Card processing takes a few percent of every payment, and in a practice running on session fees that adds up to a real number by the end of the year. The obvious response is to pass it to the client. Whether you are allowed to depends on three separate sets of rules, and most of the advice online only mentions one of them.
This is general information rather than legal advice. Rules differ by state and province and they change, so confirm your own position before you add anything to an invoice.
Three sets of rules, all of which apply at once
A surcharge has to satisfy all three of these, not whichever is most convenient:
The card networks. Visa and Mastercard each publish their own surcharging rules, and breaking them puts your merchant account at risk.
Your state or province. Local law overrides the networks. Where the law says no, the networks' permission is irrelevant.
Your processor agreement. Your acquirer can be stricter than either, and some simply will not support surcharging.
What the card networks require
A few rules are consistent and worth knowing before you look anything else up.
Credit only. Surcharges are permitted on credit card transactions and not on debit or prepaid cards. This catches people out, because a practice taking a mix of cards cannot apply one blanket fee.
You have to tell your acquirer first. Visa's own guidance states that "Merchants must notify their acquirer 30 days before they begin surcharging." This is not optional and it is not retrospective.
You have to disclose it. The networks require the surcharge to be disclosed clearly before payment and shown as a separate line on the receipt. A fee that appears only on the final total does not satisfy this.
There is a cap, and it has moved. Both networks cap the surcharge, and the surcharge can never exceed what accepting the card actually costs you, even where the cap is higher. Published figures for the US cap have changed in recent years and sources still disagree about the current number, so take the figure from your processor or the current network rules rather than from a blog, this one included.
The United States: some states prohibit it outright
Several states bar credit card surcharges by statute. Massachusetts is the clearest to quote, at General Laws chapter 140D, section 28A:
"No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means."
Connecticut and Maine are also widely reported to prohibit surcharging, and Maine's prohibition is described as covering debit as well as credit. Other states permit it but add their own caps or disclosure requirements.
There is deliberately no state-by-state table here. The published ones disagree with each other, several are maintained by payment vendors with something to sell, and the underlying laws have been amended and in some cases struck down in court. Look up your own state's current statute, or ask your processor to confirm in writing what they support where you practise.
Canada: allowed since 2022, with a cap
Surcharging became permissible for Canadian merchants on 6 October 2022, following the settlement of a class action brought by merchants against the card networks and several banks.
The ceiling is 2.4%, published by Mastercard Canada as the maximum surcharge cap and matched in Visa Canada's merchant FAQ. As in the US, you may charge the lower of that cap or your own effective cost of accepting the card, surcharges apply to credit cards only and not to debit or prepaid, and the surcharge must be disclosed at the point of interaction and shown on the receipt.
Quebec is the exception. The province's Consumer Protection Act means the change does not apply there.
The route most practices should take instead
A discount for paying another way is treated differently from a surcharge, and it is permitted in places where a surcharge is not.
The same Massachusetts statute that bans surcharges expressly allows the discount, provided it "is offered to all prospective buyers and its availability is disclosed clearly and conspicuously."
The economics are identical and the legal treatment is not. Instead of listing a session at $120 and adding 3% for card payment, list it at $124 and offer $120 for payment by bank transfer or cash. The client pays the same either way, and the arrangement survives in states where surcharging would not.
This also avoids the administrative load: no acquirer notification, no cap to monitor, no separate receipt line, and nothing to unwind if your state changes its position.
For a lot of small practices the simplest answer of all is to build the processing cost into the rate and stop thinking about it. A few percent on a session fee is usually smaller than the price adjustment you would make for any other reason, and it costs nothing to administer.
Late fees are a different thing entirely
Late fees and card surcharges get discussed together and they have almost nothing in common. A late fee is a term of your agreement with the client, not a card network matter, so the networks' rules do not apply.
What makes a late fee enforceable in practice is disclosure in advance. The client has to have agreed to it before the invoice went unpaid, which means it belongs in the agreement they signed at intake rather than appearing for the first time on a reminder.
A workable late fee is a stated amount or percentage rather than something you decide in the moment. It starts after a defined period, such as 14 or 30 days past the due date. It is applied consistently, because a fee you waive for some clients and not others is hard to defend. And it is written in the same document as your cancellation policy, since clients meet both at the same moment.
Be realistic about the purpose. A late fee is there to make paying on time the easier option, not to earn money. If you are charging them often, the problem is usually upstream, in when and how you invoice, which our guide on getting paid faster covers.
What to put in your terms
Your payment terms should state the fee for each service, which payment methods you accept, any difference in price between them and how that difference is described, when payment is due, what happens after that date, and how much. Clients should see all of it before the first session, not after a disagreement.
Pricing it in rather than bolting it on
Most of the difficulty here comes from treating the processing cost as something separate to be recovered, rather than as a cost of doing business to be priced in. Soap Notes lets you set the price of each service directly, so whatever you decide about card costs ends up in one number the client sees up front, on an invoice that matches what they agreed to. Decide your position once, write it into your terms, and let the invoice do the rest.
