Montana Credit Card Surcharge Laws

Quick Summary:

• Credit card surcharging is legal in Montana with a 3% maximum surcharge cap
• Montana law explicitly prohibits financial institutions from preventing surcharge collection
• Businesses must disclose surcharge fees prior to transaction processing
• State law supersedes federal 4% limit since Montana's 3% cap is more restrictive
• Both government entities and private businesses can implement surcharges under Montana law

Montana stands out among states with specific credit card surcharge legislation that establishes clear parameters for businesses. The state's 3% surcharge cap is lower than the federal 4% limit, making Montana law the controlling authority for businesses operating within the state. This creates a business-friendly environment while maintaining consumer protections through mandatory disclosure requirements.

Montana Code Annotated Section 7-6-617 provides the legal framework for credit card surcharging, initially focused on local government entities but establishing principles that apply to private businesses as well. The state's approach balances business needs to recover processing costs with consumer protection through transparency requirements.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing surcharge programs, as compliance requirements may vary based on business type and transaction methods.

Is Credit Card Surcharging Legal in Montana?

Yes, credit card surcharging is legal in Montana with specific restrictions. According to Montana law, merchants, vendors, creditors, and other parties can legally charge a credit card transaction fee of up to 3% of the payment amount.

Montana's surcharge law includes an important provision that financial institutions and credit card companies cannot prohibit the collection of surcharge fees, providing businesses with additional protection against card network interference.

What's Allowed

Montana businesses can implement credit card surcharges under these conditions:

• Maximum 3% surcharge - Montana's cap is lower than the federal 4% limit
• Pre-transaction disclosure - customers must be informed before processing payments
• All business types - merchants, vendors, creditors, and other parties can surcharge
• Protection from card network interference - financial institutions cannot prohibit fee collection
• Government entity surcharges - local governments can charge convenience fees up to 3%

What's Not Allowed

Montana law and federal regulations prohibit these surcharge practices:

• Exceeding 3% surcharge limit - Montana's cap supersedes the federal 4% maximum
• Surcharging debit cards - federal law prohibits fees on debit transactions
• Inadequate disclosure - failing to inform customers before processing transactions
• Post-transaction surprises - surcharges must be disclosed upfront, not after payment
• Store-branded card fees - cannot surcharge customers using the business's own credit cards

Montana's Disclosure Requirements

Montana law requires businesses to disclose surcharge fees prior to the transaction being processed. This creates transparency and ensures customers can make informed payment decisions.

Required Disclosure Elements:

• Clear notification of surcharge fees before payment processing
• Visible signage at points of sale for brick-and-mortar businesses
• Website disclosure during checkout process for online transactions
• Verbal notification for telephone transactions
• Receipt itemization showing surcharge as separate line item

Penalty For Non-Compliance

Montana businesses face enforcement through multiple channels:

State Law Violations: Exceeding Montana's 3% surcharge limit constitutes a state law violation, though specific penalties are not detailed in the statute. Enforcement likely occurs through Montana's consumer protection framework.

Card Network Penalties: Visa, MasterCard, and other networks can impose fines ranging from $1,000 to $1 million for merchants violating surcharge rules or disclosure requirements.

Federal Violations: While Montana's 3% limit is below the federal 4% cap, businesses still must comply with federal requirements regarding debit card restrictions and proper disclosure.

To report surcharge violations or file consumer complaints in Montana, contact:

• Montana Department of Justice Office of Consumer Protection
• Online: Consumer complaint form
• Phone: Contact information available through online complaint system
• Mail/Fax: Complaint forms available for download from the website

Is Debit Card Surcharging Legal in Montana?

No, debit card surcharging is illegal in Montana and all 50 states. Federal law under the Durbin Amendment prohibits surcharges on debit card transactions regardless of how they are processed.

Montana's surcharge law acknowledges this federal restriction, and businesses must ensure their payment systems can distinguish between credit and debit cards to avoid accidentally surcharging prohibited transactions.

This prohibition applies to all debit card types:

• Traditional PIN debit cards
• Signature debit transactions processed as credit
• Prepaid debit cards
• FSA/HSA debit cards

How Montana's 3% Cap Compares to Federal Law

Montana's 3% surcharge limit creates an important legal distinction where state law supersedes federal law because it is more restrictive than the federal 4% maximum.

Legal Hierarchy in Montana:

1. Montana's 3% limit - controlling authority for businesses in the state
2. Card network limits - Visa's 3% cap aligns with Montana law
3. Federal 4% limit - does not apply since state law is more restrictive

Practical Example: A Montana business charging a 3.5% surcharge would violate state law even though it complies with federal limits. The business would face state-level enforcement despite federal compliance.

This makes Montana one of the more restrictive states for surcharge amounts, though still permissive compared to states that ban surcharging entirely.

Types of Businesses That Must Follow Montana's Surcharge Laws

Montana's surcharge regulations apply broadly across different entity types:

Private Businesses: All merchants, vendors, creditors, and other private parties can implement surcharges up to 3% following disclosure requirements.

Local Government Entities: Montana Code Annotated Section 7-6-617 specifically allows local governments to charge convenience fees up to 3% for tax and fee payments, with collected fees deposited in appropriate government funds.

State Agencies: May have similar authority under related statutes, though specific provisions may vary.

Professional Service Providers: Legal professionals, healthcare providers, and other service businesses can implement surcharges following Montana's requirements and any applicable professional conduct rules.

Montana Credit Card Surcharge FAQs

Can Montana businesses charge different surcharge rates for different credit card brands?

Montana law doesn't specify restrictions on differential pricing by card brand, but businesses must comply with card network rules. Visa and MasterCard generally require uniform surcharge treatment across their networks, though some variation may be permitted between different card brands.

Do Montana's surcharge laws apply to businesses located outside the state serving Montana customers?

Businesses serving Montana residents should comply with Montana's 3% surcharge limit when processing transactions for customers located in Montana, as state law typically applies based on where the consumer is located.

Can Montana restaurants add automatic service charges to credit card payments?

Restaurants can add service charges following Montana's disclosure requirements and 3% maximum limit. However, they should distinguish between service charges (for service provision) and surcharges (for payment method) to ensure proper compliance and transparency.

Are there special rules for Montana gas stations implementing credit card surcharges?

Montana law doesn't include gas station-specific surcharge provisions, so standard disclosure requirements and the 3% limit apply. Gas stations should clearly display pricing differences between cash and credit payments.

Can Montana businesses implement both convenience fees and surcharges?

Businesses should avoid layering multiple fees on the same transaction. Montana's 3% limit likely applies to the total additional charge related to credit card acceptance, regardless of whether it's labeled as a convenience fee or surcharge.

What should Montana consumers do if they encounter surcharges exceeding 3%?

Consumers can file complaints with the Montana Department of Justice Office of Consumer Protection online or report violations directly to card networks, which have enforcement mechanisms for businesses exceeding established limits.