Brand-Level vs Product-Level Surcharging: The New Choice
Product-Level Surcharging Is the New Option Most Merchants Will Want
Product-level surcharging is a new choice the proposed Visa and Mastercard settlement hands merchants, and it pairs with a second option called brand-level surcharging. For most of the time surcharging has been allowed in the United States, it worked one blunt way: if you surcharged credit cards, you surcharged all of them at a single rate, with a handful of state-law exceptions layered on top. You did not get to say “surcharge the expensive cards but not the cheap ones,” and you did not get to single out one card network while leaving the other alone.
The settlement announced in November 2025 changes that. If the court approves it, merchants gain the ability to surcharge selectively — either by network (Visa only, or Mastercard only) or by card product within a network (only the premium rewards cards, leaving standard cards alone). These are called brand-level and product-level surcharging, and the settlement frames them as a choice: you can surcharge at the brand level or the product level for a given network, but not both at the same time on that network.
That sounds like a technicality. It is actually a meaningful operational decision, because the two approaches target completely different cost problems, carry different customer-friction profiles, and require different configuration on your terminal or gateway. This post explains what each one is, when each makes sense, and the compliance rules that apply to both — so that when the settlement takes effect, you are choosing deliberately rather than letting your processor pick a default for you.
Brand-Level Surcharging Means Singling Out a Whole Network
Brand-level surcharging lets you apply a surcharge to one card network while leaving the other untouched. In practice that means you could surcharge every Visa credit card that comes through your terminal and surcharge nothing on Mastercard, or the reverse. The surcharge applies uniformly across all credit products within that brand — a basic Visa card and a top-tier Visa rewards card get the same surcharge.
Why would a merchant want this? The most common reason is leverage and card mix. If your customer base skews heavily toward one network, or if one network’s interchange is costing you materially more across your particular transaction profile, brand-level surcharging lets you push back on the expensive network specifically rather than penalizing every card your customers carry. It is the blunter of the two new tools, but it is also simpler to communicate at the point of sale: “Visa credit incurs a surcharge” is a single, clear message.
The catch is that customers do not think of themselves as “Visa customers” or “Mastercard customers.” Most people carry both and have no idea which network sits behind a given card until they are standing at your counter being told one of them costs extra. Brand-level surcharging can feel arbitrary to the person paying it, which is the friction cost you accept in exchange for the simplicity.
For any single network, you choose brand-level OR product-level — not both. You cannot surcharge all Visa cards at one rate AND add an extra product-level surcharge on Visa premium cards. But the networks are independent: you could run brand-level on Mastercard and product-level on Visa if that is what your cost analysis supports.
Product-Level Surcharging Means Targeting Only the Expensive Cards
Product-level surcharging is the more surgical option. Instead of singling out a whole network, you single out a category of cards within a network — specifically, the premium rewards cards that carry the highest interchange. The settlement contemplates merchants surcharging only the premium consumer credit cards (the rewards-heavy products like high-tier Visa and Mastercard consumer cards) while leaving standard consumer credit cards alone.
This is the option most merchants will find compelling, and the reason is in the cost structure. Premium rewards cards are expensive to accept precisely because the rich rewards those cardholders enjoy are funded by higher interchange paid by the merchant. A standard consumer credit card might cost you well under two percent in interchange; a premium rewards card can run meaningfully higher. Product-level surcharging lets you pass along the cost specifically on the cards that generate it, while the customer paying with an ordinary card sees no surcharge at all.
The friction profile is also better. The customer who gets surcharged is the one carrying the premium rewards card — and that customer is, by definition, already accustomed to a value exchange where the perks they collect come from somewhere. It is an easier conversation than telling a customer with a basic debit-adjacent credit card that they owe extra. The tradeoff is configuration complexity: your system has to identify the card product in real time and apply the surcharge conditionally, which is more than a flat on-off switch.
The whole argument for surcharging is recovering acceptance cost. Premium rewards cards are where the cost concentrates. Product-level surcharging aligns the charge with the actual cost driver — you recover more from the cards that cost more, and you stop annoying the customers whose cards were never the problem.
How to Decide Between Brand-Level and Product-Level Surcharging
The decision comes down to what you are trying to solve and how much configuration complexity you can support. If your goal is a clean, simple point-of-sale message and your card mix is concentrated in one network, brand-level is the path of least resistance. If your goal is cost recovery that tracks where the cost actually lives, and your system can identify card products at authorization, product-level is the more defensible choice.
There is also a customer-relationship dimension. Brand-level surcharging surprises customers based on something invisible to them — which network printed their card. Product-level surcharging surprises customers based on the rewards tier they chose, which at least correlates with a benefit they receive. For merchants in relationship-heavy verticals — professional services, healthcare, anything with repeat clientele — the product-level approach tends to generate less resentment because it feels less arbitrary.
For many merchants, the honest answer is that selective surcharging of any kind is the wrong tool, and a dual pricing program framed as a cash discount produces less customer friction than any surcharge configuration. The customer-pushback data is consistent on this point, and we cover it below. But if you have decided surcharging is right for your business, the settlement now lets you do it with a precision that did not previously exist.
Your card mix shifts over time, interchange schedules change, and the settlement’s interchange reductions phase in over multiple years. The brand-vs-product choice that makes sense at launch may not be the right one in eighteen months. Treat it as a configuration you revisit, not a switch you flip once.
The Compliance Requirements Do Not Change Just Because You Surcharge Selectively
Whichever approach you choose, the underlying surcharging compliance rules still apply, and the settlement adds specificity rather than relaxing them. The surcharge is capped at three percent of the transaction or your actual cost of acceptance, whichever is lower — you cannot use a selective surcharge as a profit center. You must provide your acquirer at least thirty days’ notice before you begin surcharging. And you must disclose the surcharge clearly at the point of sale and on the receipt, identifying it as a merchant-imposed surcharge and showing the dollar amount.
State law sits on top of all of this and does not go away. Several states ban surcharging outright, several more have statutes that courts have found unconstitutional but that remain on the books, and a number have specific caps or disclosure requirements that are stricter than the network rules. The settlement’s brand-level and product-level options are a network-rule change, not a state-law change — if your state restricts surcharging, that restriction still governs you regardless of which configuration the settlement permits. Before you configure anything, confirm where your state stands on credit card surcharge legality.
One more practical point: the settlement is not yet in effect. It awaits court approval, which is expected in late 2026 or early 2027 per the parties’ own filings. Nothing described here is something you can configure today. What you can do today is understand the choice well enough to make it deliberately when the option arrives — and to recognize when your processor proposes a default that may not serve your particular cost structure.
Before You Configure Anything, Look at the Walk-Away Numbers
There is a reason we keep pointing toward dual pricing as an alternative, and it is not philosophical. The merchant-satisfaction data on surcharging is genuinely unflattering. In recent J.D. Power research, roughly a third of consumers reported walking away from a purchase when faced with a surcharge, and a larger share of credit card users said they had decided not to use their card at a business specifically because of one. More striking, businesses that surcharge report lower satisfaction with their own processing costs than businesses that do not — the tool meant to lower costs leaves the merchants using it feeling worse about costs, because of the friction it introduces.
Selective surcharging — brand-level or product-level surcharging — is partly an attempt to soften that friction by narrowing who feels it. Product-level surcharging in particular reduces the number of customers who get surprised, which should reduce walk-aways at the margin. That is a real improvement over blanket surcharging. But it does not eliminate the dynamic, and a customer who reaches for a premium card and gets surcharged is still a customer experiencing friction at your counter. The settlement gives you better tools; it does not change the underlying behavioral data. Go in with eyes open.
Frequently Asked Questions
Not on the same network. For any one network you choose either brand-level or product-level, not both. The networks are independent, though — you could run product-level on Visa and brand-level on Mastercard if your cost analysis supports it.
No. Both brand-level and product-level surcharging come from the November 2025 Visa and Mastercard settlement, which is pending court approval expected in late 2026 or early 2027. Until the settlement is approved and the networks publish implementation guidance, neither option is configurable.
No. Brand-level and product-level surcharging are network-rule changes. If your state restricts or bans surcharging, that restriction still applies regardless of how narrowly you target the surcharge. Confirm your state’s rules before configuring anything.
Product-level generally causes less, because it surcharges only premium rewards cardholders rather than everyone carrying a given network’s card. But the lowest-friction approach for most merchants is a dual pricing program framed as a cash discount, which avoids the surcharge label entirely.
Send Us Your Statement. We’ll Show You Where the Premium-Card Cost Is Hiding.
If you are weighing brand-level versus product-level surcharging — or whether to surcharge at all — the answer starts with your actual card mix and what each tier is costing you. Send Brookside one recent statement and we’ll break down your premium-card volume, your real cost of acceptance by category, and whether selective surcharging or a dual pricing program serves you better. The analysis takes us about fifteen minutes. Learn more about payment processing consumer protections from the CFPB.
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