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New York’s Disclosure Law on Credit Card Surcharges

Date Updated: February 16, 2024

New York’s City Disclosure Law, which modifies Section 518 of the New York General Business Law, requires businesses to display the complete transaction price when a credit card is used, including any additional costs. This action seeks to remove the unexpectedness of undisclosed charges during the purchase, promoting a purchasing environment that is more open and clearer. Merchants should ensure that the additional charge is not higher than the fee imposed by the credit card operator to ensure fairness in transactions.

Basic Requirement of New York’s New Disclosure Law

Under the New York City Disclosure Law, merchants must clearly show the complete cost of a transaction, which includes any additional charges for using a credit card, before completing the sale. The goal of this new law is for customers to know the pricing variation between cash and credit card transactions.

Essentially Forcing Merchants to a Cash Discount Model

According to the modified Section 518, if businesses provide a reduction for cash transactions, the price shown must include the increased rate for credit card payments. In essence, this implies that the stated price should align with the credit card price, while cash payments may be eligible for a reduction, ensuring that the pricing approach is clear and in accordance with the law.

How does New York City’s Disclosure Law affect Agents and Referral Partners?

Partners and agents who have been offering surcharging programs to New York retailers must quickly navigate these new regulatory waters. They must provide their clients with the tools and knowledge required to follow New York’s surcharging rules. Their residuals will be negatively affected, as more merchants will choose to go with less profitable pricing programs as a result.

Agents’ 2 Main Duties

  1. Educational Efforts: It is crucial to provide information and education to merchants regarding the details of the law, such as the significance of clear pricing and the restrictions on surcharge programs.
  2. Tools for ensuring compliance: Providing software upgrades or compliance solutions that assist merchants in automatically showing accurate pricing is extremely helpful. These technologies should also be able to support the dual pricing model, but the price upon checkout needs to match the higher price on the shelf or online.

Assisting Cash Discount Programs: Agents and partners should advise merchants on how to organize cash discount programs in a way that is in line with the new surcharging restrictions. This includes establishing pricing systems that automatically use the credit card price as the default, but also allow for a cash discount to be applied. This ensures transparency and compliance per New York’s new law.


  • The business lists the higher credit card price next to a lower cash price.
  • The business lists the credit card price for items and services, then lets customers know they will receive a discount for using cash.
  • The business changes all prices to the credit card price.


  • The business posts a sign on the door and at the register stating an additional 3.9 percent surcharge will apply for credit card purchases.
  • “This business has a 4 percent cash discount incentive built into all pricing. Any purchases made with a credit or debit card will not receive the cash discount and an adjustment in cost will be displayed on your receipt.”
  • A convenience fee, service fee, administration fee, non-cash adjustment, technology fee, processing fee, etc., is charged to credit card users and added as a separate line item on a customer receipt.
  • The price tag of an item shows “$10.00, + 4 percent if paying with a credit card.”

Final Thoughts on New York City’s Disclosure Law

The updated Section 518 of New York’s new credit card surcharging law, while aimed at enhancing consumer transparency, presents certain challenges for merchants and agents. The requirement for clear disclosure of surcharges and adherence to surcharge caps necessitates adjustments in business operations, potentially leading to increased administrative tasks and the need for system updates. For agents and partners, supporting merchants through this transition involves providing additional education and tools, which could divert resources from other value-added services.

Moreover, the emphasis on matching cash discount pricing with the higher credit card rate might limit pricing flexibility for merchants, impacting their pricing strategies and potentially affecting profit margins. It’s important for all parties involved to navigate these changes thoughtfully, balancing compliance with operational efficiency and customer satisfaction.

Contact us today if you have any questions.