Since August 2023, New Jersey has officially permitted credit card surcharges, but under a tightly regulated framework designed to protect consumers from surprise fees and price inflation.

New Jersey has made its stance on credit card surcharging clear: surcharges are permissible (and as of March 2025, they still are), but they must be cost-based, transparent, and applied only to credit card transactions. Non-compliance can carry steep consequences. 

Violations are treated as breaches of the state’s Consumer Fraud Act and can result in substantial fines. 

Understanding the specifics of New Jersey’s surcharge rules—such as the disclosure requirements, debit card exclusions, and rate limits—is critical for MSPs who want to avoid regulatory problems and maintain client trust.

This article outlines New Jersey’s current credit card surcharge rules and shares best practices for managed service providers who want to pass on card fees. It also highlights how automated billing tools simplify surcharge compliance and recordkeeping.

Disclaimer: This article is for general informational purposes only and should not be considered legal advice. New Jersey MSPs are encouraged to conduct their own due diligence and consult a qualified attorney before modifying payment policies or adding surcharges.

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What is Credit Card Surcharging for MSPs in New Jersey?

Credit card surcharging gives New Jersey MSPs a way to recover processing fees that would otherwise reduce profits, especially when clients pay large or recurring invoices using credit cards with high interchange rates.

Every swipe or charge costs money, which can add up quickly for managed service providers handling frequent payments or long-term service contracts. 

Surcharging allows you to pass some—or all—of that expense back to the client in a way that’s clearly disclosed and legally permitted under New Jersey law.

In practical terms, surcharging means applying a small percentage-based fee to a client’s invoice if they choose to pay by credit card. That fee covers your credit card processing costs.

Here’s how that might work in a New Jersey-based MSP:

You bill a client $10,000 for IT services and apply a 2.6% credit card surcharge. The client’s total comes to $10,260.

If your average processing fee is also 2.6%, you would have otherwise paid $260 to the payment processor. With the surcharge, you recover that amount entirely and keep the full $10,000 in revenue.

Multiply that recovery across multiple clients each month; the total adds up fast. 

Recouping $260 monthly from just one client equals $3,120 a year. Do the same for five clients, and that’s $15,600 annually—money that would have otherwise been lost to processing fees.

Whether you choose to recover all or part of your fees, surcharging gives you flexibility to protect your margins while staying within the law.

Understanding Credit Card Surcharging Laws in New Jersey

Even a small credit card fee can significantly impact an MSP’s profits over time, particularly when clients use corporate or rewards-based credit cards, which often carry processing fees between 2 and 4%.

Unlike states where the legal landscape is murky, New Jersey’s law is clearly defined. Under P.L. 2023, c.146 and N.J.S.A. 56:8-156.1 and -156.2, sellers/merchants—including MSPs—can apply a surcharge to credit card transactions only if that fee does not exceed the actual payment processing cost.

It’s also important to understand where surcharges can’t be applied. 

Due to card network rules and federal legislation like the Durbin Amendment (part of the Dodd-Frank Act), surcharges on debit card transactions are not allowed, even if the debit card is run as “credit.”

The Durbin Amendment specifically regulates interchange fees on debit cards and prohibits surcharging them, reinforcing both federal and network-level bans. As a result, surcharging in New Jersey applies strictly to credit card transactions.

Credit card surcharging gives MSPs a reliable, lawful option to offset rising processing fees, provided they follow a few key rules:

• Disclose the surcharge upfront and in the right places (invoices, online checkout, etc.).
• Only apply it to credit card payments. Debit and prepaid card transactions cannot include a surcharge under state law or card network rules.
• Keep the fee within your actual cost—if your processing fee averages 2.9%, you can’t charge 3.25%. For instance, even a flat 2.5% surcharge is only allowed if that’s within your actual cost.

Transparency and accuracy matter. Charging more than your cost or failing to disclose the surcharge in advance can lead to serious consequences under New Jersey’s Consumer Fraud Act—including fines of up to $10,000 per violation.

The structure of New Jersey’s law allows MSPs to use surcharging confidently, as long as they’re not overcharging clients or hiding fees. That means you can protect your margins and still remain fully compliant. 

When implemented carefully, surcharging is a simple tool to control expenses without compromising trust or violating regulations.

It is essential to keep up with surcharging laws in New Jersey. In 2024, Bill A2922 (2024-2025) was introduced, which would prohibit retail mercantile establishments from imposing surcharges on consumers. 

Although MSPs are not mercantile establishments, this is an example of why it is so important to monitor changing regulations.

We recommend consulting a lawyer for more professional guidance if you are still unsure whether to apply surcharges to your credit card transactions.

Implementing Credit Card Surcharging for New Jersey MSPs

While surcharging can help New Jersey MSPs recover card processing costs, it must be implemented carefully. Your MSP clients must understand why the surcharge exists, or you risk damaging trust and potentially losing business.

Communication is fundamental. That’s why setting the correct rate—and communicating it transparently—is critical. 

Overcharging can push clients away, but undercharging leaves you covering more of the fee than necessary. The goal is to recoup your actual processing costs while preserving the relationship.

Here are four steps to implement surcharging in a legally compliant and client-friendly way in New Jersey.

Step 1: Establish a Clear Surcharge Policy and Structure

Before applying a credit card fee, create a written surcharge policy that spells out the following:

• Which types of transactions will include a surcharge
• How the fee is calculated
• How you ensure compliance with New Jersey law, card brand rules, and federal guidelines like the Durbin Amendment

Remember, New Jersey's surcharge statute (P.L. 2023, c.146) allows surcharges only on credit card transactions, not on debit or prepaid cards. This matches federal requirements and card network rules.

New Jersey MSPs must also choose from different surcharge structures:

a) Fixed Percentage Surcharge

An MSP applies the same surcharge percentage regardless of invoice size. 

Example: 

A 2.6% surcharge on all credit card transactions. A $6,200 invoice would include a $161.20 surcharge, for a total of $6,361.20.

b) Tiered Surcharge System

Surcharge rates vary based on the invoice amount.

Example:

• 2% for invoices under $3,500
• 3% for invoices of $3,500 and up

A $2,800 invoice would carry a $56 surcharge. A $4,000 invoice would add $120.

Whatever structure you use must reflect your actual processing costs and be applied consistently. The law requires complete transparency—not just a notice that a fee “may apply,” but the specific rate or dollar amount disclosed before the charge is incurred.

Step 2: Notify Credit Card Institutions and Clients

Before surcharging, notify your payment processor and card networks. Visa and Mastercard both require 30 days’ notice.

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.”

After that, tell your clients. Surprises at checkout damage trust and may result in disputes or chargebacks.

Disclose surcharge details in:

• Invoices
• Client contracts and agreements
• Onboarding material
• Website or payment portals

For example, if a client receives a $6,900 invoice and sees an unexplained $207 credit card surcharge (at 3%), they may assume it’s an error or even a fraudulent charge. That confusion can lead to a chargeback, often costing more than the original transaction.

According to Swipesum, the average chargeback (including penalties and administrative costs) comes to around $190. Avoiding those costs starts with proactive, documented communication.

Step 3: Update Invoicing Systems

Itemization of surcharge amounts is another critical component under New Jersey law and card brand rules. Every invoice and receipt should show the surcharge as a separate line item directly tied to credit card usage.

Example:

• Monthly Services: $6,100 
• Credit Card Surcharge (2.85%): $173.85 
• Total Due: $6,273.85

This not only keeps your MSP compliant but also avoids confusion. It helps clients understand the charge is a pass-through fee, not a hidden markup. 

Again, the New Jersey Division of Consumer Affairs requires sellers to disclose the surcharge amount before the transaction, not after the fact, and maintain records showing the fee accurately reflects your processing cost.

FlexPoint’s automated billing and payment solutions can simplify this process. They calculate surcharge amounts based on card type, apply them only to eligible transactions, and ensure they appear correctly on invoices and receipts—automating compliance while saving time.

Step 4: Monitor and Review Compliance

Compliance doesn’t end once your surcharge policy is in place. It needs to be reviewed regularly, especially since card network rules and processing rates can change.

As of March 2025:

• Visa caps surcharges at 3%
• Mastercard caps surcharges at 4%, but only up to your actual merchant discount rate (MDR)

For example, if your Mastercard fee is 2.85%, you can’t charge more than 2.85%, even though the cap is technically 4%.

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 New Jersey, MSPs should:

• Review actual processing costs at least quarterly
• Adjust surcharge rates if your processor changes your fees
• Maintain signage and invoice transparency as required by P.L. 2023, c.146
• Continue excluding debit cards from surcharges in accordance with the Durbin Amendment and card network bans

Following these best practices not only helps you recover costs but also shields your MSP from potential penalties under the New Jersey Consumer Fraud Act, which carries fines of up to $10,000 per violation and $20,000 for repeat offenses.

The Role of FlexPoint in Streamlining Credit Card Surcharging

Now that New Jersey law permits surcharging (under P.L. 2023, c.146), MSPs have a legal path to recover those costs—so long as they apply the surcharge only to credit card transactions, limit the amount to their actual processing cost, and disclose the fee clearly in advance.

FlexPoint helps MSPs do all of that seamlessly, eliminating guesswork and manual calculations while staying compliant with Visa, Mastercard, and New Jersey’s surcharge laws.. 

Whether you prefer to pass the full cost to the client, absorb part of it, or cover it entirely yourself, FlexPoint’s billing options are built to match your strategy.

a) Interchange+ Plan

Some MSPs may decide not to pass card fees to clients, especially in competitive markets or when handling government or nonprofit accounts. For those situations, FlexPoint offers the Interchange+ Plan.

In this case, FlexPoint adjusts costs according to the specific interchange rates of each card type. With this plan, the fees MSPs pay are determined by the card used for the transaction.

The Interchange+ Plan gives you transparency into each card type's cost. So, even if you decide not to surcharge, you can still monitor expenses and optimize payment methods with clients. 

This option helps MSPs reduce internal costs without introducing new fees to the client experience.

b) Customer Surcharge Plan

For MSPs who choose to shift processing fees to clients, FlexPoint’s Customer Surcharge Plan offers a compliant, automated way to do it—without cutting corners or risking legal issues.

This plan enables you to:

• Apply a flat-rate surcharge to credit card transactions only
• Automatically add the surcharge to invoices based on client payment type
• Ensure the surcharge appears as a separate line item, clearly labeled for visibility

Let’s say you invoice a client for $4,750, and your average processing cost is 2.65%. The system adds a $125.38 credit card surcharge, bringing the total to $4,875.38.

The client sees the fee broken out on their invoice. There are no surprises or confusion. You recover your exact cost, and your MSP keeps the full $4,750 as revenue.

New Jersey law requires all surcharges to be tied to your actual cost and must be disclosed before the charge is incurred.

FlexPoint’s system automates both: it applies surcharges only to qualifying credit card transactions and can generate customized signage or checkout language to help you meet disclosure requirements for online payments.

If a New Jersey MSP prefers not to pass the full processing cost to clients but still wants to offset a portion of it, FlexPoint makes it easy to split the surcharge.

Using this shared-cost setup, you can divide a 2.5% credit card processing fee between your MSP and the client. 

For instance, you could apply a 1.2% surcharge to the client and absorb the remaining 1.3% internally.

On a $5,400 payment, the client would pay an added $64.80, while your MSP would cover $70.20. This offers a balanced way to manage costs without placing the entire burden on your client.

How FlexPoint Enhances Surcharging Compliance and Transparency

Even when credit card surcharging is permitted in New Jersey, there are clear limitations. MSPs must strictly adhere to disclosure requirements and ensure any surcharge does not exceed the actual cost of processing the payment.

Applying a surcharge that goes beyond your actual card processing fee–or failing to disclose it correctly before the transaction–can result in client disputes, chargebacks, or even penalties under New Jersey’s Consumer Fraud Act.

FlexPoint helps New Jersey MSPs avoid these issues by automating surcharge compliance and embedding transparency into every transaction. 

Whether you apply a full surcharge or split the cost with clients, FlexPoint ensures that each invoice reflects state and card network requirements.

Here’s an example of how a FlexPoint-generated invoice might list these fees and charges to support surcharge compliance in New Jersey:

FlexPoint’s Integration with MSP Tools for Seamless Billing

FlexPoint integrates seamlessly with the platforms New Jersey MSPs already use to manage day-to-day operations, such as:

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

These integrations bring your invoicing, billing, and reconciliation workflows into a centralized system, reducing time-consuming manual tasks while helping your team stay organized and accurate.

Instead of jumping between tools, FlexPoint keeps everything in sync. 

For instance, an MSP using QuickBooks can have payments automatically synced in real time, giving a clear, current view of client transactions and streamlining reconciliation.

Credit card surcharges are also tracked automatically, ensuring complete visibility across each invoice. Since New Jersey law requires surcharge transparency and limits fees to your actual processing costs, this level of detail supports both compliance and client trust.

Beyond backend automation, FlexPoint also includes a branded client payment portal that makes the experience seamless for your clients. 

Clients can log in to:

• View itemized invoices
• Manage credit card and ACH payment methods
• See any credit card surcharge applied—clearly separated from the service charges

This upfront visibility helps reduce billing confusion and minimizes back-and-forth questions. Clients understand what they’re paying and why, and you get fewer payment friction points when payments are due.

In short, FlexPoint reduces administrative hours, increases accuracy, and simplifies surcharge compliance, helping New Jersey MSPs deliver a smoother payment experience for both internal teams and clients.

Offering Flexibility in Surcharging

With FlexPoint, New Jersey MSPs have the option to apply credit card surcharges on a per-client basis, giving you complete control over how fees are handled across your portfolio. This flexibility allows you to tailor your billing approach based on each client's value, tenure, or preferences.

For example, you might choose to waive surcharges for long-term clients or high-volume accounts as part of a client retention strategy. At the same time, you can apply a cost-recovery surcharge to newer clients or smaller contracts where margins are tighter.

FlexPoint’s automation ensures compliance with New Jersey law regardless of how it is applied—whether across the board or on a case-by-case basis.

FlexPoint gives you the power to manage surcharges at the client level, helping you maintain high client satisfaction rates without compromising profitability.

Alternative Cost-effective Payment Method - ACH for New Jersey MSPs

Credit card surcharging is not the only option available to New Jersey MSPs. 

ACH payments present a cost-effective, client-friendly alternative that can help reduce expenses without introducing new fees into the payment experience.

Compared to credit card transactions, ACH payments have significantly lower processing costs, averaging between $0.25 and $1.00 per transaction. There’s no need to calculate or disclose surcharges, and there's no risk of violating state or federal rules tied to credit card usage. 

ACH payments provide a smooth and predictable way for your MSP clients to pay, free of extra fees or confusion.

A recent PYMNTS study found that nearly 75% of consumers say they’re less likely to use a credit card when a surcharge is applied. Fortunately, MSPs that rely on ACH can avoid the friction that often comes with surcharging. 

Offering ACH as a preferred method keeps the payment experience straightforward and transparent while helping your MSP retain revenue that would otherwise go toward card interchange and assessment fees.

FlexPoint’s Same-Day ACH gives New Jersey MSPs access to funds faster than traditional ACH timelines to speed up cash flow. Instead of waiting three to five business days, payments can clear within hours, keeping your revenue cycle moving and giving you more control over your working capital.

Using ACH also means fewer chargebacks and lower administrative overhead. With FlexPoint, ACH is fully integrated into your billing system, allowing you to offer it as a preferred payment method without manual reconciliation or duplicate entry.

Conclusion: Reduce Processing Costs AND Maintain Compliance for New Jersey MSPs with Credit Card Surcharging

For New Jersey MSPs, transparency and compliance are non-negotiable regarding credit card surcharging, especially given the state’s clearly defined requirements under P.L. 2023, c.146.

Clients must be informed of any surcharge before a transaction occurs. Failing to disclose the exact percentage or dollar amount in advance can result in billing disputes, chargebacks, or even enforcement action under the New Jersey Consumer Fraud Act.

As importantly, surcharges must appear as a separate line item on invoices, clearly tied to credit card usage. Card network rules also require prior disclosure and cap surcharges.

FlexPoint helps MSPs meet all of these standards easily. Built for managed service providers' operations, it automates surcharge calculation, invoicing, and disclosure, thus ensuring compliance with New Jersey law, federal regulations, and card brand policies.

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

Stay within New Jersey’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 New Jersey for MSPs

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