Kansas Becomes 46th State to Allow Businesses
to Surcharge Customer’s Credit Card Payments
Surcharging credit card transactions is an increasingly common way for firms to cover the cost of processing credit card transactions. However, there is no uniform federal regulatory regime that addresses credit card surcharging. Rather, credit card surcharging is governed by a patchwork of federal and state laws that govern whether and how firms can impose credit card surcharges. To add further complexity to this issue, recent court decisions have called into question the legality of certain state restrictions on credit card surcharge regimes.
The Kansas Federal Court has found that a state statute prohibiting businesses from imposing a surcharge on customers who pay with credit cards violates First Amendment rights of companies doing business in the state.
A U.S. District Judge said in a February 26, 2021 opinion that although the statute prohibits a surcharge, it allows sellers to offer a discount to customers who pay by cash, effectively limiting what merchants can treat as the “regular price” of an item as well as corresponding information about prices and credit card fees that can be conveyed to consumers.
Unified has partnered with D.C.-based legal firm Orrick, Herrington & Sutcliffe LLP to prepare a legal whitepaper to help you understand surcharge rules and how to surcharge legally. Request your complimentary whitepaper to continue reading about the Kansas changes regarding surcharges and how they impact your business.