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A Surcharging Bill Advances to the Colorado Governor’s Desk

Digital Transactions

Soon, there might be just two states that prohibit credit card surcharging with the passage Tuesday of a bill in Colorado that would permit the pricing strategy. The bill, SB21-091, passed both the Colorado House and Senate and now moves to Governor Jared Polis’s desk. He has 30 days to sign it. If signed into law, only Connecticut and Massachusetts would still prohibit credit card surcharging.

Earlier this year, a surcharging ban in Kansas was struck down after CardX LLC, a surcharging-services provider, filed suit against it. CardX also lobbied in support of the Colorado measure.

Chicago-based CardX calls the Colorado bill “the most pro-consumer surcharging regime in the country. This bill requires Colorado-specific consumer disclosure language, permits surcharge amounts only up to the level the merchant pays their provider for processing (ensuring surcharges are not profit centers to merchants), and prohibits surcharging on debit cards,” Jonathan Razi, CardX chief executive, says in an email to Digital Transactions News. If signed into law, the bill will take effect July 1, 2022. 

“As surcharging becomes available in more jurisdictions, we’re seeing a shift to more prescriptive surcharging law—lawmakers want to permit surcharging, but define affirmative requirements for surcharging ‘the right way,’” Razi says. “This points to an important role for CardX’s advocacy going forward, helping to inform lawmakers and attorneys general about merchant needs and payments industry regulations so lawmakers can develop a balanced, pro-consumer, pro-market framework that harmonizes with surcharging best practices nationally. SB21-091 has not only achieved this, but done so with flying colors.”


Want to learn more about surcharging?

TSG’s eReport, ‘How to Navigate the World of Surcharging,’ provides an overview of credit card surcharging and the related practices. Topics covered include:

  • What is a surcharge and how does it work?
  • Surcharging rules
  • What is a cash discount and how does it work?
  • Surcharge vs. cash discount
  • What are convenience and service fees?
  • What do all these mean for payment providers

Learn more about the report and download a preview →