MasterCard and Visa credit card users might see a surcharge of up to 4 percent on their receipts

[brynne]

MasterCard and Visa credit card users might see a surcharge of up to 4 percent on their receipts

 

Merchants are allowed to add an extra fee to credit card purchases starting Jan. 27. The surcharge is the result of a class-action lawsuit brought by major retailers against MasterCard, Visa, and several other banks and credit institutions.

 

Starting Jan. 27, merchants will be allowed to add a surcharge of up to 4 percent to payments made with Visa or MasterCard.

 

 

Starting Sunday, consumers might have to pay more to use credit cards.

Merchants who accept MasterCard and Visa will soon be able to tack a surcharge onto your bill. The surcharge is fallout from a class-action settlement reached last July that ended years of legal battles between merchants on the one hand, and banks and credit card companies on the other.

Along with paying a group of retailers $6.05 billion, Visa, MasterCard, and several banks and credit card institutions agreed to allow merchants to charge an extra credit card fee starting Jan. 27.

RELATED: VISA, MASTERCARD IN $6B ANTITRUST SETTLEMENT, LARGEST IN U.S. HISTORY

Ever seen a “cash only” sign at a mom and pop store? All retailers have to pay a percentage of their profits to credit card companies in order to process in-store credit card payments. Smaller merchants who don't want to take this transaction fee out of their profits might institute a “cash only” policy. Other stores establish an unofficial minimum for credit card purchases or factor the transaction fee into their prices.

 

The surcharge proposed by last year’s settlement is supposed to be equal to the cost of processing a credit card transaction, which usually comes out to about 1.5 to 3 percent of the purchase. According to the settlement, merchants can’t charge consumers more than 4 percent. They also won’t be able to add extra fees to debit card transactions, NBC News reports.

Despite the changes, few merchants seem willing to add to their customers’ costs.

RELATED: MASTERCARD SAYS IT IS INVESTIGATING A POTENTIAL SECURITY BREACH

Credit card surcharges are illegal in 10 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Instead, retailers hope the deal will inspire competition between credit card companies and encourage a reduction of transaction fees. But credit card companies say that the fees, called interchange, are an important part of running card programs and accounting for the risk of nonpayment or fraud, according the Electronic Payments Coalition.

Credit card surcharges are illegal in some states, ABC News reports. The surcharges won’t affect consumers making credit card purchases in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Merchants who want to start charging extra have to take a couple of steps to warn consumers about the change. They will have to post a sign at their storefront announcing the extra fee. They’ll also have to disclose the fee at the checkout counter and on the

receipt, according to the EPC.

 

RELATED: CARD SNAFU DRIVES CABBIES MAD

Since some stores already factor interchange fees into their pricing, Edgar Dworsky, founder of ConsumerWorld.org, fears that some merchants would “double-dip” and charge consumers twice.

“It’s predictable what’s going to happen,” Dworsky told NBC News. “We’re at the top of the hill and we’re going to start going down that slippery slope.”

Some of the country’s largest retailers are holding off on adding a fee to credit card purchases made in their stores. Wal-Mart, Target, Sears, and Home Depot told NBC News that they do not plan on taking advantage of the new rule. Rite Aid doesn’t plan on adding surcharges as well, the Wall Street Journal reports.

Some retailers might still be waiting to see how the case plays out in court. U.S. District Court Judge John Gleeson gave the settlement a tentative okay in November. The National Retail Federation is not a party to the lawsuit, but claims that their members would be negatively affected by the settlement. They plan to challenge the judge’s verdict in court, according to a press release.

A final ruling on this case will be made later this year, meaning modifications to the settlement might surface later on.

[rolf]

This already happens outside the USA. I can use my credit card (Mastercard) all over the world, but once I start using it for buying things with a lower profit margin (e.g., computer components from a web shop), an additional fee is added (1.5 or 2%). As well as for American Express, about half the company's which allow you to pay by AE ask for a higher fee (4% is not uncommon). Not that weird though, buying with Mastercard is free for me (10E/year, ~13$), but keeps my account (by debit card) without hitting the red. However now it's a shame that I have to check whether I might want to use my debit card of master card outside the Netherlands as well, outside the Netherlands my debit card isn't always accepted so Mastercard was default.

[Octane]

That is retarded

[Jefke]

This already happens outside the USA. I can use my credit card (Mastercard) all over the world, but once I start using it for buying things with a lower profit margin (e.g., computer components from a web shop), an additional fee is added (1.5 or 2%). As well as for American Express, about half the company's which allow you to pay by AE ask for a higher fee (4% is not uncommon). Not that weird though, buying with Mastercard is free for me (10E/year, ~13$), but keeps my account (by debit card) without hitting the red. However now it's a shame that I have to check whether I might want to use my debit card of master card outside the Netherlands as well, outside the Netherlands my debit card isn't always accepted so Mastercard was default.

 

I only saw a few shops actually charging for creditcard use (between 1.5-2% like you said)

Think I have never paid that additional fee when buying computer parts though, but well I most of the time pay with sofort directebanking or mistercash (both comparable with Ideal) or through paypal (does paypal charge for paying with creditcard, should check that)

 

 

4% of a high additional fee though

[BAMA]

I have been charging additional 2% on customers credit card. It costs me everytime i swipe a customers card and i make them aware of it,,only had like 3 customers pay in cash after i tell them. Another thing too,,,,some Mastercard cards have a chip in them(they say it's not,,but it is there)and can be hacked very very easily over wifi,,,,be careful! O,,btw,, i sell utility,,cargo trailers,,car haulers and anything in between along with motorcycles,,atv, and race cars,,so i deal with alot.

[Vanaraud]

I don´t get it why anybody has to pay anything extra for using their "money". I mean we are not living in 2nd century anymore when default payment methods were seashells and horses. We are living in 21st century when electronic payment methods are not even "the future" but more like "past". And why should banks make millions net profit just we could use "our" money? Totally eludes me.

[rolf]

I don´t get it why anybody has to pay anything extra for using their "money". I mean we are not living in 2nd century anymore when default payment methods were seashells and horses. We are living in 21st century when electronic payment methods are not even "the future" but more like "past". And why should banks make millions net profit just we could use "our" money? Totally eludes me.

It costs the company's where 'we' buy money to buy with credit card, MC asks for a 1~2% fee (straight from my head), for AMEX it's more (and hence also the reason why not every shop accepts AMEX). On the other hand, cash isn't 'free' as well, getting the good security to handle cash isn't cheap either. In the Netherlands, the debit card is the cheapest and most common used next to cash, even though it costs about 0.10E for each transaction (10 years ago?), monthly fees and the electronics to handle it (couple hundred + ISDN line). I think those costs should (all) be in the product price, but apparently not everyone agrees. And that's a good point, in the Netherlands it is really not a problem to force the use of the debit card and for online shopping, iDeal (nation-wide system for bank transfers, supported by all (major) banks and pretty much all shops these days). Credit cards are not necessary in the Netherlands and avoiding additional costs is a good thing for this