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Merchant services · California

Merchant Services in California

California has more small businesses than any other state, about 4.34 million by the SBA's 2025 count. Many of them are trying to work out the same question: how do you cover card acceptance costs without breaking California's pricing laws? It's a harder question here than in most states. California still has a credit card surcharge statute on its books, and since July 2024 it has also had an "honest pricing" law that changed how prices have to be advertised. This page explains both in plain terms and then covers the processing and ATM options we offer California merchants.

General information, not legal or tax advice. California's rules are fact-specific, so talk to a California attorney before you change how you price.

Two California laws to know

1. Civil Code § 1748.1: the surcharge statute

Section 1748.1 says a retailer may not impose a surcharge on a consumer who chooses to pay by credit card instead of cash or check. The same section expressly lets retailers offer discounts for paying by cash, check, or other non-credit methods, as long as the discount is offered to every buyer.

You may have read that this law was "struck down." That's only partly true. In Italian Colors Restaurant v. Becerra (2018), the Ninth Circuit held that the statute violated the First Amendment only as applied to the specific merchants who sued, and only for the specific pricing practice they described. The statute itself was not wiped out. For everyone else it remains on the books, and the safer course in California is a properly structured cash discount rather than a fee added for using a credit card.

2. SB 478, the "Honest Pricing Law" (Civil Code § 1770(a)(29))

Since July 1, 2024, most businesses selling to consumers can't advertise or display a price that leaves out mandatory fees, other than government taxes and reasonable shipping. The California Attorney General's FAQ addresses card fees directly:

  • A card processing fee is generally not "mandatory" if the customer can avoid it by paying another way, such as cash.
  • If you accept only credit cards, the card fee becomes mandatory and has to be built into the advertised price.
  • Restaurants, bars, and certain food vendors are exempt from parts of the law as long as any mandatory fee is shown clearly and conspicuously wherever prices appear (SB 1524).

In practice, many California owners decide that dual pricing is the cleanest setup. That means showing a cash price and a card price everywhere prices appear, so nobody is surprised at the register.

How the card networks fit in

State law is only half the picture. Visa limits surcharges to credit cards only, never debit or prepaid. The surcharge can't exceed your actual cost of acceptance or 3%, whichever is lower. Visa also requires 30 days' notice to your processor and disclosure at the entrance, at checkout, and on the receipt. A pending Visa/Mastercard class settlement, with a fairness hearing set for November 16, 2026, would change some network rules, but it doesn't override state law in California or anywhere else.

What California businesses usually need

  • Restaurants, taquerias, and coffee shops in places like the Mission, Little Saigon, or downtown Fresno often prioritize tip handling, fast tap-to-pay, and menu wording that satisfies the SB 1524 display rule.
  • Wineries and tasting rooms juggle tasting fees, bottle sales, club shipments, and event tickets. That calls for card-present, online, and recurring billing on one account.
  • Farm stands and Central Valley ag suppliers run seasonal volume, and some work in places with spotty coverage, so offline-capable hardware matters to them.
  • Tech, SaaS, and professional firms mostly take card-not-present and recurring payments, so interchange-plus pricing and invoicing tools usually matter more than counter hardware.
  • Tourism and attractions, from coastal rentals to theme-park-adjacent shops, see a lot of premium and international cards, which changes the cost math.

Your options, side by side

  1. Dual pricing or a cash discount (optional). This is built around § 1748.1's cash discount language, with both prices displayed in a way that fits SB 478.
  2. Interchange-plus. You pay the network cost for each card plus a fixed, disclosed markup. This usually suits steady or card-not-present volume.
  3. Flat-rate. One predictable rate on every sale, which is useful for small or seasonal sellers.
  4. Square, if you prefer it. We'll include it as an option in your comparison.

We won't quote savings before we've seen a statement. Your results depend on volume, card mix, and the contract you have now.

ATMs in California

Cash-preferring customers still show up at bars, swap meets, nightlife spots, and event venues. If you want an ATM:

  • You buy the machine and you own it. It's a purchase, not a loan.
  • Terms are subject to the partner agreement, which is disclosed in writing before you sign, so you can read everything first.
  • Before the machine goes in, we agree in writing on cash loading, the withdrawal surcharge you'll set, and service arrangements. We don't promise monitoring, maintenance, or revenue sharing. ATM surcharge income isn't guaranteed.
  • Machines come through our ATM partner, and card processing comes through our processing partners.

FAQ

Can I add a credit card surcharge in California?

It's risky. Civil Code § 1748.1 still prohibits it for most retailers. The 2018 Ninth Circuit ruling protected only the merchants who sued. A cash discount, which the statute expressly allows, is the lower-risk route. Ask a California attorney about your specific situation.

Does SB 478 ban dual pricing?

No. The Attorney General's guidance says a card fee customers can avoid by paying another way generally isn't a mandatory fee. Your posted prices still have to be honest and complete, and if you accept only cards, the card price is your price.

Can I charge a fee on debit cards?

No. Card-network rules don't allow surcharges on debit or prepaid cards, even when the customer selects "credit."

I run a restaurant. What's different?

Under SB 1524, restaurants and bars can keep certain mandatory fees separate from menu prices as long as the fee is clearly and conspicuously displayed wherever prices appear. Tips are not affected.

Do you work with California businesses if you're based in Tennessee?

Yes. We're in Clifton, Tennessee, and we work with merchants nationwide by phone and email.

What does an ATM cost?

That depends on the model and setup. You buy and own the machine, and you get the written terms before you decide. Terms are subject to the partner agreement.

Get a no-obligation comparison

Send a recent statement, and we'll show you how a cash discount, interchange-plus, flat-rate, and your current setup compare under California's rules.