Synergent Card Services Executive Looks Ahead to Merchant Response to New Credit Card Fees

rhiggins-105x150.jpgThe news is everywhere, being communicated in both mainstream media and trade publications alike: the MasterCard and Visa networks have advised that effective January 27, 2013, U.S. merchants will have the option of adding a surcharge to certain credit card point-of-sale (POS) transactions.

Reflecting on the effect this news will have on credit unions, Rebekah Higgins, Assistant Vice President, for Synergent Card Services, said that the change will not have a significant impact on states that that prohibit fees, and also noted that there are significantly fewer credit cards issued by credit unions than debit cards, also lessening the impact. “Merchant surcharging or Check Out Fees are only allowed on credit cards and cannot be charged regardless of how a transaction is processed on a debit or pre-paid card, and merchants cannot charge more than the cost of acceptance of the transaction which is also capped at 4% of the transaction amount,” she explained. “In addition, the merchant must post a surcharge notice on the point of entry, at the register and also as a separate line item on the cardholder’s receipt.”

She said that looking ahead, she will be watching to see what the merchant response is to this added fee as they strive to remain competitive. “It will also be interesting to see if merchants who do assess this fee will in turn reduce the cost of their goods and services as these fees are taken into consideration as they determine the cost of merchandise,” she added. “It will also be interesting to see whether this change will cause additional states to introduce legislation to prohibit these types of fees.”

Higgins recommended this resource for credit unions looking to learn more about how this issue may impact their members.