Is it illegal to charge merchant fees?

To navigate the intricacies of merchant fees, it is essential to differentiate between two primary categories: convenience fees and surcharges. Each type serves a distinct purpose and carries its own set of implications for businesses and consumers.

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Convenience fees are typically imposed by merchants to cover the costs associated with processing payments in alternative methods, such as credit cards or electronic fund transfers. These fees are often charged in addition to the base price of goods or services.

On the other hand, surcharges are a direct pass-through of the fees charged by payment processors to the customer. These fees are generally a percentage of the transaction amount and are intended to reflect the cost of accepting payments using certain methods.

The legality of merchant fees in most states is contingent upon adhering to the prescribed protocols established by regulatory bodies. This underscores the significance of understanding and complying with these guidelines to ensure compliance.