On August 1, 2026 we are updating how the credit card processing fee is calculated so that it aligns with card network and state surcharge rules. This article explains, in plain terms, what the fee is, how it's calculated, and what you can expect to receive in different situations.
If you'd rather not read the whole thing: your processing rate hasn't changed. It hasn't gone up. What changed is how much of that fee can be passed to families and the amount it's calculated on, which depends on how you're set up, the state you're in, and the type of card the family uses. The examples below use a 3% rate, the most common setup, to show how the calculation works.
The short version
There are two separate things happening in every payment:
The surcharge the family pays. If you currently pass the processing fee to families, a surcharge is added at checkout. Card network and state rules limit this to at most 3% of the order subtotal, and in some cases less or nothing at all.
The credit card processing fee. This is the fee you already pay to process payments (a 3% rate for most accounts). It's calculated on the full amount that runs through the card, which includes any surcharge the family paid.
The family's surcharge is calculated on the order subtotal, while the processing fee is calculated on the full amount charged (subtotal plus surcharge). Because that total is slightly higher than the subtotal, the processing fee comes out a little more than the surcharge the family paid, and that small difference comes out of your deposit. In a standard state on a credit card, that remainder is very small. It gets larger on debit cards and in states that cap or prohibit surcharges.
Why this is changing
Card networks (Visa, Mastercard) and individual state laws set rules on surcharging that we're now following automatically:
A surcharge passed to a family can never be more than 3% of the order subtotal.
Debit and prepaid cards can never be surcharged, regardless of your settings.
Some states cap surcharges below 3% (for example, Colorado and Oklahoma cap at 2%).
Some states prohibit surcharges entirely (for example, California, Connecticut, Massachusetts, and Maine).
Following these rules keeps you compliant without you having to track each state's law yourself.
Two setups: who pays the fee
Your account is set to one of two options:
You pay the fee. Families are never surcharged. You pay your processing rate on the order. Card type and state don't matter.
You pass the fee to families. A surcharge is added at checkout when the rules allow it. This is where the calculation below applies.
How the calculation works, step by step
The examples below assume a $1,000 order and use a 3% rate, which is the most common setup. If your account is on a different rate, the math works the same way, just swap in your rate.
Setup 1: You pay the fee (any card, any state)
Line item | Amount |
Order subtotal | $1,000.00 |
Family surcharge | $0.00 |
Total charged to family | $1,000.00 |
Credit card processing fee (3% of $1,000) | −$30.00 |
Your net deposit | $970.00 |
The family pays $1,000. You cover the full $30 fee. This is your choice and nothing here has changed.
Setup 2, Scenario A: Family pays, credit card, standard state
Line item | Amount |
Order subtotal | $1,000.00 |
Family surcharge (3%) | +$30.00 |
Total charged to family | $1,030.00 |
Credit card processing fee (3% of $1,030) | −$30.90 |
Your net deposit | $999.10 |
The family covers most of the fee through their surcharge. Because the 3% processing fee applies to the full $1,030 (including the surcharge), you cover the last $0.90. This is the most common scenario and the difference is minor.
Setup 2, Scenario B: Family pays, credit card, capped state (e.g. Colorado, 2%)
Line item | Amount |
Order subtotal | $1,000.00 |
Family surcharge (2%, state cap) | +$20.00 |
Total charged to family | $1,020.00 |
Credit card processing fee (3% of $1,020) | −$30.60 |
Your net deposit | $989.40 |
Because the state caps the surcharge at 2%, the family covers less of the fee. You cover the difference, $10.60 in this example.
Setup 2, Scenario C: Family pays, credit card, prohibited state (e.g. California)
Line item | Amount |
Order subtotal | $1,000.00 |
Family surcharge (not allowed) | $0.00 |
Total charged to family | $1,000.00 |
Credit card processing fee (3% of $1,000) | −$30.00 |
Your net deposit | $970.00 |
The state prohibits surcharging, so the family is not charged a fee even though your account is set to pass it along. You cover the full $30, the same as if you'd chosen to pay the fee yourself.
Setup 2, Scenario D: Family pays with a debit or prepaid card (any state)
Line item | Amount |
Order subtotal | $1,000.00 |
Family surcharge (not allowed on debit) | $0.00 |
Total charged to family | $1,000.00 |
Credit card processing fee (3% of $1,000) | −$30.00 |
Your net deposit | $970.00 |
Debit and prepaid cards can never be surcharged. When a family pays this way, you cover the full $30, regardless of your settings or your state.
Quick reference
Situation | Family surcharge | Your net on a $1,000 order |
You pay the fee | None | $970.00 |
Family pays, credit, standard state | 3% | $999.10 |
Family pays, credit, capped state (2%) | 2% | $989.40 |
Family pays, credit, prohibited state | None | $970.00 |
Family pays, debit or prepaid card | None | $970.00 |
Questions?
Contact support. We're happy to walk through exactly what this means for your funeral home.