Written by Al Noshirvani, Managing Partner 

Credit card surcharging has become widely accepted—and in many cases, it’s a practical response to rising payment costs. Merchants are under pressure, margins are thin, and transparency with consumers matters.

But here’s where the conversation needs to get uncomfortable.

A growing number of payment service providers claim they’re “saving merchants money” by implementing surcharging—while quietly keeping the additional fees for themselves!

Let’s be clear:
 That’s not cost recovery.
 That’s margin expansion disguised as merchant advocacy.

If a surcharge is passed on to the consumer, the financial benefit or at least a large portion of it, should flow directly to the merchant. When software providers retain those fees, they’re no longer solving a problem—they’re creating one, at the merchant’s expense. After all its the merchant who has to deal with the consumers reaction to that additional 3% fee when they want to use a credit card. Add to that our move to a cashless society and you have the perfect storm!

Surcharging should be transparent, ethical, and aligned with the merchant’s interests. Anything else erodes trust and damages the long-term relationship between technology providers and the businesses they claim to serve.

Merchants deserve partners who play it straight—not hidden revenue models wrapped in marketing spin.