With tremendous momentum for passing on the credit card fee – whether in the form of a surcharge or cash discount – it’s no surprise that merchants and providers are asking what these rules mean to them.
Last year, American merchants paid $77 billion in fees for accepting credit cards.
According to “Airlines cash in on loyalty credit cards” WSJ, 8/27/2018.
These costs, however, are shifting more and more to the consumers who choose a credit for convenience or rewards. Merchants have embraced surcharging as a means to push back against the rising cost of credit card acceptance, which has increased 24% for Visa and MasterCard rewards cards in just four years. Interchange has another fee increase due this April 2019. The cost of rewards cards shifts from the merchant to the card presenter who then becomes motivated to choose a lower-cost option.
With the United States increasingly adopting Australia’s model – where 42% of all merchants and a full 60% of large merchants pass on the credit card fee today – we can expect to see more enforcement from the card brands and state attorneys general should these practices cross the line.
The biggest winners, then, will be the companies getting on the right side of the rules. To get started there are some important things to know.
Read the full article on SBDC website.