[01]_SCALER PAY
NY COMPLIANCE GUIDENY Credit Card Surcharge Law: What Changed in 2024
On February 11, 2024, New York reversed its long-standing surcharge prohibition — merchants can now add a credit card surcharge, but only under strict disclosure and cap rules. This page explains exactly what's legal, what isn't, and why most New York small businesses are better served by a cash discount program instead of surcharging.
[02]_WHAT CHANGED
From Prohibition to Regulated Surcharging
- 01Before February 2024 — New York was one of a small number of states with an effective ban on credit card surcharging. Merchants could offer a cash discount (a lower price for cash), but could not add a fee on top of a single posted price for card payers.
- 02February 11, 2024 — Governor Hochul signed the amendment to GBL §518 clarifying that merchants may surcharge credit card transactions, provided the total price is disclosed up front — no hidden fees added after the fact.
- 03Today — Surcharging is legal but tightly regulated: 3% cap (or actual cost, whichever is lower), credit cards only, mandatory up-front disclosure, and — separately — card network registration before a merchant can turn it on.
[03]_REQUIREMENTS
Four Rules Every NY Surcharge Must Follow
Miss any one of these and the surcharge is non-compliant — exposing the merchant to state enforcement and card network penalties.
- 013% cap — The surcharge cannot exceed 3% of the transaction, or the merchant's actual card acceptance cost — whichever is lower.
- 02Credit cards only — Debit card surcharging is illegal nationwide, New York included. A surcharge program that doesn't distinguish card types is non-compliant.
- 03Total price shown up front — The card price — surcharge included — must be disclosed before the customer pays, not added as a surprise line item afterward.
- 04Card network registration — Visa and Mastercard both require merchants to register before surcharging under their rules. This is separate from, and in addition to, state law compliance.
[04]_THE SIMPLER PATH
Why Most NY Merchants Choose Cash Discount Over Surcharging
| Requirement | Surcharging | Cash Discount |
|---|---|---|
| Applies to debit cards | No — illegal | Yes |
| Fee cap | 3% or cost, lower of the two | No statutory cap |
| Card network registration | Required | Not required |
| Disclosure | Total price up front | Dual pricing at entry + register |
Scaler Pay runs a compliant cash discount program — signage, dual pricing, and setup included — so New York merchants get the fee elimination without tracking a 3% cap or registering with card networks.
[05]_FAQ
Questions, answered.
Yes, as of February 11, 2024. New York's amended General Business Law §518 permits merchants to add a surcharge to credit card transactions, reversing the state's prior blanket prohibition. The law requires the surcharge to be clearly disclosed and the total price — including the surcharge — must be shown to the customer before payment. A merchant cannot show a lower subtotal and add the surcharge as a separate line item afterward.
The surcharge is capped at 3% of the transaction, or the merchant's actual cost of card acceptance, whichever is lower. Most card networks (Visa, Mastercard) also enforce their own surcharge caps and require advance registration before a merchant can surcharge — those network rules apply on top of the state law, not instead of it.
No. Surcharging debit card transactions remains illegal in all 50 states, including New York, regardless of the 2024 credit card surcharge law change. Only credit card transactions can carry a surcharge.
A surcharge adds a fee on top of a single posted price when a customer pays by credit card — the 2024 law change applies to this model specifically. A cash discount program instead posts one price for card payment and a lower price for cash, framing the difference as a discount rather than a fee. Cash discount programs have been unambiguously legal in New York (and all 50 states) since well before the 2024 surcharge law change, apply to both credit and debit cards, and don't carry the same per-network registration or 3% cap requirements that credit-only surcharging does.
Yes. The total price, including any surcharge, must be disclosed to the customer before the transaction is completed — at the point of entry (e.g., a sign at the door or on a menu) and again at the point of sale. Presenting a lower price and then adding the surcharge as a surprise line item on the receipt does not meet the disclosure requirement and exposes the merchant to enforcement risk.
For most small businesses, cash discount is simpler to run compliantly: one program covers all card types (credit and debit), there's no 3% cap to track, and no per-card-network registration is required. Surcharging can work for businesses that want to surcharge only credit cards and keep debit pricing flat, but it requires more careful setup — network registration, the 3% cap, and precise point-of-sale disclosure. Scaler Pay's cash discount program is built to be compliant out of the box, with signage included.
[06]_APPLY
Compliant From Day One — Apply for $0 Processing
Apply in 2 minutes. We'll call you within one business day with your rates and compliant signage details. See our New York cash discount page for full state compliance details.
Payment processing services provided through licensed processing partners. Approval subject to review. This page is general information, not legal advice — consult counsel for guidance specific to your business.