Why is credit card surcharge an issue for businesses?

[Adam Fleming]

The credit card surcharge issue has always been a tricky one in the US. Back in 2005, this issue was the subject of an antitrust lawsuit, and the resultant judgment, which came in mid-2012 prohibited credit card surcharge in ten States. Another 12 States are in the process of implementing their laws.

Although credit card regulations have traditionally opposed surcharging; companies have been circumventing merchant rules to ensure that credit card surcharge continues to be made. Even as State laws will continue to override networks merchant rules; companies have been looking out for ways to skirt the laws.

The credit card surcharging issue in the US

Why is credit card surcharge an issue for businesses? It is because the credit card surcharge is the last link in the payment chain and causes a business that makes use of this facility to incur expenses. In simple terms, this is the checkout fee that gets added to every consumer’s shopping bill whenever a credit card is used to make payments for the purchases made at the business. Businesses are not willing to bear this expense and like to pass it on to the consumer.

The court judgment of 2012 permitted charging of credit card surcharge for certain card transactions from January 2013. As a result, there has been a change in not only merchant processing transactions but also of credit card usage. The settlement makes it mandatory for businesses that levy the credit card surcharge to follow requirements relating to consumer disclosure and to set limits on the amounts for which the surcharge is collected.

They should also notify Visa and their acquirer of their decision to charge credit card surcharge a month before they begin to levy the surcharge. These rules vary from State to State, and the business is free to choose which brands of its outlet it wants to keep the credit card surcharge.

Clear the confusions about the issue

A more detailed and clear understanding of this topic will be offered at a webinar that is being organized by Compliance4All, a leading provider of professional trainings for all the areas of regulatory compliance. Ray Graber, a highly experienced professional in the payment industry, who brings deep and profound understanding of the way banking and finance converge with technology, will be the speaker at this webinar.

Please register for this webinar by visiting What are the Stipulations for Compliance

Clarifying the important issues relating to credit card surcharging

Ray Graber will offer clarity on the changes in the rules and will explain who benefits from the changes, and how these changes are going to affect the retailers and customers. He will explain the perils of an uninformed reaction to surcharging by end-user organizations. He will show why it is important to first look at the big picture of credit card surcharging, since end-users should also educate suppliers about the economics of card acceptance, pointing out the savings possible and other benefits. Suppliers should not be adding a surcharge when they are reaping the rewards. Ray will explain how they might overlook the benefits of card acceptance, as well as the cost of other payment methods like checks and cash.

Being of high value and importance to every level of employee who works in the credit card industry, such as financial officers, small business owners, corporate risk officers, internal auditors, operational risk managers, credit card program administrators, CPA’s and attorneys and legal staff; this session will cover the following areas:

• What changed in the rules?
• Why did it change?
• What rules apply to surcharge?
• Survey results
• Who may benefit?
• Will this change anything?