcharges generally apply only to credit card transactions, not debit card transactions or prepaid card transactions.

SaaS platforms should make sure their surcharge settings can distinguish between payment types so merchants do not apply a percentage-based fee where it is not permitted. This is especially important for both online transactions and point of sale payments, where customers may use several types of cards.

How should SaaS platforms help merchants manage surcharge compliance?

SaaS platforms should give merchants clear tools and guidance for configuring, disclosing, and managing surcharges. That may include configurable surcharge settings, checkout disclosure prompts, reporting, and guidance from the platform’s payment processor or merchant services provider.

Platforms should also make sure surcharge workflows fit within broader digital payments requirements, including secure handling of payment data under the Payment Card Industry Data Security Standard, commonly known as PCI DSS.

Clear disclosures can also help protect customer satisfaction by making sure customers understand any added fee before they complete payment. This also helps distinguish a credit card surcharge from a convenience fee, which may be subject to different rules.