The battle between the merchants and the credit card companies just ended.  On Friday, July 13, small and large businesses reached an agreement with Visa and MasterCard to no longer charge surcharge fees.

 

To many who don’t know, everytime a person swipe their credit card, the merchant or store is charged an “interchange” fee (1 to 3%) by the credit agencies.  This surcharge has become overbearing for businesses who inturn has had to spend more dollars to run their business.  So, the merchants decided to take Visa and MasterCard to the U.S. District court in hopes of overturning the surcharge rule.

 

What does this mean for you??   Well, instead of the having to pay the credit issuers, businesses may pass on “swipe” fees to the customers.  This additional fee will tack on an estimated 2 to 4% to your total purchase price.  These fees will go toward processing your credit card, fraud protection, and provide temporary funds while your transaction is pending.

 

According to settlement documents, here are a few things you should know:

 

  • Debit Cards will not be affected.  Debit card fees were adjusted (reduced) through a separate financial provision in 2011.
  • Merchants will begin imposing fees by 2013 (after the U.S. District court approves the current settlement).
  • Merchants will have a cap.  Restrictions will be placed on merchants so that customers will not be overcharged.
  • Not ALL 50 states will incur these fees.  New York, California, and Texas, for instance, have laws prohibiting surcharges.
  • American Express and Discover currently charge swipe fees.

 

 

Source: WSJ.com