Is Surcharging Right for Me?

In this article, we’ll shed light on who’s surcharging and why.  Read on to see whether surcharging fits your business and whether to dive deeper. 

Surcharging is a legal and optimal way for most merchants to make their credit card fees go to zero.  Successful surcharging merchants operate across many industries.  But they all have common reasons for why they began to surcharge.  Additionally, they or their customers exhibit similar behaviors that made surcharging the right choice. 

Surcharging Color Wheel! 

The true reasons for why merchants surcharge are not obvious.  Fortunately, the color wheel below identifies the most common reasons why merchants began surcharging.  The ends of each colored arrow show the spectrum of behaviors that drove their decision.  For example, look at the center vertical green arrow.  Some merchants felt the most credit card fee pain from one-off, COD orders.  Others felt more pain for customers on terms who receive early payment discounts.   

Alternatively, the center horizontal purple arrow shows some merchants have more pain around large customers paying by SUA cards.  Others surcharged because their small customers who needed to float credit on cards represent their largest fee pain point. 

If you have some of the same issues, surcharging may be worth exploring more deeply. 

Who is Surcharging? 

Credit card fees are a top 3 cost item for most merchants.  And that share is growing because card fees keep rising – especially for online payments which are growing rapidly post COVID.  As a result, surcharging adoption is rapidly increasing across a number of U.S. industries.  Here’s a list of several industries where surcharging is occurring today.  It’s not comprehensive, but chances are you’re not alone. 

Is surcharging right for my business? 

If you understand the pain points and fit into one of the industries above, it is likely worth exploring deeper.  First, our website and social media offer free educational resources.  Second, InterPayments offers no-strings-attached consultations and a complimentary processing statement review.  We calculate a tailored cost recovery estimate and walk you through key considerations to make the best decision.  Finally, ask us if you need to better understand the compliance implications of surcharging.  Even though InterPayments takes on your compliance liability, it’s important to understand.  We have easy-to-read, comprehensive documentation and a list of surcharging expert lawyers to aide your decision making.