---
title: Surcharge Capping by State and Payment Method (for US)
description: Surcharge capping allows you to set per payment method surcharges but with enforced caps per country, state and card type.
---

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# Surcharge Capping by State and Payment Method (for US)

## Surcharge capping allows you to set per payment method surcharges but with enforced caps per country, state and card type.

### Absorb, Pass Through, or Surcharge

These are your choices for handling the cost of payment processing.

If you are doing a pass through a fee regardless of payment method for simplicity, [read this article about using Conveneince Fee.](https://support.youli.io/360001218676-payments-credit-card-surcharge?hsLang=en)

If you need a more robust solution when fees are passed on, continue reading this article to learn about Surcharge Capping.

### What is Surcharge Capping?

It is a feature that allows you to set per payment method surcharges but with caps on countries, states and card types based on the card holder's jurisdiction.

If you are the merchant of record, then this feature could help you recoup some of your card costs without increasing your total trip fees.

YouLi has implemented this feature to support your compliance, but it is your obligation to be compliant with all relevant legislation.

**If you are not confident this feature allows you to be compliant, you should not enable it.**

If you do enable, you are bound by our [Planner terms in Section 4 (m)](https://go.youli.io/planner-agreement) 

**DISCLAIMER:** This document attempts to capture the information as of September 2026 and is provided for general guidance only. It does not constitute legal advice.

YouLi does not warrant that the rates, caps or rules described here reflect the most current law, card network rule or gateway term in any jurisdiction at the time you rely on them.

You must check with your own legal counsel, payment gateway and merchant networks for accurate rules that apply at the time you are selling trips, including whether your gateway or card network agreements permit surcharging in a given state or for a given card type.

If this document is out of date, you are still required to be compliant with relevant laws, card network rules and your gateway agreement.

### Why Surcharge?

The cost of payments can be included in your overall trip cost, but if your competitors do not include that cost in their headline prices, you can look less competitive. 

Enabling the Surcharge Capping feature allows you to collect surcharge when it's allowed, while capping where it is restricted or banned. 

When done right with the right legal guidance, this can be a way to increase revenue and lower payment admin overhead, epecially if you've been doing manual cash discounting.

### General Guidance

To be compliant when surcharging, be sure to take the following into consideration:

1. You may need to register with the card networks (Visa, Mastercard, Amex). YouLi does not handle this and cannot advise if this is currently required.
2. There may be specific rules you've agreed to with your gateway about surcharging. YouLi requires that you are aware of these obligations and choose the right surcharging features based on those agreements. YouLi is not liable if a gateway freezes funds or stops merchant services based on violation of these terms. 
     1. Card network rules and your payment gateway's own merchant terms (for example, Stripe's merchant agreement) may independently restrict or prohibit surcharging in a state or for a card type, even where state law otherwise permits it. Confirming state law permits a surcharge may not be sufficient, you should also confirm your gateway and the relevant card network permit it before enabling a surcharge for that jurisdiction or payment method by using this feature.
3. Transparency for consumers is often a requirement for states and countries with additional rules about surcharging, which is why YouLi's Surcharge Capping feature ensures the consumer is aware of the choices before being charged along with whether fees will apply in each case before proceeding. So they can cancel and choose a no-surcharge method or avoid the transaction altogether.  
     1. Using Surcharge Capping, Debit Cards are always differentiated as a no surcharge option, distinct from Credit Cards to ensure there is a no-surcharge option.
4. Avoid passing on more than the cost of card processing. While not mandatory in all jurisdictions, following this guidance is recommended. YouLi does not enforce this.
5. Debit Card surcharging is generally banned, so the YouLi Surcharge Capping feature always shows Debit Cards as a no-surcharge option in all jurisdictions.
6. While it is per jurisdiction whether the surcharge rule is based on the merchant's location or the card owner's location, YouLi implements the consumer friendly version of this and uses the card owner's location and the laws that apply there. **It does not matter where you are incorporated, but where the cardholder is resident.** 
     1. So if you are an Australian company, you will be allowed to pass on surcharges to US and NZ card holders, but not AU cardholders.
     2. Similarly, if you are a US company, you will be allowed to pass on surcharges to US and NZ card holders, but not AU cardholders.
7. When refunding, you should refund the surcharge with the refund of the payment to be compliant in many states, so it is recommended to establish that as the general rule and ensure the terms of what is refundable are stated clearly at checkout.
8. This feature is designed to help you apply surcharges consistently with the general rules described in this article. It does not independently determine whether your use of a surcharge is lawful, and using it does not guarantee that you are, or will remain, compliant with any law, card network rule or gateway agreement applicable to you

### What is the right surcharge?

**This depends on your payment costs.**

Stripe offers blended pricing with most plans, so that's often the easiest number to use, if that is 2.9% (standard for US merchants) then the best surcharge to configure for credit cards is probably 2.9%. This feature will then apply any caps to lower that further as needed.

With this feature, you can configure different surcharges based on the selected payment method. So if you offer wire transfer using our [No-fee direct payment methods](https://support.youli.io/360001333075-no-fee-direct-payment-methods-up-to-4-options?hsLang=en), you can apply a 0% surcharge on that method to encourage that over the use of the more expensive card option.

Keep in mind that this is not always more cost effective, so this is a commercial decision about the cost of managing alternative payment methods. 

YouLi also offers the option to [require a card payment on deposit.](https://support.youli.io/how-to-do-not-allow-wire-transfer-on-deposit-or-require-credit-card-on-deposit?hsLang=en) If this is enabled, then only the configured methods that are considered "cards" will be shown:

- sample screenshot

Note that your fees may be higher for Apple and Google pay, but your surcharge can NOT be higher for those methods. But you can split them out to be shown as explicit options on the invoice.

Surcharges are applied based on the selected payment method regardless of currency selected if using [Adaptive Pricing](https://support.youli.io/stripe-adaptive-pricing-multi-currency-option?hsLang=en).

### Disclosure

While not all jurisdictions have specific disclosure requirements, the YouLi Surcharge Capping feature applies the more restrictive requirements to the way prices and surcharges are shown in the checkout experience.

1. The trip price is shown on the website/top of sales page or checkout flow (i.e. $2000)
2. When the consumer is shown the invoice, the payment method options are displayed with clear indication of which method may incur a surcharge
3. If a no surcharge payment method is selected, the consumer proceeds to pay with no surcharge
4. Once a surcharge enabled payment method is selected, the consumer is prompted to enter their country (and if in the US, their state). Based on that information, the correct surcharge cap is applied and **the actual amount is displayed** (not just the percentage). 
     1. If surcharge is 2.9% and the trip is $2,000 and the surcharge is under the cap then the total price will be $2,000 + $29 = $2,029.
5. The consumer can then continue to pay or cancel the transaction. If they choose to continue they will be prompted for their card to complete the selected payment process including the stated surcharge.

### United States

#### Federal Cap: 3% for credit card & 0% for debit card

When Surcharge capping is enabled, the cap of 3% will be applied to any credit card from a state that does not have an exception noted below.

When Surcharge capping is enabled, the cap of 0% will be applied when the Traveler selects 'Debit Card'

#### States that do not allow surcharging

- **Connecticut**
- **Massachusetts**
- **Maine**

When Surcharge capping is enabled, the cap of 0% will be applied to any card from the above states.

#### Specific Reduced-cap states

- **Colorado** - max of 2% or your cost, whichever is lower
- **Oklahoma** - credit card can't be your only option, max of 2% or your cost, whichever is lower

When Surcharge capping is enabled, the cap of 2% will be applied to any card from the above states. 

**It is your obligation to ensure the surcharge configured is your cost if it is lower than 2%. This cannot be configured per state.**

#### Special disclosure states - highlights

A few relevant aspects of these states rules are highlighted here, the full requirements are not included, just some of the ones that apply for the Surcharge Capping feature in the context of online trip bookings. This is background to understand why the caps are applied the way they are and why the presentation of the surcharge and caps has been implemented as described in the Disclosure section above.

- **California** - for consumers an alternative no surcharge option must be provided
- **New York** - actual cost of surcharge must be shown (i.e. +$60, not just +3%) and cannot be more than actual cost to merchant
- **New Jersey** - can show percentage (i.e. can be +3%) and cannot be more than actual cost to merchant
- **Minnesota** - cap of 5%, but since the federal limit is 3%, the lower cap will be used.
- **Kansas** - clear disclosure at entry or point of sale before charge
- **Georgia** - an alternative no surcharge option must be provided, and clear refund disclosure if fees are non-refundable, and cannot be more than actual cost to merchant
- **Texas** - technically banned but not enforced, best approach is disclosure and not charging surcharge for debit, and cannot be more than actual cost to merchant

#### Other states

Use standard network rules like:

- Credit cards only
- No debit cards
- Network cap (Visa, Amex, etc)
- Cannot exceed actual cost of acceptance

### Canada

- Capped at 2.4%
- Banned in Quebec, so YouLi Surcharge Capping will be 0% for CA cardholders. 
    - [CA Companies, get in touch](https://support.youli.io/how-to-request-contact-from-sales-or-account-manager?hsLang=en) if you're interested in this feature to apply state based surcharge capping for Canada.

### Australia

No card surcharging as of October 1, 2026. We recommend exploring your fee model and applying an overall Service Fee or cash discounting instead of surcharge using the [Convenience Fee](https://support.youli.io/360001218676-payments-credit-card-surcharge?hsLang=en) feature.

When Surcharge capping is enabled, the cap of 0% will be applied to all Australian cards.

### United Kingdom

No card surcharging for consumer cards. 

When Surcharge capping is enabled, the cap of 0% will be applied to all United Kingdom cards.

### New Zealand

- Capped at 4%.
- But Visa caps at 3%, so YouLi Surcharge Capping will be 3% for NZ cardholders.

### Who handles disputes?

The Merchant of Record (you) is responsible for any dispute of misapplication of surcharge. While YouLi has applied best effort to provide a feature that meets standard surcharge rules across the jurisdictions noted above, we cannot guarantee 100% compliance and recommend refunding any disputed amounts to avoid any issues with merchant networks.

### Ready to Surcharge?

[Open a ticket to request access, no additional cost to you, just more money in your accounts!](https://support.youli.io/kb-tickets/new?hsLang=en)

 

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