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The Truth Behind Free Credit Card Processing

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Frank Kehl

Frank Kehl

Frank Kehl has been writing about merchant services, payment gateways, and international money transfer services since 2015. He has a Bachelor of Science degree from Penn State and a Juris Doctorate from the Ventura College of Law. After a long and enjoyable career of traveling around the world as an Air Force navigator, he’s comfortably settled down in the wine country town of Paso Robles in California’s scenic Central Coast region. He enjoys reading, photography, hiking, and numerous other outdoor pursuits.
Frank Kehl
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    Great article ! I’ve been selling SLICE zero fee processing for a few months. . Your article says Maine does not allow surcharging is that still the case?

      Jessica Dinsmore

      Hi Damion,

      According to the SLICE website, Maine still prohibits surcharges:

      Me. Rev. Stat. Ann. tit. 9-A, §8-509

      1. Surcharge prohibited. A seller in a sales transaction may not impose a surcharge on a cardholder who elects to use a credit card or debit card in lieu of payment by cash, check or similar means. For purposes of this section, “surcharge” means any means of increasing the regular price to a cardholder that is not imposed on a customer paying by cash, check or similar means. A discount or reduction from the regular price is not a surcharge.


        How are you liking slice? I’m thinking about joining.

          Glenn C. Johnson

          Is Slice working out for you, I’m just trying to find out if they are really as good as I was told. Please let me know, thanks !

            Deni A Celley

            I was wondering if you’ve ever heard of ReversePOS and Virtual Merchant Solutions? I’ve signed up as a rep but getting worried, especially after reading this. 😬

              Jessica Dinsmore

              Hi Deni,

              Unfortunately we haven’t yet reviewed either one of those providers, so we can’t confidently give an assessment one way or another. But we wish you the best in your decision!

                Landon Stewart

                I also just signed with reverse pos. How has your experience been so far, Deni? Articles like this have got me worried, too.

                  Greg Narez

                  The local bar in Illinois just started these surcharges. (4%) My question is, they ad the surcharge, instead of advertising a cash discount. The receipt says cash price and cc price. But the menus are supposedly the cash price. I though they were suppose to advertise the regular price with 4% added, then give you a 4% discount. They also charge this fee on debit cards. The Company set this up for them is KrullStone Partners LLC (251) 270-7173 Do you know which system they sell? With all the litigation going on, hard to tell what is legal. Doesn’t your merchant agreement prevail since the legal aspect is in limbo? Or are they operating from the consent agreement, not to charge debit cards a fee, and/or over 4% or actual cost which ever is less etc.

                    Jessica Dinsmore

                    Hi Greg,

                    Thanks for writing! Merchants in Illinois are generally allowed to add surcharges of up to 4% for credit card purchases. However, there are a lot of caveats and procedures they have to follow. I’d recommend consulting with an Illinois attorney for the latest legal requirements. A merchant agreement would never take precedence over the law, even if it is a little unsettled. While the legal basis for surcharging appears to be solidifying in favor of allowing the practice, we still don’t recommend it for most merchants due to the potential for lost sales from customers who don’t want to pay extra just to use their credit cards. I hope that helps answer your query!


                      What is the law regarding signage?
                      How big is the sign , where is it placed, do you have to point it out, do you have to verbalize the text of the signage?

                        Jessica Dinsmore

                        Hi Tod,

                        The legal requirements for signage are going to vary by jurisdiction, so you’ll have to either look up the law for your state online or consult an attorney for specific requirements.

                          Mike Ryan

                          Very informative thanks! Any updates forthcoming? We heard that in NY State it’s legal now. We also heard it’s for credit cards only not debit cards. Any info on that?

                            Frank Kehl


                            New York’s state law banning surcharging is still on the books, but it took a serious blow at the US Supreme Court last year. That decision and other, more recent ones from several Courts of Appeal suggest that anti-surcharging laws are probably going to be barred on constitutional grounds sometime in the near future. We’ll update the article when the issue is settled. While a decision on anti-surcharging laws affects both credit and debit cards, the fees for processing debit transactions are usually so low that they’re treated the same as paying with checks or cash. I expect that even if these laws are eventually thrown out, most merchants will choose to “adjust” their prices rather than impose a surcharge on their customers directly.


                              Raising your prices just raises your processing fees leaving a gap between the “increase” from sales and the actual fee which would still be paid by the merchant . Raising prices doesn’t seem to be a great solution…rather just more fees

                                Jason Perry

                                Dujeluri, how right you are. Not to mention that with ‘price adjustment’, my customers all pay the same amount whether cash, credit or debit, which penalizes my cash customers. They will have to ‘share’ the cost of my credit card customers. I like CardX’s ZeroCost solution but I never see a review for them. It’s almost as if Merchant Maverick is ‘in bed’ with it’s reviewees/partners. I’m not too sure on the validity of the reviews when the company who went before the US Supreme court on behalf of merchants everywhere is not even mentioned. Hmmm, I will keep checking. P.S. It’s okay to have a credit card fee in Florida too, FYI 🙂


                                  Just a question on how surcharging and cash discount differ? I mean it sounds like it is splitting hairs legally, but in theory a state would allow cash discounting, which would get around surcharging, yes?

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