Can merchants charge a fee for using a credit card?
From MasterCard's merchant rules - Visa has similar wording in their agreement.
5.9.2 Charges to Cardholders
A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments. A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly permitted in writing. For purposes of this
1. A surcharge is any fee charged in connection with a Transaction that is not charged if another payment method is used.
2. The Merchant discount fee is any fee a Merchant pays to an Acquirer so that the Acquirer will acquire the Transactions of the Merchant.
10A.3 Charges to Cardholders
Rule 5.9.2 does not apply in the European Economic Area.
If a Merchant applies a surcharge for payment by Card, the amount or method of calculation of the surcharge must be clearly indicated to the Cardholder at the POI location and must bear a reasonable relationship to the Merchant's cost of accepting Cards.
I just read my merchant member agreement with V/MC and it states No, the merchants may not impose any sort of fee. This is a Visa/MasterCard regulation that clearly states that merchants may not impose any surcharges or minimums or maximums. Please read your merchant agreement carefully; As stated earlier, one may give the customer a cash discount...that is the only way around it.
I would have to dig out my merchant agreement and double check on this - but when I got my credit card terminal I know that we were told we could NOT charge anything additional for credit card purchases. The part I am unclear on is whether that was a violation of my merchant agreement, or just illegal. What I was told by other merchants is that you can get around it by offering a "discount" for using cash and telling the customers that the prices posted are assuming that you are paying with cash. That being said, I have seen many other stores charging a usage fee (which I can not blame them at all as the processing expenses really add up), but I have noted that it has always been little mom&pop type businesses doing it and never any large or chain type store.
The first author is correct that merchant agreements prevent most merchants from charging a convenience fee. That being said, Visa, MasterCard, American Express and Discover will allow service providers to charge a fee. For example, there are companies who accept tax payments on behalf of the IRS and many states that charge a convenience fee. The card companies even promote this on their websites. If you visit Visa's website and search for "convenience fee" you'll find more information.
The first answer needs elaboration on the part of section 10A.3, as reading this as it was originally posted led to the belief that section 10A.3 clearly contradicted the preceding disclosure. In the actual MasterCard merchant guide it is clearly designated that the information from 10A.3 applies only in Europe, and that section 5.9.2 is the applicable policy guideline for merchant transactions within the United States and Canada.
Also, it should be said that the original answerer violated copyright law, Wiki s terms of service, and MasterCard's proprietary data clause which is applicable to any person who views the content of its merchant guide. The verbatim posting of content from that guide that exists here is illegal, and should be modified to exist as a paraphrase, though that would still violate MasterCard's proprietary data clause.
At present (Sept 2010), the Mastercard merchant rule is located in Section 5.11, Prohibited Practices. While surcharges are not a violation of federal law, they are illegal in 10 states. (See the discussion page for a list)
Yes; the credit card companies charge the merchants in order to receive payments from them. In some cases (usually at small businesses or ones that do not do a lot of business monthly) the merchants can charge a small fee associated with using the credit card, or set a minimum amount to avoid the fee i.e. any purchase under $5 gets charged a fee, anything above that amount doesn't.
The merchant agreements that they have with the credit card companies generally prohibit them from charging extra for the use of the credit card. However, some places offer a "discount" for cash, which works out to essentially the same thing, and while it's becoming less common than it was a few years ago, some merchants do charge a "transaction fee" for using a debit card (they are required to notify you of this; the notification…
Often, yes. It is usually part of the contract the merchant signs with the credit card company, that they cannot charge the customer an additional fee when using a card, that would not apply if the customer is using another method of payment. So to get around it, the merchant raises all the prices, and offers a discount to people paying with cash.
Do credit card companies prohibit merchants from requesting IDs of people using their credit cards to make purchases?
No. Merchants are within their rights to request identification when a credit or debit card is used. They also have the right of refusal. -------------------------- The above answer is only partially correct. Merchants do not have the right of refusal. Credit card companies do not prohibit merchants from requesting IDs, but most credit card companies require the merchant to process the transaction if the customer refuses to show an ID. Based on the comments from…
Cash is an acceptable form of compensation to pay all debts, public or private, "legal tender". Credit is only an equivalent. Merchants charge higher prices for credit in order to defray some of the costs associated with accepting credit cards. A merchant decides independently if he will accept credit cards as a form of payment for goods and services rendered. Once a merchant makes this decision, he must then pay a series of other businesses…
I'm not sure about your particular case, but I know that unlike consumers, retailers are generally liable for check/credit card fraud. I know of a particular case where Home Depot took the loss for an unauthorized $3,000 credit charge for a generator purchased in person with a stolen credit card. There's more info for merchants on this website: merchantaccountadvisor
An ARN in credit card transactions is the Acquirer Reference Number, a unique number that tags a credit card transaction when it goes from the merchants bank (The Acquirering Bank) through the card scheme to the cardholders bank (The Issuer). If you are querying a credit card transaction, having the ARN will allow your Bank and the merchants Bank track the transaction.
Certainly! Making purchases by credit cards also costs the merchant money, too. They have to pay a base fee for each transaction to cover the costs associated with billing and collecting the amount that was charged. Most merchants absorb this charge as part of their overhead, but smaller merchants can't always absorb these charges, so they are passed along to the consumer.
Typically 2-3% for mastercard and visa. I believe American Express is more. Texas Parks and Wildlife charges 2.25% extra to renew your boat registration online. I think that is to make up the credit card charge backs. ( on a $53 fee). I think creditors also have a minimum charge so that on small purchases ( < $1-4?) the retailer looses money when you use a credit card.
This happens when someone pays too much money on their credit card statement. You have money "on credit" in addition to your credit limit. These amounts can be refunded but will usually remain in the account until you charge using the card again, then those funds will be applied towards your purchases on credit.
Cash is an acceptable form of compensation to pay all debts, public or private, "legal tender". Credit is only an equivalent. Merchants charge higher prices for credit in order to defray some of the costs associated with accepting credit cards. A merchant (grocery store, shoe store, etc.) decides independently if they will accept credit cards as a form of payment for goods and services rendered. Once a merchant makes this decision, he/she must then pay…