New York State Implements Updated Credit Card Surcharging Legislation

Article Payments & Treasury Solutions

NY Surcharging Law

A new law will take effect in New York on February 11, 2024, designed to create more transparency for consumers relative to the price of goods or services. I’ve compiled a list of frequently asked questions (FAQs) to help you navigate the recent legislation.

What is the new law?

According to New York Governor Kathy Hochul’s pressroom website, “Business transactions imposing a credit card surcharge must post the total price of transactions, including surcharge, prior to sale.”

What is the purpose/intent of the law?

Price transparency and consumer protection.

Have you ever purchased an item with a price tag of $5.00, but when you checked out it cost you $5.41? Some of the extra .41 cents you paid is NY State sales tax, but some of that is likely an added fee (surcharge) the business is charging you to help offset their cost of accepting a card as a payment tender.

Posted somewhere near checkout is a small sign that reads, “A 4% processing fee will be assessed for all purchases made with credit cards.” Had you paid with cash, you would have only paid for the amount of the item, plus NY State sales tax—$5.20 for example. In this example, the actual price of the good purchased is not known until the 4% card processing fee is applied. When you tap (swipe, dip) your card to pay, you are provided an amount on the screen to confirm. This may be the first time you actually know how much you have to pay for the item. The purchase price in this example is different than the sticker price, thus not transparent.

I’m a merchant operating in the state of New York. What do I need to do?

Per the NY Governor’s website, effective Feb 11, 2014, NY State law requires merchants to do the following:

  • “Limit credit card surcharges to the amount charged to the business by the credit card company.”
  • Require “businesses to post the following before checkout:
    • The total price of an item or service inclusive of the credit card surcharge; or
    • A two-tiered pricing option, which requires the credit card price to be posted alongside the cash price.”

What does it mean to “limit credit card surcharges?”

Merchants are not allowed to charge a customer a card processing fee that exceeds the cost the merchant must pay its card processor for that transaction.

Can you give me an example of what “post before checkout” means and what my options are?

In the $5.00 example above, you can elect to do one of the following:

  • Change the posted price tag to show two amounts: the amount one would pay if paying with a card, and the amount one would pay if using cash (i.e. $5.20 card/$5.00 cash).
  • Change the posted price tag to show the higher credit card price and advertise a lower (discounted) price if payment is with cash (i.e. $5.20, 4% discount for cash purchases).
  • Charge the same price to all regardless of whether they pay in cash or card (i.e. $5.20).

Where can I get more information?

Visit the New York State Governors website which features guidance, examples, and a video. You may also call your NY State government at (800) 697-1220.

Anything else I need to know?

Yes. CampusGuard’s Treasury Solutions team can assess the merchant departments across your environment to provide insight into how this law will impact your institution. Contact us for assistance.


About the Author
Ruth Harpool

Ruth Harpool


Treasury Solutions Advisor

Ruth provides consulting in the areas of Treasury Operations, Payments, and Payments Risk management. She has over 30 years of experience in banking services, banking operations, not-for-profit treasury cash management, and payments management operational leadership. Formerly, Ruth was the Managing Director of Treasury Operations at Indiana University.