Fines Without Findings: Understanding Surcharging Rules and Staying Compliant

Surcharging and Dual Pricing programs are under more scrutiny than ever—and the fines are getting serious.
Across the country, merchants are being hit with four- and five-figure assessments for supposed “violations” with little to no explanation of what went wrong or how to fix it.

In this blog, we’ll unpack what’s really happening behind these assessments, where most merchants go wrong, and what you can do right now to stay out of the crosshairs.

The Problem: Fines Without Findings

When brand or acquirer letters arrive without clear findings or instructions for remediation, everyone loses.
Merchants panic, ISOs scramble, and processors absorb portfolio risk they can’t see.

These “fines without findings” create several challenges:

• No clear violations listed — only a blanket “non-compliance” statement

• No actionable next steps — leaving merchants confused on how to fix issues

• Escalating penalties — fees compound when nothing changes because the issue isn’t defined

Underwriting teams can’t screen for prior fines, “debit is not credit” continues to trip up setups, and varying state laws collide with card brand rules at the point of sale.

At SignaPay, we believe the fix starts with clarity and consistency—and a practical compliance playbook.

The Three Pricing Models—Done Right

Understanding the core pricing models is the foundation of compliance:

• Surcharging: Added only on credit card transactions, capped by brand (e.g., 3%).

• Cash Discounting: Posted price is the card price; customers receive a discount for paying with cash.

• Dual Pricing: Two posted prices—one for cash and one for credit—clearly displayed.

Most violations happen when these models get blended or misapplied. For example, applying a flat fee to all transactions (including debit) can trigger brand violations and even legal action.

Debit ≠ Credit

This is the single biggest compliance failure.
Debit cards—whether PIN or signature—cannot be surcharged under brand rules.

Programs that add a “flat 3.99%” across all card types, or allow front-line staff to override payment type rules, expose merchants and ISOs to major fines.

The fix:

• Configure your POS or gateway to automatically identify BIN ranges for debit.

• Lock out manual overrides.

• Verify receipt language differentiates debit and credit handling.

Signage, Receipts, and “Conspicuous Disclosure”

Another major trigger for fines is where disclosures appear—not just what they say.

To comply, merchants must display notices:

• At entry points (doors or windows)

• At checkout counters or terminals

• On menus or price displays (for restaurants or retail)

• On printed and emailed receipts

“Register-only” signs don’t meet the requirement—customers must be informed before deciding to pay.

State Law vs. Brand Rules

Even when merchants follow brand caps (like a 3% maximum surcharge), state laws can still impose stricter disclosure or pricing requirements.

When there’s a conflict, the stricter rule always wins.
That means merchants in states like New York or New Jersey must ensure compliance not just with Visa or Mastercard, but also with local display and advertising laws.

Risk Flow and Blind Spots

Fines rarely hit a merchant directly—they flow downstream from sponsor banks to acquirers and ISOs, and only then to the merchant.

Because there’s no central “fines database,” underwriting and compliance teams can’t see prior violations.
The solution:

• Require merchant attestations at onboarding.

• Conduct regular signage and pricing audits.

• Maintain clear documentation trails for every case.

Due Process and Escalation

Many merchants don’t challenge fines because they fear reprisal or account termination. But due process exists—and documentation is your best defense.

When a notice arrives:

1. Open an internal ticket immediately.

2. Collect photos, receipts, and POS settings.

3. Map each allegation to the exact rule text.

4. Correct the issue and respond within the service-level agreement (SLA).

5. Keep all records for potential appeal.

A transparent escalation path builds trust and reduces repeat incidents.

The Practical Playbook

Here’s how to operationalize compliance across your portfolio:

1. Standardize Onboarding

Include a signed pricing/surcharging attestation covering signage, debit handling, caps, and receipt language. Store it in your CRM and renewal workflows.

2. Deliver “Compliance-in-a-Box”

Provide merchants with pre-approved templates for:

• Entry and countertop signage

• Menu and shelf tags

• POS receipt footers

• E-commerce disclosure text

3. Configure the POS, Not Just the People

Hard-cap surcharge percentages, block debit BIN ranges, and enable receipt disclosures by default.

4. Audit on a Cadence

Conduct quarterly website and photo audits to confirm pricing visibility matches the program type (cash discount, dual, or surcharge).

5. Respond Like a Regulator Would

Track every notification, document evidence, and resolve issues with clear communication.

Who This Matters To

• ISOs and PayFacs managing mixed portfolios

• Processors and acquirers setting default POS configurations

• Merchant operations and compliance teams responsible for signage and debit handling

• Risk and legal leaders protecting against brand assessments

The Bottom Line

Until the industry creates a transparent fines registry, your controls are your credibility.

By getting your pricing model right, posting prices where customers actually see them, configuring your POS to block mistakes, and maintaining clean receipts, you can protect your merchants—and your margins.

Clarity isn’t just compliance.
It’s how you build trust, prevent penalties, and preserve long-term portfolio value.

Watch the full discussion with Christopher Dryden, Leo Arzumanyan, and Jeremy Stock  here to see how real cases unfold—and how to fix them before they cost you.