Understanding Surcharges

A surcharge is an additional fee merchants might charge customers to help offset credit card processing costs. You can apply a surcharge to credit card transactions, but doing so requires careful attention to legal, card brand, and platform-specific requirements. This guide explains how to register, configure, and apply surcharges correctly.

Important!
Surcharges cannot be set up or applied to transactions using the Quick Charge, Invoices, or Payment Page features within Payrix Pro portal. See the Worldpay Developer Hub for surcharge setup and application instructions using the Payrix Pro API.

Surcharge Requirements

To apply surcharges, you must meet requirements from acquirers, regional laws, and card brand registration requirements.

Legal and Compliance

Applying surcharges incorrectly or in non-compliant ways can result in legal complications.

To comply with card brand and local/state laws, merchants must adhere to the following base requirements:

State Restrictions: Do not apply surcharges in states where prohibited.
Disclosure: Clearly display surcharge policies at checkout before payment.
Maximum Amount: Limit surcharges to 3% to comply with Visa and Mastercard rules.
Line Item: Show the surcharge as a separate line item on checkout and receipts.
Acquirer Registration: Contact your Partner Success Manager (PSM) to request enabling the surcharge parameter and ensure the value is properly routed to card networks as required and meets Visa requirements.

Card Brand Registration

Merchants must follow registration and implementation requirements for each card brand:

Credit Card Only: Surcharges only apply to credit cards and cannot be applied to debit cards.
Card Brand-Specific Requirements:
- Visa: Include the surcharge amount in the surcharge parameter of the POST /txns API request after contacting your PSM to enable it.
- Mastercard: Register and notify Mastercard at least 30 days before surcharging.
- Amex and Discover: No registration required.

Note
The cardholder’s surcharge can differ from the merchant’s processing fee to include markup amounts.

Platform Behavior

You and your merchants are responsible for calculating and sending the surcharge for each transaction to meet compliance requirements.

The Payrix Pro platform supports fee reporting and configuration using the API, but does not collect or apply surcharges to cardholders. Merchants must calculate surcharge amounts in basis points (bps) and add the surcharge amount to the existing total amount for the transaction API request.

Important!
Merchants are solely responsible for maintaining legal and card brand compliance. Payrix Pro does not enforce these requirements automatically.

Create a Surcharge Fee

To create a surcharge fee, you must:

Submit Mastercard’s Merchant Surcharge Disclosure Form at least 30 days before surcharging.
Contact your PSM requesting to enable the surcharge parameter to meet Visa requirements.
Use the Payrix Pro API to create a surcharge fee.
Use the Payrix Pro API to enable a credit-only fee rule required by card brands.

Result: Your surcharge fee is enabled with a credit-only rule when the surcharge is applied to adhere to card brand requirements.

Apply Your Surcharge

After enabling the surcharge parameter, you can apply your surcharge using one of the following calculation methods:

Combined: The surcharge is included in the total amount. Combined calculation reverse-calculates the surcharge fee so that the percentage is based on the original transaction amount, not the combined total. This workflow calculates the surcharge as an integrated amount as part of the original total, so the cardholder sees the intended total.
Separate: The surcharge is applied on top of the transaction amount. Separate calculation determines the surcharge fee, where the fee should be 100% of the surcharge amount. This workflow calculates the surcharge as a secondary percentage to the original total.

Important!
Both application methods require merchants to calculate and include surcharge in the total value for the API transaction. Payrix Pro does not adjust the amount sent to the cardholder.

Check a Card’s BIN

To confirm if a cardholder’s card is credit or debit, you must perform a bank issuer number (BIN) lookup.

To determine if a card is credit or debit:

Portal: Access the Payment Details tab on the Transaction Details menu for the transaction. Check the BIN Type field for Credit or Debit.
API: Use GET /txns/{id}?embed=payment.bin and check the payment.bin.type value in the response for credit or debit.

Handle Debit Cards

If you identify a payment method as Debit, you can still apply fees similar to surcharges or alert the customer that they can avoid fees by using a credit card instead of debit:

Debit-Only Fee: Create a merchant-paid debit-only fee. Do not pass the fee to the customer or pass any fee value in the API request.
Customer Alert: Prompt the customer at checkout to use a credit card to avoid debit-related fees.

Result: The customer avoids debit card fees, and the merchant pays the debit card processing fee.

Compare Fee Types

There are similar fee types related to surcharges that differ in how they are applied, calculated, and compliance requirements.

The following table outlines the key differences to help you avoid legal issues and chargebacks:

Fee Type	Applies To	Calculation	Disclosure Required	Registration Required
Surcharge	Credit card transactions only	% of Sale	Yes	Yes
Convenience Fee	Credit and signature debit	Flat amount	Yes	Sometimes
Service Fee	Specific MCCs	Flat amount	Yes	Varies

Convenience and Service Fees

Allowed only on card-not-present (CNP) transactions.
Apply to alternative payment methods that aren’t the merchant’s standard options.
The fee must be a flat amount.
Apply to credit and signature debit.
Must be disclosed before payment; the cardholder must be able to cancel.
Included in the total sale amount.

Note: Convenience Fee requirements are based on Visa’s strictest rules. Other card brands may differ.

Surcharges

Allowed on card-not-present (CNP) and card-present (CP) transactions.
Apply to credit cards only, not debit.
Must be a percentage of the sale and included in the total transaction amount.
Must be disclosed before payment; the cardholder must be able to cancel.
Requires a 30-day notice to Mastercard, Worldpay for Platforms, and/or the acquirer.
Included as part of the total sale.
Registration with Mastercard is required for merchants.
Prohibited in some states.

Important!
You cannot apply both a surcharge and a convenience fee to the same payment.

Advanced Surcharge Workflows

You can modify your surcharge workflow to best suit your business model. There are five common workflows you can use when setting up a surcharge:

Merchant Fees with Fee Scheduler: A surcharge is applied after payment capture, with the merchant retaining the full transaction amount and the Partner earning only from the surcharge minus platform fees.
Merchant Fees with Fee Listener: The surcharge is applied immediately upon payment, mirroring the Fee Scheduler flow, but triggered in real time with fee listener logic.
Surcharge with Fee Listener: A branching flow where merchant fees are applied regardless of surcharge presence, reducing merchant payout and increasing Partner earnings due to a broader fee base.
Surcharge with Fee Scheduler: A hybrid flow where both surcharge and merchant fees are applied, reducing merchant payout and providing moderate Partner earnings, despite being labeled as scheduler-driven.
Surcharge with Interchange Plus: Fees are dynamically calculated based on actual interchange rates plus a fixed markup, slightly reducing merchant payout and limiting Partner earnings due to higher processing costs.

Review the following table for additional details on advanced surcharge workflows based on how and when fees are applied:

Surcharge Workflow	Surcharge Trigger	Fee Type	Partner Impact	Merchant Impact
Merchant Fees with Fee Scheduler	On payment capture	Surcharge only	Receives surcharge minus platform fees	Full base transaction amount retained for deposit
Merchant Fees with Fee Listener	Immediate (real-time)	Surcharge only	Receives surcharge minus platform fees	Full base transaction amount retained for deposit
Surcharge with Fee Listener	Immediate (real-time)	Surcharge and merchant fee	Higher net due to larger base fee	Payout reduced based on fee configuration
Surcharge with Fee Scheduler	Immediate (hybrid logic)	Surcharge and merchant fee	Moderate net after platform fees	Payout reduced by merchant fees
Surcharge with Interchange Plus	Immediate (Interchange-based)	Interchange and flat fee	Lower net due to interchange costs	Slight payout reduction

Note
Need a custom workflow? Contact your Partner Success Manager.

Surcharge Workflow Diagrams

To help you better understand the differences between different surcharge workflows, we’ve provided an interactive diagram to visualize each processing scenario.

See the following interactive diagram for calculation details: