Not long ago, it was the norm to walk around with a good amount of cash in your wallet. Merchants were obliged to go to the bank each day to stock up on the change in all the denominations, both paper, and coin. And literally, hundreds of dollars of metal change found their way out of people’s savings and into jars, drawers, and sofa cushions, all because it was too heavy and impractical to carry it around.
Slowly but surely, this paradigm is shifting. Card transactions, and now other payment types such as NFC are rapidly making it more secure and efficient to forego cash entirely. U.S. Businesses need to keep up with these emerging technologies, in addition to accepting credit cards for small businesses. While the technology is slowly but surely making ground compared to cash here in the U.S., it’s worth noting how other markets are progressing quickly but surely toward a zero-cash market: namely, China.
Possibly due to China’s very different bank regulatory environment, consumers’ unwillingness to be nickeled and dimed to death by bank fees, and the country’s unwillingness to mint huge amounts of metal currency, it means that the shift from cash is going rapidly in the Middle Kingdom. It’s being led by two of China’s biggest companies: Alibaba and Tencent, with their respective payment technologies: Alipay & WeChatPay.
Payment cards didn’t catch on in China with the fire that they did in the U.S. markets. This, combined with the rapid expansion of QR and digital wallet tech, means that there’s a comparative vacuum in payment methods, which is speeding up the adoption of the tech use, compared to the States, where payment cards are entrenched as the “normal” way to pay.
The statistics surrounding these payment methods are a little shocking. Over 90% of the Chinese population use one of the two platforms mentioned above as their primary payment method, and they have around a billion customers each.
The question turns to the U.S. Will we be following the footsteps of China, with bankless payment technologies taking over as the primary way we pay? The odds are somewhat against it. As mentioned above, bank-based systems hold a huge amount of sway, and it will take time for that perception of security to change if it ever will.
For businesses here looking to stay onboard the latest in accepting credit cards for small business, step one is making sure that you have the tech to support newer types of payment, too. After all, it may not be the go-to payment method yet for most, but each year, more consumers are electing to use mobile wallets and other payments. Do your part, and make sure that customers can pay the way they want.
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A credit card surcharge is an additional fee added to a transaction when a patient chooses to pay with a credit card. The surcharge is intended to help offset the cost of credit card processing and applies only to eligible credit card transactions.
No. Debit card transactions may not be surcharged under any circumstances, even if the debit card is processed as a credit transaction or entered manually.
Yes. Credit card surcharges may not exceed the merchant’s actual cost of accepting credit cards and are capped at a maximum of 3% of the total transaction amount, in accordance with card-network rules and applicable law.
Yes. Card networks require clear and transparent disclosure of any credit card surcharge. Practices must notify patients through appropriate signage at the practice entrance, point of sale, and anywhere payments are accepted. If payments are accepted online, the surcharge must also be clearly disclosed on the practice’s website.
Yes. Some U.S. states and territories prohibit or restrict credit card surcharging. Practices are responsible for understanding and complying with their state’s specific requirements before implementing a surcharge.
No. While Moolah provides tools and general guidance to support credit card surcharging, compliance with all applicable laws and card-network rules is the responsibility of the merchant. Moolah does not provide legal advice and assumes no liability for a merchant’s compliance.
Most major credit card networks permit surcharging when done in accordance with their rules, but additional requirements or restrictions may apply. Practices should ensure they have completed all required network notifications and disclosures prior to enabling surcharging.
Failure to comply with surcharging rules may result in card-network fines, required refunds, or other enforcement actions. Practices should ensure they fully understand all applicable requirements before applying a surcharge.
Flex does not currently offer built-in support for credit card surcharging. If a practice chooses to enroll in a surcharge plan, payments would need to be processed through Moolah’s payment platform, which is designed to support surcharging and integrates directly with Open Dental.
If you are considering introducing a credit card surcharge for your patients, it is important to understand that there are specific rules and regulations that must be followed when enrolling in and operating under a surcharge plan.
This article provides a general overview of common surcharging requirements. This content is provided for informational purposes only and does not constitute legal advice. It is the responsibility of each merchant to review, understand, and comply with all applicable laws, card-network rules, and regulatory requirements, including notification timeframes, signage requirements, surcharge percentage limits, and jurisdictions where surcharging is prohibited.
If you are unsure about the laws or regulations applicable to your practice, you should consult with qualified legal counsel. Moolah assumes no liability for a merchant’s compliance or non-compliance with credit card surcharging rules or regulations.
Transparent Communication
Card networks, including Visa, Mastercard, Discover, and American Express, require merchants to clearly and transparently disclose when a credit card surcharge is applied.
Practices must clearly notify patients of a credit card surcharge through appropriate signage placed at the practice entrance, at the point of sale or terminal, and anywhere payments are accepted. If payments are accepted online, surcharge disclosures must also be clearly visible on the practice’s website. All disclosures must inform patients that the surcharge applies only to credit card transactions.
Surcharge Limits
Credit card surcharges must comply with both card-network rules and applicable law. The surcharge amount may not exceed the merchant’s actual cost of accepting credit cards and may not exceed 3% of the total transaction amount.
Card-network rules cap credit card surcharges at 3%, meaning that if a merchant’s processing costs exceed this amount, the excess portion cannot be passed on to the patient.
Network and State Restrictions
The major credit card networks, such as Visa and Mastercard, impose specific requirements related to surcharge limits, advance notification, and disclosure.
In addition, several U.S. states and territories regulate or prohibit credit card surcharging. At the time of writing, credit card surcharging is prohibited in Connecticut, Maine, Massachusetts, and Puerto Rico. Other states, including Colorado, Minnesota, Mississippi, New Jersey, and New York, impose restrictions on surcharge amounts or require specific disclosures.
If your practice operates in a state that restricts or prohibits credit card surcharging, you must fully understand and comply with those requirements before implementing a surcharge.
Debit card transactions may never be surcharged, even if the debit card is processed as a credit transaction.
Applicability
Credit card surcharges may be applied only to credit card transactions. Other payment types, including debit cards and alternative payment methods, are not eligible for surcharging.
Regulatory Compliance
Merchants are responsible for maintaining ongoing compliance with all applicable card-network and legal requirements. This includes meeting advance notification obligations, using compliant signage and disclosures, adhering to surcharge percentage limits, and respecting jurisdiction-specific restrictions.
By following these guidelines, dental practices can implement credit card surcharging in a way that aligns with card-network rules and promotes transparency with patients. Clear and upfront communication helps maintain patient trust and supports a positive payment experience.