Surcharge on Credit Cards

Autosphere » Mechanical » Surcharge on Credit Cards
Diane Freeman is President of the Automotive Aftermarket Retailers of Ontario (AARO). You can reach her at [email protected]

Automotive Service Providers have a new fee option.

For many consumers, automotive repairs can be expensive. As a result, many service providers are no doubt familiar with customers paying for service and repair work via credit card. That being said, how many of us are actually aware of how much it costs to process those credit card transactions?

Often, we are so busy running our businesses that we don’t always check our monthly statements to see how much we are paying for processing those credit cards.  And, depending on the card the rate can vary and end up costing you the shop owner hundreds of dollars per month.

As the result of a class action lawsuit settlement, Visa and Mastercard have agreed to allow merchants to decide if they want to pass on the cost of accepting credit cards to Canadian* customers, as of October 6, 2022, businesses can charge an additional fee at the point of sale if a customer wishes to pay by credit card.

Some things to consider

While it may seem that service providers and other businesses finally get to claw back some of those credit card transaction fees, there are some things to consider:

Firstly, which cards (product and brand) will you surcharge? You can choose to surcharge specific credit card products and brands; however, you may also need to equally surcharge other competing credit networks depending on your agreement with your acquirer. Call your acquirer to learn more.

Secondly, just how much will you surcharge customers? Surcharges are capped at 2.4% or the amount it costs you to accept those credit cards, whichever is less. This percentage or flat rate must be tied to the decision to pay with a credit card rather than the good/service. The amount you charge will be your business decision.

There’s also the question of how will you share the surcharge information with your customers. Educating your customers about this change and its impact on them will be important to mitigating any misunderstandings. You will need to create posters to meet the surcharge disclosure requirements. To save you time and money, CFIB will be creating resources for you to use.

At least 30 days before Surcharging:

  • Notify your credit card network
  • Notify your acquirer
  • Notify your clients (Optional)

When Surcharging on Credit Cards

  • Post a surcharge disclosure at the point customers enter your business or website
  • Post a surcharge amount/percentage disclosure
  • Itemize the dollar amount clearly on the customer’s receipt

Frequently asked questions

Some frequently asked questions we’ve been seeing regarding the credit card surcharge, include: 

Can you charge a fee on Interac purchases?
Yes, you can add a fee to Interac purchases.

Which credit cards can I Surcharge and How much?
Merchants can pick and choose which credit card brands or products they would like to surcharge to a maximum of 2.4%.  It will be your decision.  You may decide to only surcharge premium cards that charge your business higher fees.  The way you choose to surcharge may lower your surcharging maximum.

Brand-level surcharges will be capped at the lesser of the merchant’s average effective merchant discount rate paid to the acquirer for Credit Card acceptance or the 2.4% cap.

Product-level surcharges will be capped at the lesser of the merchant’s cost to accept that particular credit card product or the 2.4% cap.

Can I surcharge over the phone, in-person or online purchases?
Merchants can choose any or all environments in which they surcharge clients.  For example, a merchant can choose to only surcharge on online purchases.

Should I register as soon as it becomes available?
Once available, registering for surcharging will continue to be available for merchants moving forward. Should you wish to surcharge as soon as possible, please know that a 30-day customer notice period must pass before you can surcharge customers.

Who do I contact for technical issues with registering to Surcharge?
Each credit card network has set up its registration system to monitor who will begin surcharging. Please contact the credit card network and/or acquirer with whom you are registered. This will depend on the rules of your surcharging agreement

Do I charge sales tax on the surcharge?
We are still awaiting information on this. We have heard the disclosure could be as simple as a line item after the subtotal with a description indicating the amount is a surcharge.

What is the deadline to register?
There is no deadline to register, however, before implementation, there is a 30-day customer notice requirement.

On a chargeback, do surcharge fees return to the customer?
On a chargeback, the purchase amount plus the surcharge should be credited to the cardholder. On a partial chargeback, the corresponding percentage of the surcharge should be returned.

Like every new process, it will take a while for service providers and other businesses to get familiar with credit card surcharges, but as mentioned above, it’s important to educate your customers as to how and why these charges are being added, since the success of your business rests on the satisfaction of your customers. 

*Due to Consumer protection laws in Quebec, the option to surcharge will not be available to Quebec-based merchants.


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