Coastal Pay vs Square, Stripe, PayPal and Intellipay: Which Processors Really Support Legal Credit Card Surcharges

Quick Comparison: Surcharging Across Major Processors

Talk to a Coastal Pay Surcharge Specialist | Call 888-266-1715

Let’s Define What “Legally Passing Card Fees to Buyers” Really Means

Before comparing providers, three terms need clarity. Most “zero-fee processing” marketing is one of these in different packaging.

Credit Card Surcharge

An extra fee added to the transaction total when a customer pays with a credit card. The fee is disclosed at the register, on the receipt, and on signage. Surcharges apply only to credit cards – never to debit or prepaid – and are capped by the card brands and certain state laws.

Dual Pricing

Two prices are displayed upfront for every item: a lower cash price and a higher card price. The customer sees both prices and chooses how to pay. Dual pricing is structurally simpler than surcharging and tends to be preferred in states with strict all-in pricing rules. Coastal Pay’s dual pricing program is designed around this model.

Cash Discount

A discount applied at the register only when the customer pays with cash or ACH. The headline price is the card price, and cash buyers receive a reduction. Cash discounting is functionally similar to dual pricing but presented in reverse.

What “Zero-Fee Processing” Usually Is

Most “we’ll eliminate your processing fees” merchant offers are dual pricing or cash discount programs in different language. The fees are not eliminated; they are shifted to the cardholder by the structure of the price display. This is legal and widely accepted when implemented compliantly.

This article focuses on processors that provide tools to do this within the rules, not DIY workarounds. Coastal Pay supports both true surcharging and dual pricing so merchants can choose the compliant model that fits their state and customer base.

Here’s What You Need to Know About Laws and Card-Brand Rules Before You Compare Providers

The card networks and U.S. state laws set the rules. Every processor on this list operates within them. The differences are in how much of the compliance work the processor automates for you.

Card-Network Rules That Apply Everywhere

• Credit cards only: No surcharges on debit or prepaid cards, even when the customer “runs it as credit”
• Cap on percentage: Visa generally caps surcharges at the lesser of approximately 3% or your actual cost of acceptance. Mastercard caps at approximately 4% but still requires the surcharge not exceed your cost
• Disclosure requirements: Clear notice at point of entry, at the register, and on the receipt
• Network notification: Typically 30 days’ notice to Visa, Mastercard, and your acquirer before launching surcharging

State-Level Variation

• Strictly limited or prohibited: Connecticut, Massachusetts, and a handful of other states restrict or prohibit credit card surcharging
• Lower caps: Some states impose lower percentage caps (e.g., Colorado at approximately 2%)
• Pricing display rules: California, New York, and others have specific requirements about how the surcharge or dual price must be displayed before a transaction

Why Automation and Provider Support Matter

Manual fee lines on a Stripe checkout, or hand-typed surcharge calculations at a register, create real legal exposure. A non-compliant surcharge can trigger card brand fines, state attorney general action, and consumer lawsuits. Processors that build the rules into their programs – automatic debit detection, automatic cap enforcement, signage templates, network notifications – dramatically reduce that exposure.

This is the dimension on which the providers below differ most.

How Does Coastal Pay Handle Credit Card Surcharges and Dual Pricing?

Coastal Pay offers two distinct programs for fee-shifting: a compliant credit card surcharge program and a dual pricing program. Both are turnkey, and the team helps you choose the right one for your state, customer base, and channels.

What Coastal Pay Automates

• Debit vs credit detection: The gateway automatically distinguishes credit cards from debit and prepaid cards and exempts the latter from surcharges
• Cap enforcement: Automatic enforcement of card brand and applicable state caps
• Signage templates: Compliant counter signage and disclosure language for in-person merchants
• Receipt formatting: Receipts show the surcharge or dual price clearly to meet disclosure requirements
• Network notification: Coastal Pay handles or guides Visa and Mastercard surcharge registration

Multi-Channel Coverage

Coastal Pay’s surcharge and dual pricing tools work across in-person POS, e-commerce, and email invoicing. The same gateway powers all three channels with consistent rules, which is meaningful because most multi-channel merchants struggle to run compliant surcharging on their online store while also surcharging in-person through a separate POS provider. Coastal Pay’s 2,000+ integrations mean the existing POS, e-commerce, or invoicing stack continues to work.

Pricing Math

Without fee-shifting, Coastal Pay charges a flat 2.5% + $0.15 per transaction with no separate gateway fee. With dual pricing applied, the card price absorbs the processing cost at the point of sale, effectively zeroing out processing expense for the merchant on card transactions.

Real Mini-Examples

Retail boutique: $50 average ticket, $30,000/month in card sales, dual pricing applied. Without dual pricing, processing costs approximately $870/month. With dual pricing through Coastal Pay, that cost is effectively shifted to the cardholder via the card price – retaining over $10,000/year.

B2B firm: $5,000 average invoice, 50 invoices/month ($250,000 in card volume). Surcharging at 3% recovers approximately $7,500/month in processing costs that would otherwise come from the firm’s margin. Coastal Pay’s gateway handles the surcharge automatically on every email invoice.

Get Started With Coastal Pay’s Surcharge Program

How Do Square, Stripe, PayPal and Intellipay Approach Surcharging Differently?

Square

Square offers a U.S. surcharge feature in open beta that automatically adds a percentage fee to qualifying credit card payments. The feature is limited to specific channels (POS apps and some invoices) and does not extend to Square Online or virtual terminal transactions. Square automatically blocks surcharges on debit cards and provides signage templates.

Trade-offs: Limited to in-person and partial invoicing. Still labeled “beta” and subject to change. State-specific compliance is still on the merchant.

Best for: Small in-person businesses already on Square who want a straightforward POS surcharge.

Stripe

Stripe does not offer a one-click U.S. surcharge program. Merchants who want surcharging on Stripe typically either (1) build custom logic in their checkout to add a fee line item or (2) use a third-party surcharge platform that integrates with Stripe. In both cases, the merchant is responsible for ensuring debit exclusion, cap enforcement, disclosures, and state law compliance.

Trade-offs: Significant developer time required. Higher legal risk if logic is wrong. No native cap enforcement or debit detection.

Best for: Online and SaaS merchants with dedicated engineering resources and an attorney engaged in the design.

PayPal

PayPal has historically discouraged or restricted surcharging in its merchant agreement, with terms that may be more restrictive than card-network minimums. Most PayPal merchants who want fee recovery either build the cost into headline prices or offer a cash/ACH discount instead of explicit surcharges.

Trade-offs: Not designed as a surcharging solution. Workarounds exist but are not what PayPal supports natively.

Best for: Merchants who prefer to raise prices or offer cash discounts rather than display explicit surcharges.

Intellipay

Intellipay is a specialist surcharging provider with a strong B2B and government focus. It offers a turnkey surcharge program with automatic debit blocking, cap enforcement, signage templates, and card-network notification handling. Intellipay’s documentation on state-by-state surcharge rules is widely cited.

Trade-offs: Stronger fit for B2B invoicing and government use cases than for retail or e-commerce. Pricing structure can include monthly or gateway fees on top of interchange.

Best for: Large B2B operations and government entities whose primary cost-recovery strategy is surcharging on invoices.

Where Coastal Pay Differs

• Compliant surcharging and dual pricing in one platform – not just one or the other
• Coverage across in-person, e-commerce, and invoicing – not just one channel like Square’s beta
• Built-in compliance automation – not a DIY exercise like Stripe
• Open to retail, e-commerce, B2B, and services – not narrowly B2B/government like Intellipay
• Flat 2.5% + $0.15 base rate with no separate gateway fee – simpler total cost model
• Instant approval in approximately 2 minutes – meaningful versus specialist setups that take weeks

What Should You Look at When Choosing a Provider to Pass Fees Legally?

Use this evaluation checklist on every vendor you consider.

Compliance Automation

• Does the provider automatically distinguish debit from credit and exempt debit? (Coastal Pay: yes, automatic.)
• Does the provider enforce card brand and state percentage caps? (Coastal Pay: yes, automatic.)
• Does the provider handle Visa and Mastercard surcharge registration? (Coastal Pay: yes, with team support.)
• Does the provider supply compliant signage and receipt templates? (Coastal Pay: yes.)

Channel Coverage

• Does the program work across all your channels (POS, online, invoice)? (Coastal Pay: yes, all three.)
• Does it integrate with your existing POS and e-commerce platforms? (Coastal Pay: 2,000+ integrations.)

Customer Experience and Risk

• Are receipts and signage clear enough to reduce chargebacks and customer confusion?
• Does the provider support your team with training on disclosure language and customer questions?
• How does the provider help you handle pushback or complaints during the transition?

Pricing Transparency

• What is the all-in cost without fee-shifting (so you can model the savings)?
• Are there separate gateway fees, monthly fees, or program fees on top of per-transaction pricing? (Coastal Pay: no separate gateway fee on the standard 2.5% + $0.15.)

A Quick Cost Comparison

Retailer at $50,000/month in card volume with a $50 average ticket:

• Without fee-shifting at 2.9% + $0.30: ~$1,750/month in fees
• Without fee-shifting at Coastal Pay’s 2.5% + $0.15: ~$1,400/month
• With Coastal Pay dual pricing applied: effectively $0 net processing cost

Annualized, that is approximately $16,800/year retained vs the typical 2.9% + $0.30 baseline.

Which Option Makes the Most Sense for Your Business Type and Ticket Size?

Small Retail (Under $30K/Month)

Dual pricing tends to feel less aggressive than a surcharge added at the end. Customers see two prices upfront and choose. Coastal Pay configures dual pricing in the POS with compliant signage and receipts.

Multi-Location Retail Chains

Centralized reporting matters. Coastal Pay’s gateway provides consolidated reporting across all locations, with role-based access for property-level managers and corporate finance. Dual pricing or surcharging applies uniformly across locations.

E-Commerce

Online surcharging is harder than in-person because state pricing display laws can require all-in pricing. Coastal Pay’s gateway handles channel-specific rules so online customers see compliant pricing while in-person customers may use surcharging if local rules allow.

Professional Services

Email invoicing with payment links is the most common collection method. Coastal Pay’s invoicing supports surcharging on the link, automatically blocking debit and applying the right cap. Clients see the surcharge on the invoice and on the receipt.

B2B and High-Ticket Invoicing

Surcharging is often the right model here because B2B buyers expect card fees on large invoices and the savings are substantial (3% on a $5,000 invoice is $150 per transaction). Both Coastal Pay and Intellipay handle this well; Coastal Pay typically has broader integration coverage and a simpler base pricing structure.

Coastal Pay note for CFOs and owners: Coastal Pay’s flat 2.5% + $0.15 with no gateway fee, combined with surcharging or dual pricing, makes total cost of acceptance highly predictable. CFOs can model card processing as either a fixed flat-rate cost or a near-zero net cost depending on the chosen program.

When a Niche Provider Like Intellipay Still Wins

Government entities, very large B2B operations with custom invoicing workflows, or merchants with deeply specific regulatory requirements may still find a pure-specialist provider like Intellipay the better fit. For most private-sector merchants in retail, e-commerce, services, and standard B2B, Coastal Pay covers the same surcharging capability with broader integration support and simpler pricing.

Frequently Asked Questions About Surcharging, Dual Pricing and Coastal Pay

Can I pass credit card fees to buyers legally?

Yes, in most U.S. states, with conditions. Surcharges apply to credit cards only (never debit or prepaid), must be capped at the lesser of the card brand maximum (typically 3 to 4%) or your actual cost of acceptance, and require disclosure to customers and notification to the card networks. Connecticut, Massachusetts, and a handful of other states restrict or prohibit surcharging.

Can I add a surcharge on debit cards?

No. Card network rules and federal law prohibit surcharges on debit and prepaid cards, even when the customer chooses to run the card as credit. A compliant program must automatically detect and exempt debit cards.

Is surcharging legal in my state?

Most U.S. states allow surcharging with disclosure. Some states restrict or prohibit it (Connecticut, Massachusetts), and others impose lower caps or specific pricing display rules (Colorado, California, New York). Coastal Pay can confirm current rules for your state during onboarding.

What is the difference between surcharging and dual pricing?

Surcharging adds a fee at the end of a transaction only on credit cards. Dual pricing displays a lower cash price and a higher card price upfront. Dual pricing is generally simpler to implement and is often preferred in states with all-in pricing requirements.

Will I lose customers if I add a surcharge?

Most merchants see minimal pushback when surcharges are clearly disclosed at the register, on signage, and on receipts. Dual pricing tends to feel less punitive. Coastal Pay offers both so merchants can choose the model that fits their customer base.

How does Coastal Pay keep me compliant?

Coastal Pay’s surcharge and dual pricing programs automatically detect debit vs credit, enforce percentage caps, and provide signage templates and receipt formats that meet card brand and state requirements. The team walks merchants through state-specific rules during onboarding.

How does Coastal Pay compare to Square or Stripe for surcharging implementation?

Coastal Pay supports compliant surcharging and dual pricing across in-person, online, and invoice channels with built-in debit detection, cap enforcement, and signage templates. Square’s surcharge feature is in beta and limited to certain channels. Stripe has no native U.S. surcharge program and requires custom code or third-party tools.

Here’s How to Get Started With Coastal Pay’s Compliant Surcharge and Dual Pricing Programs

Launching with Coastal Pay typically takes days, not weeks.

1. Get approved in approximately 2 minutes through Coastal Pay’s instant boarding.
2. Choose your program with a Coastal Pay specialist: surcharging, dual pricing, or a combination based on your state and channels.
3. Configure the gateway and POS for compliant signage, receipts, and rule enforcement. Coastal Pay’s team handles network notification.
4. Go live across in-person, online, and invoice channels with consistent rules.

The Coastal Pay support team will walk you through signage placement, receipt language, and brief staff training to minimize operational friction during the launch.

Talk to a Surcharge Specialist

Explore Coastal Pay’s Dual Pricing Program

Or call: 888-266-1715

Currently using Square, Stripe, or PayPal? Schedule a quick comparison call focused on fee-shifting and total cost of acceptance. Most merchants find the math meaningfully more attractive on Coastal Pay – and the implementation lift is days, not months.