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Visa's Convenience Fee Rules

Card networks like Visa®, Mastercard®, and American Express® have distinct rules for their implementation. Visa refers to this as the “Service Fee” program, while Mastercard and American Express categorize it under their broader government or education “Convenience Fee” program.

Prohibited in Face-to-Face Transactions
Visa prohibits merchants from charging a convenience fee for in-person payments.
Allowed for Alternative Payment Channels
The fee can only be assessed when offering an alternative payment method outside the merchant’s customary channels, such as mail, telephone, or eCommerce. It cannot be charged solely for card acceptance.
Transparent Disclosure
Merchants are required to clearly communicate the fee as a charge for utilizing the alternative payment channel.
Prior Notice and Cancellation Option
The convenience fee should be disclosed before the transaction is completed, allowing the cardholder the option to cancel.
Not Allowed for Exclusive Card-Not-Present (CNP) Merchants
Businesses that operate solely in a CNP environment cannot charge a convenience fee.
Must be Charged by the Merchant Providing Goods/Services
Only the merchant supplying the goods or services may charge the fee; third-party payment processors are not allowed to impose it.
Flat or Fixed Fee Requirement
The convenience fee must be a set amount, not a percentage of the total transaction.
Applies to All Payment Methods in the Same Channel
The fee must be applied uniformly across all accepted payment methods within the specified channel.
Included in the Total Transaction Amount
Visa stipulates that the convenience fee must be included with the total transaction amount and not processed separately.
Not Required on Printed Receipts
The fee does not need to be listed as a separate line item on the transaction receipt.
Prohibited on Recurring or Installment Payments
Visa does not allow a convenience fee on recurring transactions such as insurance premiums, subscriptions, membership dues, or utility bills.

Convenience Fees, Service Fees, & Surchargers
Understanding Card Fees

Businesses often charge additional fees when accepting specific payment methods, but the type of fee and its regulations vary. This page explains the differences between convenience, service, and surcharge fees. It also outlines when and how fees can be applied and provides detailed breakdowns, rules from major card networks, and compliance guidelines to help businesses navigate fee structures effectively.

Overview of Card Fees

Convenience Fees

A convenience fee is an additional charge passed on to consumers for paying for a service/product with a payment method not standard for a business. A business that traditionally accepts cash transactions but offers payors the ability to pay with a credit card can charge a convenience fee for that amenity.

Service Fees

A service fee is a convenience fee with an altered set of rules to benefit specific merchants within government and education. Unlike a convenience fee, a service fee must be applied equally across all payment methods, including credit cards, debit cards, and ACH transactions. Only businesses within these regulated industries are eligible to charge a service fee, and they must ensure compliance with industry-specific regulations.

Surcharges

A surcharge is a fee merchants charge to offset the cost of credit card processing fees. Unlike a convenience fee, which is charged for offering an alternative payment method, a surcharge is added explicitly to purchases made with a credit card. This fee cannot be applied to transactions made using debit or prepaid cards. Most businesses can implement surcharges, except in states where they are restricted or prohibited.

View Specific Card Brand Information

Convenience
Service
Surcharge

Visa’s Convenience Fee Rules

Prohibited in Face-to-Face Transactions
Visa prohibits merchants from charging a convenience fee for in-person payments.
Allowed for Alternative Payment Channels
The fee can only be assessed when offering an alternative payment method outside the merchant’s customary channels, such as mail, telephone, or eCommerce. It cannot be charged solely for card acceptance.
Transparent Disclosure
Merchants are required to clearly communicate the fee as a charge for utilizing the alternative payment channel.
Prior Notice and Cancellation Option
The convenience fee should be disclosed before the transaction is completed, allowing the cardholder the option to cancel.
Not Allowed for Exclusive Card-Not-Present (CNP) Merchants
Businesses that operate solely in a CNP environment cannot charge a convenience fee.
Must be Charged by the Merchant Providing Goods/Services
Only the merchant supplying the goods or services may charge the fee; third-party payment processors are not allowed to impose it.
Flat or Fixed Fee Requirement
The convenience fee must be a set amount, not a percentage of the total transaction.
Applies to All Payment Methods in the Same Channel
The fee must be applied uniformly across all accepted payment methods within the specified channel.
Included in the Total Transaction Amount
Visa stipulates that the convenience fee must be included with the total transaction amount and not processed separately.
Not Required on Printed Receipts
The fee does not need to be listed as a separate line item on the transaction receipt.
Prohibited on Recurring or Installment Payments
Visa does not allow a convenience fee on recurring transactions such as insurance premiums, subscriptions, membership dues, or utility bills.

Visa’s Service Fee Rules

Visa’s Service Fee program differs from its general convenience fee rules by requiring merchant registration, allowing fees for face-to-face and recurring transactions, and permitting greater flexibility in the fee structure (flat, percentage, or tiered). Additionally, only specific merchant categories are eligible to participate, and fees must be handled differently depending on whether a third-party processor is used. Merchants must ensure compliance with Visa regulations and applicable laws.
Merchant Registration Required
Unlike the general convenience fee, participation in Visa’s Service Fee program mandates prior registration.
Legal Compliance
Merchants must verify state and local regulations, as some jurisdictions may prohibit service fees.
Clear Disclosure to Cardholders
Merchants must inform customers that the fee is a charge for an alternative payment channel and ensure transparency before completing the transaction.
Prior Notice and Cancellation Option
Cardholders must be notified of the fee before the transaction is finalized and given the opportunity to cancel.
Limited to Certain Merchant Categories
Only specific categories, such as colleges/universities, court fines, government fees, and taxes, are eligible to charge a service fee.
Allowed in Various Payment Scenarios
The fee can be charged on in-person payments, recurring and installment transactions, insurance premiums, subscriptions, membership dues, and utility bills.
Processing Requirements Vary by Transaction Type
If a third party is charging the service fee for a card-not-present (CNP) transaction, the fee and payment must be processed as two separate transactions. In all other cases, the fee can be included as part of a single transaction.
Flexible Fee Structure
Depending on the transaction amount, the service fee may be flat, percentage-based, or tiered. It is variable for consumer credit and commercial transactions.
Charged by Merchant or Third-Party Provider
Unlike general convenience fees, service fees may be assessed by the merchant or an authorized third-party service provider.
May Vary by Payment Method
The service fee can differ based on the payment type, such as credit cards, debit cards, ACH, or eChecks.
Not Required on Printed Receipts
The service fee does not need to be itemized on transaction receipts.
Uniform Fees Across Card Brands
The service fee must be the same for all consumer and commercial cards, regardless of the card brand (e.g., Visa, Mastercard, Discover).
Service Fees May Differ Across Payment Channels
Service fees can vary depending on the payment method used, such as web, phone, or point-of-sale (POS) transactions.

Visa’s Surcharge Rules

Merchant Notification Requirements
Merchants must notify their acquiring bank at least 30 days before they begin surcharging.
Surcharge Limits
The surcharge amount cannot exceed 3%, even if the merchant’s average discount rate is higher.
Card Type Restrictions
Merchants cannot surcharge debit (Signature or PIN) or prepaid card transactions.
Industry and Merchant Eligibility
Unlike convenience or service fees, surcharges can be assessed across all industries without merchant category code (MCC) restrictions. State and local laws may prohibit surcharges, so merchants must consult legal counsel before implementing them.
Surcharging Credit Cards in the U.S.
U.S. merchants can apply surcharges at either:  Brand level: A single surcharge applied equally to all Visa credit cards, up to the maximum allowed. Product level: A surcharge applied to a specific Visa credit card product, up to that product’s surcharge cap.
Level Playing Field Rule
If a merchant accepts a competing credit card brand that is more expensive than Visa or restricts surcharging, the merchant can only surcharge Visa in the same manner that competing brand allows. If a competing credit card brand prohibits surcharges in certain channels (e.g., in-store or online), the merchant may not surcharge Visa unless it also surcharges that competing brand, regardless of cost.
Authorization and Settlement Compliance
The surcharge amount must be included in both the Network Authorization Request and Settlement to ensure compliance with Visa’s processing rules.
Surcharge Disclosure and Transaction Processing
The surcharge must be included in the total transaction amount (processed as a single transaction). Merchants must clearly notify customers about surcharge fees before payment. Receipts must display the surcharge fee for both in-store and online transactions.
Geographic and Card Network Restrictions
Surcharges can only be applied to U.S. cardholders (Visa, Mastercard, Discover, and Amex) for both card-present (CP) and card-not-present (CNP) transactions. Visa prohibits surcharging outside the U.S., unless local laws explicitly allow it.
Credit/Refund Transactions
If a transaction is refunded, the surcharge must also be refunded to the customer.
Convenience
Service
Surcharge

Mastercard’s Convenience Fee Rules

Eligibility and Purpose of the Fee
The fee can be charged when offering a bona fide convenience through an alternative payment channel, such as mail, telephone, or eCommerce.
Broad Applicability Across Payment Types
Unlike Visa’s convenience fee rules, Mastercard allows the convenience fee on in-person payments, card-not-present (CNP) transactions, and recurring/installment transactions.
Legal and Industry Compliance
State and local laws may prohibit convenience fees, so merchants must consult legal counsel before applying them.
Clear Disclosure and Customer Rights
The fee must be transparently disclosed to the cardholder as a charge for using the alternative payment channel.
Fee Consistency Across Payment Channels
The convenience fee must be the same across all accepted forms of payment within the designated payment channel.
Who Can Charge the Fee
The fee can be assessed by either the merchant directly or a third-party service provider that delivers goods or services to the cardholder.
Fee Structure Options
Mastercard offers flexibility in fee calculation, allowing the fee to be: A flat amount, a percentage of the transaction amount, or tiered based on transaction amount.
Transaction Processing Options
The convenience fee can be included as part of a single transaction or submitted separately as two transactions.
Receipt and Processing Requirements
The convenience fee is not required to be printed on the transaction receipt.

Mastercard’s Convenience Fee Rules for Education and Government Entities

No Registration Requirement
Merchants do not need to register to participate in this program.
Legal and Industry Compliance
State and local laws may prohibit the assessment of convenience fees, so merchants should consult legal counsel before implementing them. Merchants in specific industry categories can only charge the fee, including Elementary Schools, Colleges/Universities, Court Fines, Miscellaneous Government, and Tax Payments.
Transaction and Payment Applicability
The convenience fee applies to all transaction types, including in-person payments, mail orders/telephone orders, internet transactions, kiosk payments, recurring transactions, and installment transactions.
Fee Disclosure and Transparency
The convenience fee must be clearly disclosed to the cardholder as a charge for using an alternative payment channel. Merchants must inform customers about the fee before completing the transaction, allowing them to cancel if they choose.
Fee Structure and Restrictions
The fee can be structured in multiple ways, including a flat fee, a percentage-based fee, and a tiered fee based on the transaction amount. The convenience fee cannot be higher than any other card-based payment fee charged by the merchant.
Transaction Processing Flexibility
The convenience fee can be processed as part of the main transaction or as a separate transaction. Mastercard highly recommends processing the fee as a separate transaction for better tracking and reporting for education and government entities.
Customization Based on Payment Type and Channel
The convenience fee may vary across different payment methods, such as consumer debit cards vs. commercial debit cards and consumer credit cards vs. commercial credit cards.
Receipt and Processing Guidelines
The convenience fee is not required to be printed on the transaction receipt. Merchants can charge the fee directly or use a third-party service provider to process it on their behalf.

Mastercard’s Surcharge Rules

Notification Requirements
Merchants must notify both Mastercard and their acquiring bank at least 30 days before implementing a surcharge and ensure compliance with state and local laws that may prohibit surcharges.
Surcharge Eligibility and Application
Surcharges can only be applied to Mastercard Credit Cards and cannot be imposed on debit, prepaid, or PIN transactions.
Surcharging Methods
Merchants can apply a brand-level surcharge to all Mastercard Credit Cards or a product-level surcharge to specific Mastercard Credit Card products, ensuring compliance with surcharge caps.
Level Playing Field Restrictions
If a merchant accepts a competing credit card brand with higher fees or surcharge restrictions, the same rules must apply to Mastercard to maintain fairness.
Disclosure and Customer Notification
Merchants must clearly notify customers of surcharges before payment, posting notices at the store entrance, point of sale, or online checkout pages.
Processing and Refund Requirements
The surcharge must be included in the total transaction amount, listed on receipts, and refunded if the transaction is reversed.
Surcharging Restrictions by Geography
Surcharges can only be applied to U.S. cardholders and are prohibited outside the U.S. unless explicitly allowed by local law.
Convenience
Service
Surcharge

Discover’s Convenience Fee Rules

Discover has not released detailed guidelines for managing convenience fees when processing transactions with a Discover card. Below is a list of recommended guidelines to follow:

No Registration Required
Merchants do not need to register to charge a convenience fee under the general rules.
State and Local Laws
State and/or local laws may prohibit merchants from charging convenience fees, and merchants should consult with legal counsel to ensure compliance with any applicable restrictions.
Fee Applicability
The convenience fee can be applied to in-person payments and recurring/installment payment transactions, such as insurance premiums, subscriptions, and utility charges.
Alternative Payment Channels
The convenience fee can be charged for a bona fide convenience when using alternative payment channels outside the merchant's customary payment methods, such as mail, telephone, or eCommerce. However, this fee cannot be charged solely for the card's acceptance.
Clear Disclosure
The convenience fee must be clearly disclosed to the cardholder as a charge for using an alternative payment channel, ensuring transparency.
Pre-Transaction Disclosure
The convenience fee must be disclosed before the transaction is completed, and the cardholder must be given the opportunity to cancel it.
Fee on All Transactions
The convenience fee can be charged for any type of transaction, whether it is in-person, Mail Order/Telephone Order, online, or kiosk-based.
Charged by Merchant or Third-Party
he fee can be charged either by the merchant directly or by a third-party service provider offering goods or services to the cardholder.
Fee Structure
The convenience fee must be a flat or fixed amount, regardless of the payment amount due. It should apply equally to all forms of payment accepted within the payment channel.
Included in Total Transaction
The convenience fee must be included in the total transaction amount, combined into a single transaction.
No Receipt Requirement
The convenience fee does not need to be printed on the transaction receipt.
Recurring and Installment Transactions
The convenience fee can also apply to recurring or installment payments, such as those for insurance premiums, subscriptions, internet service fees, membership dues, and utility charges.

Discover’s Convenience Fee Rules for Education and Government Entities

Discover has not released detailed guidelines for managing convenience fees when processing transactions with a Discover card. Below is a list of recommended guidelines to follow:

Discover’s Surcharge Rules

Surcharge Limitations
Merchants may assess a surcharge on card sales only if the surcharge amount does not exceed the merchant fee paid to Discover for the card sale or the merchant consistently applies surcharges across all card sales, including credit, debit, and prepaid cards accepted by the merchant.
State and Local Laws
State and/or local laws may prohibit merchants from assessing surcharge fees. Merchants should consult with their legal counsel to ensure compliance with local regulations.
Merchant Category Codes
Merchants in various categories may assess surcharges, with no industry restrictions.
Notification Requirement
Merchants must notify Discover and their acquirer at least 30 days before beginning to surcharge.
Applicable Transactions
Surcharge fees can be assessed on Card-Present (CP) and Card-Not-Present (CNP) transactions.
Surcharge Amount Limit
The surcharge amount may not exceed the cost of acceptance for the card sale
Equal Surcharge Application
The surcharge must be applied equally across all sales using the same type of card (credit, debit, prepaid) or any payment methods operating on other payment networks.
Transaction Inclusion
The surcharge must be included in the total amount of the transaction, combined into a single transaction.
Customer Notification
Merchants must notify customers about the surcharge before payment is made. This notice must be posted at the store entrance and point of sale. It must be displayed on the first page referencing credit card brands in an online environment.
Surcharge Disclosure
The surcharge dollar amount must be disclosed as a separate line item. It must appear after the transaction subtotal but before the total amount of the card sale.
Authorization and Settlement
The surcharge amount must be included in the Network Authorization Request and in the Settlement.
Convenience
Service
Surcharge

Amex’s Convenience Fee Rules

No Registration Required
Under American Express's general rules, Merchants do not need to register to charge a convenience fee but must follow card brand regulations.
Legal Compliance
State and local laws may prohibit convenience fees, so merchants should consult legal counsel for compliance.
Merchant Eligibility
Merchants can charge convenience fees across most merchant category codes.
Clear Disclosure
The convenience fee must be clearly disclosed as a charge for the alternative payment channel and must be communicated before transaction completion, allowing the cardholder to cancel if desired.
Consistent Fee Application
The fee must be the same across all applicable payment methods in the payment channel.
Transaction Types
Merchants may charge convenience fees for in-person payments and recurring/installment transactions, including insurance premiums, subscriptions, internet services, membership dues, and utility charges.
Processing Options
The fee can be combined into one transaction or submitted separately.
Fee Structure
Depending on the transaction amount, the convenience fee can be a flat fee, a percentage-based fee, or a tiered fee.
Receipt Requirements
Merchants are not required to print the convenience fee on the transaction receipt.
Who Can Charge the Fee
Either the merchant or an authorized third-party service provider may assess the convenience fee when providing goods or services to the cardholder.

Amex’s Convenience Fee Rules for Education and Government Entities

No Registration Required
Merchants participating in the Education and Government Convenience Fee Program must not register but comply with American Express card brand rules.
Legal Restrictions
State and local laws may prohibit convenience fees, so merchants should consult legal counsel before implementing fees.
Eligible Merchants
Only a limited number of merchants in specific category codes may charge a convenience fee, including schools, colleges/universities, court fines, and miscellaneous government agencies.
Clear Disclosure
The convenience fee must be clearly disclosed as a charge for alternative payment channel convenience. The cardholder must be notified before the transaction is completed and have the option to cancel.
Consistent Fee Application
The convenience fee must be the same for all accepted forms of payment within the applicable payment channel.
Transaction Types
The fee can be charged on in-person payments and recurring/installment transactions, including charges like insurance premiums, subscriptions, internet services, membership dues, and utility fees.
Separate Charge Requirement
The convenience fee must appear as a separate charge on the cardmember’s statement. Merchants must obtain separate authorizations and approval codes for both the payment charge and the convenience fee.
Fee Structure
The fee can be assessed as a flat amount, percentage, or fixed amount based on the transaction value.
Receipt Requirements
Merchants are not required to print the convenience fee on the transaction receipt.
Who Can Charge the Fee
The convenience fee may be charged by either the merchant or an authorized third-party service provider that delivers goods or services to the cardholder.

Amex’s Surcharge Rules

Surcharge Calculation
Merchants must calculate the surcharge fee based on their effective transaction rate, which is the total fees incurred for accepting all credit card types, averaged per transaction. The effective rate can be determined using data from the previous 12 months or the last 30 days.
Equal Treatment Requirement
Merchants must not impose any restrictions, conditions, disadvantages, or fees on American Express that are not equally imposed on all other payment products, except for electronic funds transfers, cash, or checks.
Consistent Surcharge Across Brands
Merchants cannot apply a higher surcharge to American Express than to other card brands. Even if American Express interchange rates are higher than Visa or Mastercard, the same surcharge percentage must be applied to all card types.
Challenges in Implementing Surcharges
Some merchants may have difficulty properly calculating the effective transaction rate to set the surcharge. High interchange rates for different card brands and transactions may also create compliance challenges.
Processor Limitations
In some cases, payment processors may not allow merchants to accept American Express if they wish to impose surcharges on other card types, as this could violate American Express Surcharge Rules.

Quick Facts

Convenience & Service
Surcharge
Convenience fees and service fees: Key differences

The main difference is that service fees are limited to particular government and education merchants. If you are building technology for one of these industries, contact our knowledgeable staff to discuss service fees in greater detail.

MCCs eligible for service fees

9311, 8244, 8249, 8220, 9211, 9222, 9399 and 8211. Merchants must be registered.

What it means to assess a fee

In this context, “assess” means to impose, apply, or charge a fee. When a merchant “assesses” a fee, they apply an additional charge to a transaction.

Who can assess a convenience fee

Any merchant can assess (charge) a convenience fee if the fee is for the convenience of using an alternative payment channel other than the merchant’s usual payment method.

Convenience fees for in-person payments or recurring transactions

Merchants cannot assess a general convenience fee. However, eligible government or education merchants can apply a service fee to in-person and/or recurring transactions.

Convenience fees across various payment channels

Convenience fees can be applied differently across various payment channels.

Fee structure: Convenience fee

General convenience fees must be fixed or flat. They cannot be a percentage of the transaction.

Fee structure: Service fee

Government and Education merchants eligible for service fees can set their fees as a flat amount, a percentage of the transaction amount, or a tiered amount based on the transaction total.

Determining the flat or fixed amount

The merchant decides the fee amount, but it must be the same for all transactions within the applicable alternative payment channel. In addition, some card networks may impose specific limits or guidelines on the fee amount, and state and/or local jurisdictions may prohibit or limit convenience fees.

Convenience fees for online-only merchants

Online-only merchants cannot assess a convenience fee.

Convenience fees for third-party service providers

For general convenience fees, third-party services cannot assess a convenience fee. For service fees, they can.

Assessing a convenience fee and a surcharge

Merchants cannot assess a convenience fee and a surcharge simultaneously.

Convenience fees and surcharges: Key differences

A convenience fee is an additional cost for the convenience of accepting a payment method different than what a merchant typically accepts. The surcharge often covers the merchant service charge.

What a merchant must do before assessing surcharge fees

Merchants choosing to apply a surcharge to payment transactions should consult their merchant services aquirer for details on the surcharge program.

How much a merchant can surcharge?

A surcharge cannot exceed the merchant discount rate for the applicable credit card transactions or three percent of the total transaction.

How the surcharge rate is determined for a brand-level surcharge on cards

The surcharge rate is calculated by adding the average effective interchange rate to the average of all fees charged by the card network and acquirer over the past one or twelve months.

How the surcharge cap is determined

If the merchant decides to apply a surcharge at the product level, they must determine the surcharge cap for that specific product type by referencing the merchant’s discount rate for the applicable credit card product. If surcharging is done at this level, the surcharge amount must remain consistent across all credit cards within the chosen product type.

Surcharging debit cards

A surcharge cannot be applied to debit card transactions, even if the payor chooses “credit” at the point of sale.

How merchants determine which credit cards to assess the surcharge

Merchants can add a surcharge at the brand level for all transactions or the product level, but not both.

Assessing a surcharge to card present transactions

Surcharges may be applied to card-present and card-not-present transactions.

Surcharge for Non-US merchants

Surcharging is only available for U.S. merchants. Non-U.S. merchants may not assess a surcharge.

If a state restricts surcharging, can merchants with additional locations outside that state assess a surcharge?

If a state restricts surcharging, merchants with locations outside that state may assess a surcharge at those additional locations.

Surcharges and refunds or chargebacks

If a transaction is reversed, the surcharge must be credited to the cardholder along with the purchase amount.

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Support Team

To further learn about card fees and compliance, we recommend you contact our knowledgable support team.

support@paytheory.com

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