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While it may no longer be a requirement of Visa or Mastercard that merchants not pass on fees on to consumers, I believe that there are laws on the books in several states (California included) that would still preclude this.

http://law.onecle.com/california/civil/1748.1.html

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Note that this only applies customers who elect to use a credit card in lieu of cash or check or similar. For online transactions where credit cards are the only payment method accepted, that section does not apply.

While a reading of the letter of the law seems to indicate that you would be correct and would be able to pass on/differentiate charges ("The customer CAN'T 'elect' to use a credit card because we don't take anything else! Suck on that, legislature!"), my reading is that the "intent of the legislature"^ clause would almost certainly preclude you from charging credit card surcharges and that a customer who sued you for doing so would win.

^"It is the intent of the Legislature to promote the effective operation of the free market and protect consumers from deceptive price increases for goods and services by prohibiting credit card surcharges[...]"

What about section (c)? That pretty clearly indicates the legislature probably intended my reading.

Also, it should be noted that PayPal's terms for merchants also state that surcharges are not allowed.

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