KEN KIRSCHENBAUM, ESQ
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Comments on surcharging credit cards / Party Invite / meetings today at ISC
November 19, 2025
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You're invited: K&K 2025 HOLIDAY PARTY WILL BE ON DECEMBER 4, 2025 6 PM Old Westbury, NY [presently, I'll let you know if the location changes]. RSVP only if coming with Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Diana Henriquez at 516 747 6700 x 328 or email dhenriquez@kirschenbaumesq.com. Space limited so be sure to RSVP if coming asap
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Comments on surcharging credit cards from article on November 7, 2025
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Ken,
As a company who deals with surcharging on a daily basis he is what we have found/seen.
We have seen surcharging becoming a very important issue for our customers and we have taken steps to make sure it is as easy (and legal) as possible to do it right. Automating much of the process—like adding a surcharge fee to credit card payments online automatically (depending on state laws) or allowing dealers to set limits on what would meet the threshold of a surcharge—has helped many alarm dealers recover lost revenue on fees that the customer is choosing to place on them. Not to mention having it automated allows for very easy reporting so that you know what is being recovered.
The key takeaway for every business remains the same: the surcharge cannot be a profit center—it must be clearly disclosed and not exceed your actual cost of acceptance (generally capped at 3% to 4% by card networks).
Many alarm dealers have successfully navigated this challenge through other means as well. This includes raising their flat rates across the board to absorb the cost (even a simple $1.00 - $3.00 increase on your recurring can help outweigh the fees), or implementing the "cash discount" model to stay compliant in restrictive states. These methods are less disruptive to the customer and gives you more flexibility to possibly make a profit unlike surcharging a merchant fee where you are limited. Our system also allows for automatic and mass rate increases to stay on top of any increase in your merchant fee.
Handling payment processing fees is a major challenge that requires a nuanced, state-specific approach. While the federal court ruling in Florida gives businesses more freedom to apply a surcharge (provided they disclose it and don't profit from it), the rules are far from uniform nationwide. Anyone who is doing billing needs to know their state or states laws and follow them to the letter and they should ALWAYS do the research on what is legal and illegal.
For example, states like New York recently clarified their law to essentially require a "cash discount" or two-tier pricing model, meaning businesses must advertise the higher credit card price upfront or clearly post both the credit and cash prices. They cannot simply add a percentage surcharge at the register. (This is where a tool like across-the-board rate management can offset the costs.) Other states, like Colorado, have specific caps, limiting the surcharge to around 2% or the actual cost. It’s a hornet's nest for sure, but we’re handling it well.
Cheers,
Shea Tilton
Cornerstone Billing Solutions
224-577-1197 - Office
315-236-2103 – Cell
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another comment
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Ken,
Your recent response to George about credit card surcharging caught my attention. In addition to the state-by-state compliance issues, there are card network policy issues that conflict, making it nearly impossible to comply with all rules simultaneously.
At our Build25 user conference in Baltimore this October, the topic of credit card processing fees and surcharges generated plenty of conversation. Companies are understandably looking for ways to offset the 2-3.5% they pay on every card transaction.
Following the 2024 Visa-Mastercard settlement, merchants can now surcharge credit card transactions to recover processing costs. Sounds straightforward, right? Add a fee, offset your costs, and move on. But here's where it gets complicated.
First, there's the fact that state-by-state regulations change what is permitted and how. If you operate in a couple of states that happen to be permissive around surcharging credit cards, this issue should be simple. But looking beyond this at the national landscape, there are contradictory rules. Visa and Mastercard allow surcharging on credit cards with a 3-4% cap. Federal law prohibits surcharging debit cards, even when run as credit. And American Express requires equal treatment across all payment products, including debit cards.
These rules appear to contradict each other. If you surcharge Visa and Mastercard credit cards but not debit cards as federal law requires, American Express's non-discrimination policy seems to prohibit accepting their cards. If you accept American Express and want to surcharge, you'd need to surcharge debit cards equally, which federal law prohibits.
There are more questions than answers right now. What are the actual penalties for non-compliance? How actively are card networks monitoring surcharge programs? What happens if you get it wrong? Will you lose the ability to process credit cards on a network completely? Can you obtain waivers from American Express? Do you always know if a Visa or Mastercard is a credit card or a debit card?
Five jurisdictions still prohibit surcharging entirely: California, Connecticut, Massachusetts, Maine, and Puerto Rico, though Oklahoma just legalized it in November 2025. New York permits it but has very specific requirements that you need to take into account not only on your invoices but also on how you present your proposals. How do multi-state businesses navigate this patchwork? And importantly, how are other security companies actually implementing surcharges? What's working? What's creating problems?
These aren't rhetorical questions. We genuinely don't have complete answers yet, and we're concerned about recommending a path or implementing a technical solution that could expose our customers to compliance risks or penalties.
While we're still working through the credit card surcharge puzzle, there's a solution that benefits everyone and involves zero compliance headaches: ACH payments. ACH transactions cost merchants a fraction of the 2-3.5% for credit cards. Better yet, lower costs for you means better margins or the ability to pass savings to customers. Lower costs for customers means better relationships and competitive pricing. There are no surcharge disclosure requirements to navigate, no card network policy conflicts to reconcile, and better cash flow with predictable payment timing for recurring services. For recurring monthly monitoring and RMR, ACH is particularly well-suited.
We're not giving up on understanding the credit card surcharge question. We're consulting with payment industry legal experts, monitoring how card networks respond to early adopters, tracking state law changes, and gathering real-world feedback from the security industry. But in the meantime, we're focusing on helping security dealers implement ACH payment strategies that deliver immediate savings without compliance uncertainty.
Would appreciate your thoughts on whether you've heard of dealers encountering issues with their surcharge programs, particularly around American Express compliance and enforcement.
FieldHub is an all-in-one cloud accounting and operations system for security installers' business operations
Best,
Miles Fawcett
CEO, FieldHub
www.fieldhub.com
miles@fieldhub.com
202.350.4210
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another comment
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Ken
It's nice to see a thread that doesn't have to do with commercial fire.
We went through the same dilemma concerning credit card charges. We decided a couple of years ago to charge the "convenience fee". What that produces is a fee on a fee when you add it to your charge to the customer.
Recently, we got a new residential customer who is a rep for a credit card processing company. Of course, he wanted to discuss our credit card processing. We couldn't refuse. WOW! He gave us a plan that costs us $29.00 per month. That is not a typo, $29.00 per month. They give us a link on our email invoices for the customer to directly make their payment on their credit card. The fees are charged directly to them and we never see them, my office staff no longer has to process their card and this eliminates the problem of charging more then our cost per transaction. They also offer an additional option of ACH which charges directly to their checking account. If the customer selects this option, there is no charge to them for the payment. There is a very small charge to us if they select ACH. We opted to provide this option to our customers. There are deals out there.
Stan Corn, Alarms, Inc.
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Response
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Thanks to Miles and Shea for their valuable and insightful input. It's a good idea to check with your credit card processor for what you can do. It's important to know what you can do, but the credit card processing company will tell you its policy, and ultimately if you want to use that processing company you will need to conform to its guidelines.
As for Stan, I didn't realize there were too many commercial fire articles. Passing the cost of the credit card charge onto the customer is not novel and is a consideration. Having the processor handle the charge seems to save a lot of work on your part though customers will still want to know and need to know what the charge is for credit card processing. I guess you didn't like your processor enough to share its name and contact info.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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