Visa-Compliant Surcharging vs. Dual Pricing: A Clear Guide for Business Owners

If your business accepts card payments, you’ve probably heard about surcharging and dual pricing. Both methods can help you manage credit card processing costs, but understanding their differences—and staying compliant with Visa regulations—is critical.

Let’s break it down simply and help you decide what’s best for your business.

What is Surcharging?

Surcharging is when you add a fee to a customer’s bill if they choose to pay with a credit card. It’s a way to pass along some of the processing fees charged by card companies.

However, Visa has strict guidelines you must follow:

1. Transparency: The surcharge must be clearly displayed on the receipt as a separate line item.
2. Limitations: The surcharge cannot exceed 3% of the transaction amount.
3. Consistency: It must apply equally to all credit card brands (Visa, Mastercard, etc.) you accept.
4. No Debit or Prepaid Cards: Surcharges are strictly prohibited on debit or prepaid card transactions.
5. State Laws: Some states restrict or prohibit surcharging altogether. Always check your local regulations.

Pro Tip: Unsure about your state’s laws? Contact us at admin@simpleclearpayments.com. We’ll make sure you’re fully informed.

What is Dual Pricing?

Dual Pricing is a simpler approach where you display two prices for every product or service:

• A cash price (lower)
• A card price (higher, to account for card processing costs)

This method is common at gas stations, where you see both prices on the main signage.

Why Businesses Love Dual Pricing:

1. Clarity: Customers immediately see the difference between paying cash or card.
2. Simplicity: No extra fees at checkout—just clear pricing from the start.
3. Flexibility: Dual pricing applies to all card types (credit, debit, or prepaid) without singling out specific brands.

Surcharging vs. Dual Pricing: Which One Fits Your Business?

Here’s a quick comparison to help you decide:

Benefits of Surcharging

✅ Offsets Credit Card Fees: Passes some transaction costs to credit card users.
✅ Flexible: You can adjust the surcharge amount (up to 3%).

Drawbacks of Surcharging:
⚠️ Complex Regulations: Requires careful compliance with Visa rules and state laws.
⚠️ Customer Perception: Some customers may see it as an “extra fee.”

Benefits of Dual Pricing

✅ Offsets All Fees: Helps recover costs for processing all card types, including debit.
✅ Maximum Savings: Card prices can be optimized to cover your full processing expenses.
✅ Customer-Friendly: Pricing differences are clear and upfront.
✅ Simple & Compliant: Easy to implement without navigating complex regulations.

So, What’s the Best Option?

Both surcharging and dual pricing can save you money, but the right choice depends on:

• Your business model
• Your customers’ payment preferences
• Your comfort with navigating regulations

At Simple Clear Payments, we specialize in compliant surcharging and dual pricing solutions tailored to your needs.

Not sure where to start? Contact us today at admin@simpleclearpayments.com. We’ll help you determine the best way to save on card processing costs and keep your business thriving.

Stay informed. Keep saving. Grow with confidence.

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