Brand-level vs. product-level
surcharging: the choice the
settlement proposes to give you

Every surcharging merchant already knows the current rule by heart: pick one number, apply it to every credit card, stay under 3% (or under your true cost of acceptance, whichever is lower), post it everywhere the card networks require, and give 30 days' notice before you start. That's the whole rulebook today. The proposed settlement doesn't touch that rulebook yet — but it does put a specific, testable new mechanic on the table for whenever it does take effect, and it's worth understanding the mechanic now so you're not relearning your pricing model under a deadline later.

What "brand-level" and "product-level" actually mean

Both terms describe how granular a surcharge is allowed to be, not whether you can surcharge at all.

• Brand-level surcharging is the model everyone already uses under current rules: one surcharge percentage, applied uniformly to every credit transaction run on a given network — a Visa Signature rewards card and a plain Visa consumer credit card get surcharged at the identical rate, because the surcharge is tied to the network brand, not the specific product.
• Product-level surcharging is the new option the settlement proposes: a merchant could apply a different surcharge to specific card products within the same network — for example, a higher surcharge on a premium rewards or commercial card than on a standard consumer credit card, because those products carry meaningfully different actual interchange costs.

The distinction exists because interchange itself is not flat. A standard consumer credit card and a premium rewards or commercial card from the same network can carry a meaningfully different interchange cost to the merchant — often a full percentage point or more apart — yet under today's brand-level-only rule, a merchant surcharging at a single flat rate is either under-recovering cost on the expensive cards or over-recovering it on the cheap ones. Product-level surcharging is the mechanism proposed to let merchants price closer to actual cost, card by card.

The rule everyone glosses over: it's one choice per network, not per transaction

The proposed terms are specific about how the choice works, and it's stricter than "mix and match":

• A merchant picks either brand-level or product-level surcharging — not both — for each card network.
• That choice can differ by network: a merchant could run brand-level surcharging on Mastercard and product-level on Visa, but could not blend the two approaches within a single network's own transactions.
• Whichever model is chosen, the surcharge still cannot exceed 3% for Visa or 4% for Mastercard, and still cannot exceed the merchant's actual cost of accepting that card — the settlement's proposed change is to the granularity of surcharging, not to the existing rate caps.
• The proposal contemplates this option becoming available within roughly 90 days of a final settlement order — a date that has not been set, because the case has only preliminary approval as of 2026-06-09.

This is a proposed change to how finely a surcharge can be sliced — not a change to whether you can surcharge, or to the caps that already govern you today.

What's real today vs. what's proposed

Mechanic	Status today	Realistic earliest effect
Single flat surcharge rate per network (brand-level, current default)	In effect now	Already current — this is what every surcharging merchant uses today
3% Visa / 4% Mastercard surcharge caps, capped further by cost of acceptance	In effect now	Already current law of the card networks
30 days' written notice to acquirer before surcharging	In effect now	Already current requirement
Choice of brand-level OR product-level surcharging, per network	Not in effect	Proposed within ~90 days of a final settlement order — no order date set
Product-level differential surcharge rates (e.g. higher rate on premium/commercial cards)	Not in effect	Same — tied to final approval + implementation window

Why this hasn't happened yet — and won't for a while

Judge Brian Cogan (E.D.N.Y.) granted preliminary approval to the revised settlement on June 9, 2026, after rejecting an earlier, weaker version of the same deal in 2024. Preliminary approval is a procedural step — it clears the way for class notice and a fairness hearing, and it is not a ruling that the deal's terms are final or enforceable. The National Association of Convenience Stores (NACS) has been the case's most vocal objector, arguing the settlement still doesn't create a structural check on credit interchange comparable to the Durbin framework that already governs debit, and NACS has stated it intends to appeal to the Second Circuit if the court grants final approval. Some legal and payments-industry analysts following the docket have suggested that between a contested final-approval hearing and a subsequent appeal, the case could realistically stretch toward 2028 or 2029 before every avenue is closed — materially later than the "late 2026 to 2027" window that seemed plausible immediately after the June order. Nothing about brand-level vs. product-level surcharging can go live before that full sequence resolves and the networks actually republish their rules.

How to think about the choice now, before it's real

You cannot elect brand-level or product-level surcharging today — the option doesn't exist yet on any live Visa or Mastercard rate schedule, and no processor can enable it for you regardless of what a sales conversation implies. What you can do now is understand which model would fit your card mix, so the decision is fast and informed whenever it actually opens up:

• If your credit mix skews heavily toward standard consumer cards with little premium or commercial volume, brand-level surcharging (the status quo) will likely stay simpler to administer and won't leave much money on the table either way.
• If you routinely see premium rewards or commercial cards — common in B2B, professional services, and higher-ticket retail — product-level surcharging could let you recover cost more precisely instead of either under-charging on expensive cards or over-charging on cheap ones under one blended rate.
• Either way, the deeper lever available to you today is not the surcharge model — it's your processor's markup. Brand-level vs. product-level surcharging is a mechanic for passing cost through; it does nothing about the size of the markup layered on top of interchange in the first place, which is the number that's always negotiable regardless of what this litigation ultimately decides.

The gap between MidPay's 1.49% debit / 2.69% credit and a typical flat-rate processor at 2.6% + 10¢ on everything runs about $378/month, or $4,536/year on $50,000/month at a 60% debit mix — a number that has nothing to do with this settlement and is fully actionable this month, independent of whether brand-level or product-level surcharging is ever finalized.

Frequently asked questions

Can I choose brand-level surcharging on Visa and product-level on Mastercard?

Under the proposed settlement terms, yes — the choice between brand-level and product-level surcharging would be made separately for each network. A merchant could pick brand-level for Visa and product-level for Mastercard, but could not mix the two approaches within a single network's transactions.

Is brand-level or product-level surcharging active today?

Neither. As of this writing the 2026 interchange settlement has only preliminary court approval (2026-06-09), not final approval. Today's live Visa and Mastercard Core Rules only permit a single flat surcharge rate applied uniformly to all credit transactions, capped at 3% for Visa and 4% for Mastercard, whichever is lower than actual cost of acceptance.

What is the practical difference between brand-level and product-level surcharging?

Brand-level surcharging applies one flat surcharge percentage to every credit transaction on a given network, regardless of which specific card product the customer used. Product-level surcharging would let a merchant apply a different surcharge to specific card products — for example, a higher surcharge on a premium rewards card than on a standard consumer credit card, reflecting the actual cost difference between them.

How much notice does a merchant have to give before surcharging?

Under current, already-active Visa and Mastercard rules, a merchant must give its acquirer at least 30 days' written notice before beginning to surcharge, disclosing the merchant's name and address, the surcharge amount, and any payment facilitator or third party involved. Any future product-level option is expected to carry similar or stricter disclosure requirements once it is actually in force.