Ohio permits credit card surcharging, which helps managed service providers recover payment processing costs that would otherwise reduce their profit margins. Adding surcharge fees to credit card transactions balances the costs of processing payments without raising service prices for MSPs.
However, MSPs must comply with federal regulations, state policies, and card network rules to avoid penalties and maintain transparency with clients when doing so.
This includes following specific guidelines on disclosure, surcharge limits, and compliance with Visa and Mastercard policies.
A structured and legally compliant approach is essential for Ohio MSPs looking to implement surcharging.
This guide outlines the state’s surcharge regulations, provides strategies for maintaining compliance, and explains how automated payment solutions can help streamline the process.
Disclaimer: This content is for informational purposes only and should not be considered legal advice. Ohio MSPs should consult a qualified attorney to ensure compliance with all applicable laws before implementing surcharging practices.
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What is Credit Card Surcharging for MSPs in Ohio?
Credit card surcharging allows MSPs in Ohio to manage the growing costs associated with credit card processing. When applied strategically, it helps offset transaction fees, preserving margins without seriously impacting client relationships.
Processing fees typically range from 2% to 4% and cover interchange fees, network costs, and payment processor charges.
These expenses add up quickly for MSPs handling substantial transaction volumes, particularly with recurring payment models.
For example, an MSP in Ohio processing $150,000 in monthly credit card payments with an average 3% processing fee would incur $4,500 in monthly costs, totaling $54,000 per year.
By applying a 3% surcharge, the MSP transfers this expense to clients, recovering the full amount annually.
Alternatively, if the MSP charges a 2%surcharge, clients would pay $3,000per month, and the MSP would absorb the remaining $1,500. Over a year, this strategy would reduce costs by $36,000.
Open communication is essential for maintaining trust. Clients should be informed about surcharges in advance, and invoices should clearly break down the charges.
For instance:
Service Total: $15,000
Credit Card Surcharge: (2%): $300
Total Due: $15,300
Ensuring compliance with Ohio’s surcharging laws, federal regulations, and Visa, Mastercard, Discover, and American Express policies is critical to avoiding disputes.
When done correctly, surcharging helps MSPs control expenses while continuing to provide valuable services to their clients.
Understanding Credit Card Surcharging Laws in Ohio
As of February 2025, Ohio does not impose additional state-specific restrictions on credit card surcharging beyond federal regulations.
However, MSPs operating in Ohio must follow federal laws and card network rules to ensure proper compliance.
Federal law allows a maximum surcharge of 4%, provided it does not exceed the actual cost of processing the transaction.
In Ohio, MSPs may implement surcharges up to this limit, following the requirements of Visa, Mastercard, American Express, and Discover.
Additionally, Ohio Revised Code Section 503.55 outlines provisions for townships accepting payments via financial transaction devices, and Ohio Revised Code Section 113.40 governs the acceptance of these payments for state expenses.
MSPs should refer to these statutes for Ohio-specific regulations regarding surcharges and payment processing.
MSPs in Ohio must ensure they do not apply surcharges to debit or prepaid cards, even if these are processed as credit. This restriction aligns with the Durbin Amendment of the Dodd-Frank Act and applies uniformly across all transactions.
Further, merchants must notify clients in advance of any surcharges.
This includes clear and visible disclosure at the point of sale and in online transactions. Transparency in billing practices is critical to maintaining client trust and regulatory compliance.
Receipts and invoices must itemize surcharges to ensure clients understand the additional cost. Failing to provide surcharge breakdowns can result in disputes and potential non-compliance with payment network policies.
It is also important to note that merchants cannot profit from surcharges. The fee must accurately reflect the actual processing cost and cannot be used as an additional revenue stream—this must also be made clear to clients.
Ohio MSPs looking to manage processing fees should ensure transparency in billing.
Effective fee structuring may appear as follows:
Service Fee: $7,500
Credit Card Surcharge (3%): $225
Total Due: $7,725
Surcharging can be a useful way for MSPs to offset payment processing costs, but implementation must be done precisely. MSPs should also be aware of potential changes in Ohio’s legislative landscape.
For further guidance, we recommend consulting a legal expert to ensure compliance with federal and card brand regulations. Following best practices helps Ohio MSPs maintain transparent, fair, and legally sound payment policies.
Implementing Credit Card Surcharging for Ohio MSPs
Establishing a surcharging policy in Ohio requires careful planning and effective communication for a seamless transition.
While surcharging becomes easier to manage once the initial steps are in place, mistakes like inadequate preparation or failing to notify clients result in payment disputes, chargebacks, or damaged client relationships.
For example, implementing a surcharge without properly informing clients could lead to rejected payments or reputational concerns.
To help Ohio MSPs navigate this process successfully, here are four steps to introduce surcharging effectively while avoiding common pitfalls.
Step 1: Develop a Clear Surcharge Policy and Structure
A surcharge policy outlines how and when surcharges will be applied, reducing confusion and potential disputes.
This policy should specify the surcharge percentage, the calculation method, and how the fee will appear on client invoices.
Ohio MSPs can select different surcharge structures based on transaction volumes and business needs.
Here are examples of how each approach may be applied:
a) Fixed Percentage Surcharge
A fixed percentage is applied consistently across all transactions, ensuring compliance with Ohio’s 4% surcharge cap, Visa’s 3% limit, or the actual processing cost, whichever is lower.
Example: An MSP applies a 3% surcharge.
Service Fee: $10,000
Surcharge (3%): $300
Total Due: $10,300
This method is straightforward and best suited for MSPs with predictable processing costs.
b) Flat Fee Surcharge
A flat fee is applied to all credit card transactions, though it must remain within actual processing costs to comply with federal and card network guidelines.
Example:
An MSP imposes a $40 flat fee per credit card transaction.
- For a $3,000 invoice: Total Due: $3,040
- For a $500 invoice: The $40 flat fee would exceed the 3% limit ($15 max). Adjusted total: $515
This method is simple, but it can be challenging for MSPs with widely varying transaction amounts.
c) Tiered Surcharge
Surcharge rates vary depending on the transaction size. This model benefits MSPs handling invoices of different amounts.
Example:
- 2% surcharge for invoices below $5,000
- 3% surcharge for invoices $5,000 and above
For a $4,200 payment:
- Surcharge (2%): $84
- Total Due: $4,284
For a $7,500 payment:
- Surcharge (3%): $225
- Total Due: $7,725
Regardless of structure, surcharges must remain within processing cost limits and Ohio’s 4% cap.
Step 2: Notify Credit Card Networks and Clients
MSPs in Ohio must notify card networks such as Visa, Mastercard, American Express, and Discover before applying surcharges.
For example, Visa requires a 30-day notice, which MSPs must submit through an online form.
Equally important is clear communication with clients.
MSPs should disclose surcharge policies and include them in contracts and invoices at the onset of client relationships.
An MSP might notify clients with communication similar to this:
“A 2.6% surcharge will be applied to all credit card payments beginning on [date] to account for processing fees. This charge is not a profit-generating mechanism. Instead, it helps us maintain our pricing structure while offering flexible payment choices. You will see this surcharge clearly listed on your invoices.”
Consider an Ohio MSP issuing an invoice for $6,500 with a 3% surcharge.
Without unambiguous communication, the client might expect a total payment of $6,500 but instead receive an invoice for $6,695.
This could result in a dispute, leading to a chargeback. The MSP would then be required to refund the $195 surcharge and potentially incur a chargeback fee.
Swipesum states the average chargeback cost is $190 per dispute, including lost revenue and administrative costs.
Proactive communication about surcharge policies helps MSPs lessen disputes, maintain revenue, and preserve strong client relationships.
Step 3: Update Invoicing and Billing Systems
MSPs must update invoicing systems to display surcharges as separate line items before they begin applying surcharges.
Listing surcharges on invoices ensures clients understand their charges, reducing the likelihood of disputes and other issues.
Using an automated billing system like FlexPoint simplifies surcharge implementation for Ohio MSPs.
FlexPoint calculates surcharges accurately and itemizes them on invoices, ensuring compliance with Ohio’s 4% surcharge cap.
For example, if an MSP issues a $9,000 invoice with a 3% surcharge, FlexPoint automatically calculates the surcharge as $270, displaying a total due of $9,270.
Once this process is automated, MSPs streamline workflows, enhance transparency, and comply with federal and state regulations.
Step 4: Monitor and Review Compliance
MSPs in Ohio should regularly review surcharging practices to guarantee ongoing compliance with card network policies and state laws.
For instance, if an MSP’s processing cost is 2.8%, the surcharge cannot exceed that percentage, even though Mastercard’s cap is 4%.
Suppose an MSP applies a 4% surcharge while its actual processing fee is 2.7%.
In that case, this violates Mastercard’s policies and may result in penalties, including fines, loss of surcharging privileges, or required client refunds.
Conducting quarterly reviews ensures compliance and allows for adjustments if processing costs change.
Documenting client communications and correspondence with card networks is a crucial safeguard. Should a dispute arise, a well-established paper trail allows MSPs to resolve issues efficiently.
The Role of FlexPoint in Streamlining Credit Card Surcharging
FlexPoint provides Ohio MSPs with flexible payment processing solutions designed to manage credit card fees efficiently.
With tools that allow fees to be absorbed, shared, or passed on to clients, MSPs can align their payment strategies with business goals while maintaining strong client relationships.
FlexPoint’s customizable solutions help Ohio MSPs control payment processing costs while ensuring transparent and professional billing practices.
Payment Processing Plans
To help MSPs in Ohio manage transaction fees efficiently, FlexPoint provides two tailored payment plans:
- Interchange+ Plan
- Customer Surcharge Plan
a. Interchange+ Plan
For MSPs that prefer to keep pricing consistent and avoid passing processing fees to clients, the Interchange+ Plan ensures predictable costs while maintaining a seamless client experience.
Different credit cards carry varying interchange rates.
For example, processing a Visa transaction may have a lower fee than handling a Mastercard business credit card. MSPs using this plan gain insight into transaction costs, enabling better budgeting and financial forecasting.
By leveraging FlexPoint’s Interchange+ Plan, MSPs avoid unnecessary markup fees and only pay the direct processing costs. This optimizes an MSP’s pricing strategies without increasing client charges.
b. Customer Surcharge Plan
For MSPs looking to offset processing expenses, the Customer Surcharge Plan allows them to apply a surcharge to credit card payments while ensuring compliance with Ohio and federal guidelines.
Under this plan, MSPs add a small percentage to client transactions to recover processing fees.
For example, if an MSP invoices $12,500 and applies a 3.5% surcharge, the total due would be $12,937.50.
This plan helps MSPs maintain healthy profit margins while offering clients flexible payment methods.
Some Ohio MSPs prefer a partial fee-sharing model, covering a portion of processing costs while passing the remainder to clients. FlexPoint allows customization of this structure.
For example, on a $6,000 transaction, an MSP may choose to absorb 1% of the fee while charging the client the remaining 2.5%, ensuring a fair and balanced approach.
How FlexPoint Enhances Surcharging Compliance and Transparency
FlexPoint ensures precise surcharge calculations, preventing overcharging and helping Ohio MSPs comply with state regulations and card network rules, including Visa’s 3% cap.
Below is an example of an Ohio-based MSP issuing a $9,500 invoice with a 3.5% surcharge:
Ohio MSP Client INVOICE
Company Name: Your MSP
Invoice #: 0984454
Invoice Date: March 1, 2025
Due Date: April 1, 2025
Bill To:
[Client Company Name]
[Client Address]
[Client Contact Name]
[Client Email]
Services Provided
Subtotal: $9,500.00
Surcharge (3.5% of Subtotal): $332.50
Total Amount Due: $9,832.50
Payment Terms
Payment is due within 30 days of the invoice date. The surcharge complies with Ohio's surcharge regulations, federal laws, and card brand requirements.
Notes:
If you have questions regarding this invoice or require further clarification, please contact us at [Your Contact Information].
As the example shows, FlexPoint simplifies payment processing, offering customizable options that suit the unique needs of MSPs in Ohio.
Whether absorbing costs, applying surcharges, or implementing a hybrid model, FlexPoint helps MSPs comply with surcharging regulations while maintaining clarity in client billing.
The MSP-specific payment automation platform provides the tools needed to streamline billing operations and improve financial stability.
FlexPoint’s Integration with MSP Tools for Seamless Billing
Ohio-based MSPs can seamlessly integrate FlexPoint with their preferred financial and operational platforms, streamlining payment workflows and ensuring compliance.
Supported integrations include QuickBooks Desktop, QuickBooks Online, Xero, ConnectWise, Autotask, HaloPSA, and SuperOps.
These platforms align with MSPs’ existing processes, making it easier for them to incorporate surcharging while maintaining operational efficiency.
FlexPoint reduces manual financial tasks by automating core functions like invoicing, billing, and reconciliation.
For example, integrating with QuickBooks Online ensures real-time financial updates, allowing MSPs to accurately track surcharges, processing fees, and payment statuses.
Further features like branded client payment portals and automated reporting enhance financial management. Together, these features provide MSPs with greater visibility and control over transactions.
FlexPoint helps Ohio MSPs spend less time on financial operations and more time growing their business, all while staying compliant with the latest regulations.
Offering Flexibility in Surcharging
Ohio MSPs must balance surcharging flexibility with compliance requirements. FlexPoint simplifies the process, helping MSPs customize surcharges while adhering to Ohio’s laws and card network policies.
For example, MSPs can waive surcharges for long-term clients as a sign of appreciation while applying standard rates for newer or less frequent clients.
With this level of flexibility, MSPs can keep clients happy, protect their bottom line, and fully comply with industry regulations.
Conclusion: Streamlining Payments with Effective Surcharging Strategies
Ohio MSPs can reduce the impact of processing fees through credit card surcharging, but compliance is paramount.
Surcharges must be disclosed properly, itemized on invoices, and kept within Ohio’s limits while adhering to federal and card network guidelines.
To prevent payment disputes, surcharges must be distinctly itemized on invoices and communicated to clients.
Ohio’s surcharge regulations, federal guidelines, and card network policies (such as Visa’s 3% cap) must be carefully followed.
FlexPoint automates surcharge calculations and integrates directly into invoicing systems, helping your MSP remain compliant while maintaining efficient financial operations.
Enhance your MSP’s bottom line and compliance with automated credit card surcharging solutions from FlexPoint.
Stay within Ohio’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 Ohio for MSPs
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