New York Compliance
Is Credit Card Surcharging Legal in New York? A Plain-English Guide to GBL §518
Short answer: yes, since February 2024 — but only if you post the price correctly. Here is exactly what New York requires, what it does not, and how a surcharge differs from a cash discount.
For years, charging customers extra for paying by credit card was flatly illegal in New York. That changed on February 11, 2024, when an amendment to General Business Law §518 (Senate Bill S1048A) took effect. Surcharging is now legal in New York — but the law is specific about disclosure, and getting it wrong carries a real penalty.
What GBL §518 actually requires
If you charge a customer more for paying with a credit card than for cash, you must clearly and conspicuously post the total price the card customer will pay, including the surcharge, before they reach the register. You cannot advertise $20 and add a surcharge at checkout. If $20 is what a card customer pays, $20 is what has to be posted.
The surcharge is capped two separate ways, and you are bound by whichever is lower.
Under New York law, the surcharge cannot exceed what your own processor actually charges you for that transaction. The Department of State frames this as passing along the actual cost of processing — not a round number you pick.
Separately from state law, Visa and Mastercard set their own surcharge caps and rules in their operating regulations. Those caps differ by card brand, have changed in recent years, and are not published in full for merchants. They also restrict which card types can be surcharged at all. Your processor is the one who has to tell you the current numbers and confirm what your terminal is actually configured to do — and if they cannot answer that clearly, that is worth noticing.
What the state says is legal and illegal
The New York Department of State publishes a one-page reference guide with specific examples. It is the clearest official statement available, and worth reading in full — but here is the core of it.
| Legal — a business can | Illegal — a business cannot |
|---|---|
| Clearly display both the credit card price and the cash price | Put a sign on the wall or at the register saying a fee applies to all credit card sales, without posting the total price |
| List the higher credit card price and advertise a discount for cash purchases | Add a credit card surcharge warning to the item price tag instead of posting the actual card price |
| Advertise that all prices include a cash discount that does not apply to credit card purchases | Charge a separate line item on the receipt only — convenience fee, service fee, processing fee, technology fee, non-cash adjustment — without clearly posting the total price before purchase |
| Use the same price for cash and credit |
Source: NYS Department of State, Division of Consumer Protection.
Surcharge vs. cash discount vs. dual pricing
These three get used interchangeably in conversation, and New York treats them differently. This is where most owners get tripped up, including ones who have been doing this for years under the old rules.
| Approach | How it works | New York status |
|---|---|---|
| Surcharge | One posted price; a fee is added at checkout for paying by card | Legal since Feb 2024, with mandatory up-front disclosure and the cost cap |
| Cash discount | One posted price; cash payers receive a discount off it | Always been legal — this was never restricted |
| Dual / two-tier pricing | Two prices posted side by side, cash and card; customer chooses | Explicitly permitted by name in the statute |
In practice, dual pricing is the hardest of the three to get wrong, because the required disclosure — both prices, visible together, before payment — is built into how the program operates rather than being something staff have to remember to say.
What it costs to get this wrong
Violations carry a civil penalty of up to $500 per violation, enforceable by the Attorney General and, concurrently, by municipal consumer affairs offices and local government attorneys. Note the unit: per violation, not per business.
Separately from the state, the card networks enforce their own surcharge rules and can fine merchants who break them, independently of anything the state does. A setup can be wrong in two directions at once, enforced by two parties who are not coordinating.
Setting this up correctly
- Pick the approach that matches how you take orders. Quick service, retail, and counter service generally do best with dual pricing. Full-service restaurants with tip lines, split checks, and printed menus often do better with a straight lower processing rate instead.
- Configure the terminal to display the total card price before payment, not as an addition after the fact.
- Post signage at the entrance and at the register. This satisfies the state requirement and the separate card network disclosure rules at the same time.
- Re-check your surcharge percentage against your actual cost at least annually. Processors change pricing. A surcharge that was compliant the day it was set can drift out of compliance when your underlying rate moves and nobody adjusts it.
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- New York Department of State, Credit Card Surcharge one-page reference guide (April 2024) — dos.ny.gov
- Full text of General Business Law §518, New York State Senate — nysenate.gov
- NYC 311, credit card surcharge guidance for businesses — portal.311.nyc.gov
- New York Department of State business resources — dos.ny.gov
Card network surcharge caps and rules are set by Visa and Mastercard in operating regulations not published in full for merchants. Confirm current requirements with your processor before setting a surcharge.
Legal and illegal examples above are drawn from New York Department of State guidance published in 2024. This article is provided for general educational purposes and reflects information available as of August 2026. It is not legal or compliance advice, and it is not a substitute for reviewing your own merchant agreement or consulting an attorney about your specific situation. Card network rules, state law, and processor pricing change; verify current requirements with your processor or the relevant regulator before acting.