The Credit Card Surcharge Cap, and What It Actually Covers
Fact-checked and signed by Seonrye Kim, who checks each figure against the provider's own published pricing page. · Updated 2026-09-03
Visa's published surcharge limit is the lesser of the merchant's own discount rate for that card or 3%, whichever is lowest.
Visa limits surcharging to credit cards only; debit cards and prepaid cards cannot be surcharged.
Visa's own understanding is that Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit surcharging, and that Colorado, Minnesota, New Jersey and New York have added requirements for it.
Mastercard's own Maximum Surcharge Cap is 4%.
Square's surcharge feature only works for in-person transactions on its Point of Sale, Restaurant and Retail apps, and on Square Invoices.
Visa caps a credit card surcharge at 3% of the sale; Mastercard's own limit is a point higher, at 4%. The buyer pays whichever percentage the merchant sets under that cap. But the merchant does not necessarily keep all of it — the processor's usual rate still applies to the surcharge, not just the original sale. Whether that surcharge actually covers the fee it was meant to offset depends on the sale size and which processor is running it. The rate a network allows is only the starting point. Square's own surcharge feature works only in person, so Square is shown at its in-person rate; Stripe is shown at its standard online rate.
A surcharge at Visa's cap vs. what Stripe's and Square's own fees take back, by sale size
A surcharge at Visa's cap vs. what Stripe's and Square's own fees take back, by sale size
Visa sets its own ceiling at 3% of the transaction, or the merchant's own discount rate for that card, whichever is lower. A merchant paying less than 3% to accept Visa cards cannot round up to the full 3% anyway. Mastercard runs a higher ceiling: its own Maximum Surcharge Cap is 4%. Visa limits the practice to credit cards only. Mastercard's own rules say the same thing from the other side: its fees are not allowed on Debit Mastercard or Mastercard prepaid cards.
Why the surcharge does not fully offset the fee
Take Stripe's own online rate — 2.9% plus a 30¢ fixed fee per transaction — and run it against a surcharge set at Visa's 3% cap. On a small sale, the surcharge does not fully cover Stripe's fee on the surcharged total. The fixed 30¢ portion of that fee is a much bigger share of a small charge than a large one. So the shortfall is biggest on the smallest sale, and it narrows as the sale grows. On the largest sale size, that fixed portion barely registers next to the percentage. There, the surcharge finally collects more than the fee costs, instead of falling short.
Where surcharging is restricted
Visa's own understanding is that Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit surcharging outright. Colorado, Minnesota, New Jersey and New York allow it, but only with added requirements on top of the network cap. A merchant operating in any of those places needs to confirm the current state rule before turning a surcharge on. The 3% or 4% ceiling above is a network limit, not a substitute for local law.
What decides whether a surcharge pays for itself
Where you sell. Check whether you sell in person, online, or both — the surcharge tool available to you depends on it.
What your processor supports. In person, Square's own tool covers in-person transactions at 2.6% plus 15¢, still open beta. Online, Stripe calls it generally permissible; PayPal's user agreement says it will not impose a surcharge.
What your state allows. Some states restrict or prohibit it outright — confirm your own state's rule before turning a surcharge on.
The cash-discount alternative. Visa's rules also let a merchant offer a discount or incentive for paying by another method, commonly called a cash discount. Display the card price alone, or card and cash side by side, and the surcharge cap does not apply.
FAQ
Does Square's own surcharge tool work for an online sale?
No. Square's own surcharge feature only works for in-person transactions on its Point of Sale, Restaurant and Retail apps and on Square Invoices. An online or card-not-present sale needs a different processor's tool.
Which states restrict or prohibit credit card surcharging?
Visa's own understanding is that Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico prohibit it outright. Colorado, Minnesota, New Jersey and New York allow it, but only with added requirements.
Before you rely on these numbers
Visa's own list of states that restrict or prohibit surcharging is dated to its published guidance; a state's rule can change after that date, so confirm the current law for your own state before relying on the list above.
The fee and net figures above use Stripe's and Square's own published rates on the surcharged total; a different processor charges a different rate on that same total, so its net would not match the numbers above.
The Square figures above use its Free plan's in-person rate (2.6% + 15¢); its Plus and Premium plans charge a lower percentage on the same transaction, so a merchant on one of those plans nets slightly more than the numbers shown here.
Sources
Gathered with AI assistance; every figure was checked against the linked provider page and signed off by Seonrye Kim.
Stripe's standard rate for a successful online transaction with a domestically issued card is 2.9%. — https://stripe.com/pricing (verified on: 2026-09-03)
Stripe charges a 30-cent fixed fee per successful online transaction for domestic cards, in addition to its percentage rate. — https://stripe.com/pricing (verified on: 2026-09-03)
