Payment Radar
Surcharging Rules are Multiplying, and ISVs Are in the Middle
Surcharging compliance for US merchants has expanded from card brand rules to a complex patchwork of state regulations, creating a challenging compliance matrix.
Payment RadarOriginal source: Digital Transactions · linked publisher media; native reuse rights require confirmation 
What changed
The regulatory landscape for surcharging has shifted from a straightforward card brand rule to a fragmented patchwork of state laws. Merchants now face a complex compliance matrix where they must adhere to both state regulations and card network rules, which change periodically. There is no unified directory of state regulations, leaving businesses to navigate this flux independently or with the help of Independent Software Vendors (ISVs) and payment partners. ISVs are third-party companies that develop and sell software applications for specific industries or business functions, often integrating payment processing capabilities.
Why a business should care
Non-compliance with surcharging regulations can result in fines, penalties, and legal liability, directly impacting merchant operations and profitability.
Who it affects
US merchants who implement or consider implementing surcharging on credit card transactions, particularly those with e-commerce operations or customers in multiple states. Industries like retail and payment processing are heavily impacted.
What to consider doing
Pull your current state-by-state surcharging compliance documentation and cross-reference it with your payment processor’s latest card network rules. If you find gaps, contact your payment partner or ISV immediately to update your surcharging program settings.
Uncertainty and risks
The lack of a unified directory and unclear enforcement actions create significant uncertainty. Merchants must actively track and comply with both state surcharging laws and card network rules to avoid fines and penalties. The regulatory landscape is expected to remain complex and fragmented, requiring ongoing vigilance. The regulatory landscape for surcharging has become more complex and fragmented, with merchants now facing a patchwork of state regulations in addition to card brand rules, increasing their compliance burden and risk of penalties. Merchants must actively track and comply with both state surcharging laws and card network rules, consult with payment partners or ISVs for guidance, and ensure their surcharging programs are compliant to avoid fines and penalties.
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