Pricing

Surcharging vs. Dual Pricing vs. Flat Rate, compared honestly

These three pricing models get used interchangeably in marketing, but they work differently, especially once debit cards are involved. Here's how each one actually functions.

Program 1

Compliant Credit Surcharging

A disclosed surcharge is added to credit card transactions only, within network-allowed limits. Debit cards can never legally be surcharged under this model — the merchant pays the real debit cost (typically around 1.5%).

Program 2

Dual Pricing

The business posts a cash price and a (slightly higher) card price. Because this is a price difference rather than a surcharge line item, most states' cash-discount statutes let it apply to both credit and debit — $0 processing cost to the merchant on either.

Program 3

Flat Rate

A single flat rate applies evenly to every card type and every entry method (swipe, dip, tap, or keyed), paid by the merchant — the traditional processing model, just simplified into one number.

The one thing people get wrong: debit cards

The most common misunderstanding is assuming surcharging and dual pricing work the same way for debit. They don't. Federal card network rules flatly prohibit surcharging debit transactions under a credit surcharge program — there's no legal version of "debit surcharging" under that structure, and the merchant always absorbs the real debit interchange cost there. Dual Pricing gets around this because it isn't structured as a surcharge at all — it's a price difference, which most states' cash-discount laws treat differently and permit to apply across all card types.

State law varies — check before you commit

No U.S. state currently prohibits dual pricing or cash discounting outright. A handful of states restrict credit card surcharging specifically, and that list changes as legislatures act — for example, Louisiana's Act 751 (effective August 1, 2026) specifically bans surcharging debit transactions, closing a loophole some processors were exploiting. Because these rules shift, confirm current law for your state before choosing a program, and work with a processor that builds compliance into how the program runs rather than leaving it to you.

Can debit cards be surcharged under a compliant surcharge program?

No. Card network rules prohibit surcharging debit card transactions, even under a compliant credit card surcharge program. The merchant pays the real debit interchange cost, typically around 1.5%, on debit transactions.

Does Dual Pricing cover debit cards too?

In most states, yes. Because Dual Pricing works through a cash/card price difference at the register rather than a surcharge line item, it's generally covered under states' cash-discount statutes for both credit and debit transactions — resulting in $0 processing cost to the merchant on both card types, in states where this structure is permitted.

Is surcharging or dual pricing legal in my state?

No U.S. state currently bans dual pricing or cash discounting outright. A small number of states restrict or ban credit card surcharging specifically (Connecticut and Massachusetts, as of this writing, with Massachusetts having a pending repeal bill). Louisiana's Act 751, effective August 1, 2026, specifically bans surcharging debit transactions. Always confirm current rules for your specific state before choosing a program.

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