On January 1, 2025, Kansas redefined its approach to credit card surcharges, lifting the longstanding ban and replacing it with guidelines that give MSPs new flexibility—provided they follow specific legal boundaries.

As of March 2025, Kansas permits MSPs to recover the cost of credit card processing through surcharges. However, this allowance is contingent on fair and transparent pricing, proper prior disclosure, and continuous adherence to both state and federal expectations.

Non-compliance with Kansas surcharge rules can result in enforcement under the Kansas Consumer Protection Act (KCPA), potentially triggering penalties, civil investigations, and client lawsuits.

Understanding how surcharges are regulated in Kansas is especially important for managed service providers. 

This article outlines Kansas’s current surcharge laws, offers practical guidance for MSPs looking to pass on credit card fees, and explains how payment automation platforms support consistent compliance, tracking, and client communication.

Disclaimer: This article is for general informational purposes only and should not be considered legal advice. Kansas MSPs should consult legal counsel before adjusting invoicing procedures or implementing surcharges.

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What is Credit Card Surcharging for MSPs in Kansas?

Credit card surcharging gives Kansas MSPs a legal and transparent way to recoup processing fees that might otherwise cut into their bottom line, particularly when clients pay high-dollar or recurring invoices using premium credit cards with elevated interchange rates.

Each transaction carries a processing cost. Those fees add up fast for MSPs managing monthly service agreements, annual contracts, or large project-based payments.

Surcharging shifts some or all of that cost to the client, provided it’s clearly disclosed in advance and the amount doesn’t exceed what you actually pay in credit card processing fees. 

Under current Kansas law (which will be discussed in detail below), this type of cost-based surcharging is allowed if it’s applied only to credit card transactions and not debit or prepaid cards.

In practical terms, surcharging means adding a small, percentage-based fee to a credit card payment. That fee is designed to cover what your credit card processor charges, allowing you to preserve more of your billed revenue.

Here’s an example of how this might work for a Kansas MSP:

You issue a monthly invoice for $8,500 in recurring IT services. If your merchant services provider charges you 2.85% to process a credit card payment, that would cost you $242.25 in processing costs.

Instead of absorbing that fee, you apply a 2.85% surcharge to the invoice, which increases the total to $8,742.25. The client sees the whole amount up front, chooses to pay by credit, and covers the processing cost. You retain the full $8,500, which otherwise would be $8,257.75 with no surcharge applied.

If you recover $242.25 per month from one client, that adds up to $2,907 annually. If five clients consistently pay by credit card, this would be $14,535 each year that would have otherwise gone to your payment processor.

Whether you choose to pass on the entire processing fee or just a portion, Kansas’s surcharge laws give you the flexibility to offset these costs without inflating your advertised service rates or violating consumer protection rules.

Understanding Credit Card Surcharging Laws in Kansas

For decades, Kansas law (K.S.A. 16a-2-403) barred merchants from adding surcharges to credit card transactions.

In 2021, however, this ban was challenged in court. In CardX, LLC v. Schmidt, a federal judge ruled that Kansas’s no-surcharge law was an unconstitutional restriction on the merchant’s First Amendment right to free speech. This decision effectively struck down the enforcement of the ban on credit card surcharges in the state.

Kansas lawmakers passed House Bill 2247 in 2024 to align with the court ruling. Effective January 1, 2025, the bill lifted the surcharge prohibition with new conditions.

The law requires that any surcharge be clearly and conspicuously disclosed to clients before the transaction. The surcharge must also not exceed the merchant’s actual credit card processing cost. 

In practice, this means you cannot profit from the fee – it should only recoup your processing fees (typically around 2–3%of the sale, and never more than about 4% as per card network caps)​.

Due to card network policies and federal laws like the Durbin Amendment (part of the Dodd-Frank Act), you can’t apply a surcharge to any debit or prepaid card transaction, even if the card is run as “credit.” Card brands also ban surcharges on debit transactions, making this a rule enforced at multiple levels.

For MSPs in Kansas, this legal structure offers a clear way to offset processing costs on credit card payments, but only if you follow a few critical rules:

• Disclose the surcharge clearly and early.
• Limit the fee to your actual cost.
• Apply surcharges only to credit cards. 
• Stay accurate and transparent. 

This structure offers Kansas MSPs a consistent way to manage credit card costs without violating legal or network restrictions.

If you are unsure of your surcharging options in Kansas, we recommend consulting with a lawyer or qualified legal professional.

Implementing Credit Card Surcharging for Kansas MSPs

Client education and transparent communication are pivotal with credit card surcharging. 

Research from PYMNTS shows that nearly 74% of consumers say they’re less inclined to use a credit card when a surcharge is present. Further, 40% said they’d consider taking their business elsewhere to avoid these fees. 

This is why following the law alone is not enough—you also need to communicate your surcharge policy clearly and fairly. 

If you charge too much, clients may resist. If you charge too little, you’ll still be footing part of the bill. For many, the goal is to break even on credit card fees while preserving goodwill.

Below are four steps to help Kansas MSPs implement surcharging legally and in a way that keeps clients informed and on board.

Step 1: Establish a Clear Surcharge Policy and Structure

Start with a formal policy that outlines how and when surcharges will apply. 

The policy should include:

• A clear breakdown of eligible transactions
• How the MSP determines the surcharge rate
• References to Kansas’s current legal stance and the limitations set by federal law and card brand rules

Regarding the surcharging structure, MSPs typically choose between two pricing strategies:

a) Fixed Rate Surcharge

A single rate is applied to all credit card payments, regardless of the invoice amount.

Example:

You apply a 2.7% surcharge to all credit card transactions. A $5,950 invoice would include a $160.65 fee, for a total of $6,110.65.

b) Scaled Surcharge Model

The surcharge rate increases with the invoice amount, allowing more flexibility.

Example:

• 2.25% on invoices below $4,500
• 3% on invoices $4,500 and up

So, a $3,800 invoice adds $85.50, while a $5,200 invoice adds $156.

No matter the structure you adopt, consistency is non-negotiable. 

You must apply the same methodology across all eligible transactions and disclose the exact percentage or amount before the client agrees to pay.

Step 2: Notify Credit Card Institutions and Clients

Before you begin applying surcharges, you need to alert your payments platform or credit card processor and the relevant card networks.

For example, both Visa and Mastercard require merchants to submit a 30-day  written notice before charging a credit card fee.

From Visa:

“U.S. merchants must first notify Visa and their acquirer of their intent to surcharge at least 30 days before implementing surcharging. Merchants can submit a notification form to Visa.”

Once the networks have been notified, shift your focus to the people who matter most: your clients.

Inform them through:

• Formal contracts and agreements
• Digital invoices
• Welcome packets or onboarding documents
• Your online billing or payment portal

Let’s say you send a $7,800 invoice with a $234 surcharge (3%) and haven’t explained it beforehand. A client might assume it’s a billing error or an unauthorized charge, increasing the risk of a chargeback.

Chargebacks are expensive. Swipesum reports that the average chargeback runs around $190 when administrative costs are factored in. Even one disputed charge can eliminate the benefit of a month’s worth of surcharge recovery. 

The best defense is clear, up-front communication.

Step 3: Update Invoicing Systems

Every invoice that includes a credit card surcharge must itemize that fee as a separate line tied directly to the payment method.

Example Invoice Breakdown:

• Managed IT Services: $6,950
• Credit Card Surcharge (2.9%): $201.55
• Total Due: $7,151.55

This format helps eliminate confusion. It clarifies that the surcharge is a pass-through expense, not a hidden fee or arbitrary markup.

Kansas doesn’t currently require a specific invoice format, but under the Kansas Consumer Protection Act (KCPA), unclear or deceptive billing practices could expose your MSP to regulatory action or civil complaints. Transparency in billing is your safest route.

FlexPoint can simplify this dramatically by integrating with your billing system to calculate and apply surcharges only when permitted automatically. 

Step 4: Monitor and Review Compliance

Once you’ve launched a surcharge policy, it must be monitored regularly. Processing fees fluctuate, and card brand rules shift, so your policy needs to adapt.

As of March 2025, current card network limits include:

• Visa caps surcharges at 3%
• Mastercard caps surcharges at 4%, but never more than your actual merchant discount rate (MDR)

For example, if your Mastercard MDR is 2.6%, you can’t legally charge 3%—even if that’s within Mastercard’s formal cap.

From Mastercard:

“If a merchant’s merchant discount rate for Mastercard credit cards is 2.65%, the cap on the surcharge that this merchant may charge a consumer is 2.65%, not 4%.”

To stay compliant in Kansas:

• Reevaluate your merchant statement quarterly
• Adjust surcharge percentages if your processor changes your rates
• Maintain updated disclosures wherever payments are accepted
• Keep surcharges limited to credit card payments—never apply them to debit or prepaid cards

Although Kansas no longer bans surcharges, the KCPA gives the Attorney General’s office authority to investigate deceptive pricing or billing practices. Violations needn’t be intentional to result in fines, consumer complaints, or legal exposure.

When done correctly, surcharging can stabilize your profit margins without creating payment friction. Using a payment tool like FlexPoint helps ensure you're not just compliant—you’re also consistent, efficient, and transparent.

The Role of FlexPoint in Streamlining Credit Card Surcharging

With surcharging now permitted in Kansas, MSPs have a clear opportunity to offset card processing fees, as long as those charges apply only to credit card payments, remain within actual processing rates, and are fully disclosed before the client completes the transaction.

FlexPoint simplifies this entire process. 

Instead of manually tracking rates or guessing which transactions qualify, Kansas MSPs can rely on FlexPoint to calculate eligible surcharges, apply them correctly, and remain aligned with card brand guidelines, without risking non-compliance under Kansas consumer protection laws.

Whether you aim to offset card fees entirely, cover part of the cost yourself, or keep the client experience fee-free, FlexPoint offers flexible billing tools to support your preferred approach.

a) Interchange+ Plan

For MSPs that operate in price-sensitive markets or work with clients in the education, government, or nonprofit sectors, it may make more sense not to surcharge at all. 

However, if you do choose to surcharge, FlexPoint’s Interchange+ Plan is a strong alternative.

This model adjusts your processing costs based on each credit card's exact interchange rate. Your fees are calculated in real time depending on whether the client uses a basic consumer card, a business rewards card, or a premium travel card.

The benefit? You can still monitor payment costs closely and offer strategic advice to clients about their payment methods, even if you choose not to pass on the expense directly.

It’s a valuable option for Kansas MSPs looking to minimize processing costs behind the scenes while keeping the client experience unchanged.

b) Customer Surcharge Plan

FlexPoint’s Customer Surcharge Plan offers a fully automated, legally compliant solution for MSPs who want to shift credit card processing fees to their clients.

This setup allows you to:

• Add a flat-rate surcharge to credit card payments only (never to debit or prepaid cards)
• Automatically apply the fee based on how the client chooses to pay
• Show the surcharge as a separate line item on invoices and receipts—clearly labeled and easy to understand

Let’s say you send an invoice for $4,620, and your average card processing cost is 2.75%. FlexPoint adds a surcharge of $127.05, making the total $4,747.05.

The invoice clearly displays the surcharge next to the subtotal. The client knows what the fee is, why it was added, and how to avoid it in the future by choosing a different payment method. You recover the full $4,620 without impacting your margins.

Kansas law requires surcharges to be tied to your actual processing cost and disclosed to the client before the transaction is finalized.

FlexPoint helps enforce both rules: The platform only adds surcharges to qualifying credit card transactions and provides built-in tools for generating disclosures, such as customizable invoice language and online payment prompts.

c) Split-Cost Option

If you don’t want to pass the full surcharge to your clients, FlexPoint makes it easy to share the fee instead.

This hybrid approach allows you to divide the processing cost: The client pays part of the fee, and your MSP covers the rest.

For example, if your total processing cost is 2.5%, you might choose to add a 1% surcharge to the invoice and absorb the remaining 1.5% internally.

On a $5,700 invoice, the client would pay an additional $57, while your MSP would cover $85.50. That’s a cost-sharing model that softens the impact for clients while still reducing out-of-pocket expenses.

How FlexPoint Enhances Surcharging Compliance and Transparency

While surcharging is permitted in Kansas, MSPs can’t just tack on any fee—they need to disclose it ahead of time and keep it in line with what they’re actually paying to process the card.

Charging more than your actual cost, or surprising the client with the fee after the fact, can lead to misunderstandings, disputed transactions, or exposure under the Kansas Consumer Protection Act.

FlexPoint removes that risk by automatically managing surcharge compliance. Its system is built to apply fees only where appropriate, calculate them accurately, and present them transparently, keeping you aligned with Kansas requirements and card network rules.

Whether you pass the full fee on to the client or cover part of it yourself, FlexPoint ensures your invoices display all charges clearly and in the correct format for compliance.

Here’s an example of how a FlexPoint-generated invoice might look for a Kansas MSP:

FlexPoint’s Integration with MSP Tools for Seamless Billing

FlexPoint connects directly with the tools Kansas MSPs already rely on to manage daily operations, including:

• QuickBooks Desktop
• QuickBooks Online
• Xero
• ConnectWise
• AutoTask
• HaloPSA
• SuperOps

These built-in integrations pull your invoicing, billing, and reconciliation into one system. This reduces repetitive data entry and keeps everything organized in one place.

Rather than switching between multiple platforms, FlexPoint keeps all your records in sync.

For example, when FlexPoint is integrated with QuickBooks Online, payment data can sync in real time, giving you an up-to-date view of client activity and speeding up your reconciliation process.

Credit card surcharges are also captured automatically, giving complete visibility at the invoice level. This kind of detailed reporting helps maintain compliance while reinforcing client confidence.

FlexPoint streamlines the entire payments and invoicing process, and also includes a branded client payment portal that gives clients a more straightforward payment experience.

On this personalized client portal, clients can:

• View line-item invoices – including current and historical
• Update and manage ACH or card payment methods
• Clearly see any surcharge added to credit card payments, separate from service charges

This level of clarity reduces confusion and cuts down on payment-related questions. Clients understand the charges, and you spend less time answering billing emails.

Offering Flexibility in Surcharging

With FlexPoint, Kansas MSPs can manage credit card surcharges on a client-by-client basis, giving them the flexibility to adjust their billing strategy based on contract size, client loyalty, or service tier. 

This granular control lets you apply surcharges only where they make sense, rather than enforcing a one-size-fits-all approach.

For instance, you might decide to waive the surcharge for long-standing clients or those on premium support plans, while still applying a cost-based fee to new or low-margin accounts. This helps you preserve key relationships while still recovering processing costs where they matter most.

No matter how you apply surcharges across your portfolio, FlexPoint automates compliance with Kansas law. 

It applies fees only to eligible credit card transactions, ensures the surcharge stays within your actual processing rate, and supports required disclosure before payment is made.

By allowing MSPs to fine-tune surcharge rules by client, FlexPoint makes it easier to balance cost recovery with client satisfaction, without sacrificing compliance or profitability.

Conclusion: Streamlining Payments with Effective Surcharging Strategies

For MSPs operating in Kansas, clarity around surcharges isn’t just good practice—it’s required by law. 

Effective January 1, 2025, MSPs must give clients advance notice of any credit card surcharge under the revised K.S.A. 16a-2-403. That means no fee can be added unless the client is told about it clearly before they pay.

Leaving out the surcharge amount or failing to present it upfront can lead to billing complaints, lost trust, or even legal exposure under the Kansas Consumer Protection Act.

Invoices must show the surcharge separately and identify it as connected to a credit card transaction, not hidden in the total. Card brands expect merchants to follow their own rules: limit the fee to the actual processing cost and disclose it before the charge goes through.

FlexPoint is built to keep all those pieces in sync. The platform applies surcharges only when allowed, calculates the correct amount based on the card type, and clearly displays it on invoices or payment screens. That means you stay compliant without manually tracking Kansas law or card network policies.

Enhance your MSP’s bottom line and compliance with automated credit card surcharging solutions from FlexPoint. 

Stay within Kansas’s regulations and simplify your MSP payment processes using FlexPoint today.

Schedule a demo to see how FlexPoint can transform your financial operations and maximize profitability.

Additional FAQs: Credit Card Surcharging in Kansas for MSPs

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