Jan. 27 marked the first day merchants nationwide could hit consumers with a checkout fee for using a credit card. Nothing has changed overnight, but some merchants are likely to test the waters sooner than others.

When Visa Inc. and MasterCard Inc. settled years-long litigation over interchange fees last summer to the tune of $7.2 billion, one of the settlement stipulations included dropping the "no surcharge" rule that prohibited merchants from adding their own fees to pass down to consumers.

"I believe it will happen, especially with Internet merchants," Mark Horwedel, CEO of the Merchant Advisory Group, says.

Some airlines are already pricing credit and debit payments separately, and motorists can expect to see new fees as they fuel up, Horwedel says.

He emphasizes that any merchant surcharging, which applies only to credit cards, will happen slowly.

"Merchants are very cautious on this score," Horwedel says. "I don't think this will be an overnight development, but will become more common over time, in spite of all the wishful thinking from the card community."

Even with the interchange settlement, 10 states prohibit merchant surcharging, and other factors will make merchants reluctant to add a new fee for customers, says Jason Oxman, CEO of Washington, D.C.-based Electronic Transactions Association.

"Merchants will look very closely at the competitive landscape before putting extra fees on consumers, especially with the increase in online retail popularity," Oxman says.

A brick-and-mortar business owner would be hard-pressed to explain to customers why it will cost them more to use their preferred method of payment, Oxman says.

"It will be interesting to see what happens to merchants who decide to use the checkout fees and equally interesting to see [the effect on] retailers who choose not to use it," Oxman adds.

Merchant acquirer consultant and industry researcher Paul Martaus, of Mountain Home, Ark.-based Martaus & Associates, says a certain number of merchants "will always take advantage" of a new fee opportunity because they are "getting hit on all sides" by card brand and Payment Card Industry security standards costs.

The merchant community has "always felt like the whipping boy on fees," says industry analyst Russ Schoper of Atlanta, Ga.-based Business Development International Inc. But the economy is weaker than when the merchants first made the stipulation as part of the interchange litigation, Schoper adds.

These days, the pain a checkout fee could cause for consumers will make many merchants think twice, he says.

"It's like every time your customer uses a credit card, you are going to poke them in the eye," Schoper says.

Merchants planning to add the surcharge fee must follow various Visa and MasterCard rules, one of which is registering with the card network at least 30 days prior to implementing the fee, says Mary Bennett, director of government and industry relations for the ETA.

"We are hearing, initially, that the surcharge won't be adopted by merchants in a widespread manner," Bennett says. "People in the industry are not hearing about too many merchants registering, but that's just anecdotal information at this time."

MasterCard spokesman Seth Eisen says the card brands, as part of the swipe-fee settlement stipulations, cannot publicly disclose who, or how many, merchants have registered to implement the new checkout fee.

Visa and MasterCard require merchants who choose to surcharge to inform customers of the fees at the store entrance and point of sale. The card brands also state merchants cannot charge more than what they pay acquirers for credit card acceptance.

In its guidelines, Visa states merchants must surcharge Visa transactions at the same levels of competing cards' acquirer fees, if they are of equal or higher cost. Merchant checkout fees cannot exceed a maximum of 4% of the transaction, Visa states.

Shortly after the swipe-fee settlement, some merchants contemplated using the surcharge option as a potential bargaining chip for lower interchange rates when it was time to negotiate new contracts.

In the meantime, the Consumer Action group and the Electronic Payments Coalition used brochures and their websites to alert consumers about the new checkout fees.

The group tells consumers that checkout fees are not allowed in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

In addition, Consumer Action says consumers should know that an average surcharge should be no more than 1.5% to 3% of the total purchase. The organization also encourages consumers to "shop around to avoid checkout fees altogether" and to support merchants and retailers who choose not to charge a fee for using a credit card.

"The reality is that merchants will cover costs, regardless of a surcharge fee," Schoper says. "And so will MasterCard and Visa, as they will price their product accordingly."

Visa's Fixed Acquirer Network Fee illustrates how the card network can implement new fees to cover costs and generate revenue, Schoper says.

The new acquirer fee, which went into effect in April 2012, came under fire from acquirers and various associations, leading to a U.S. Department of Justice investigation of the fees. Visa did not respond by deadline to an inquiry for this story.

The Justice Department did not respond to an inquiry for an update on its investigation, and Doug Kantor, legal counsel for the Merchant Payments Coalition, says he has not heard anything new from the department regarding the fees.

"It's not uncommon for the Justice Department to take a long time to look into a complaint," Bennett says.

The ETA objected when the acquirer network fee was released because "we had to implement it, and we had very little notice" from Visa, Bennett says.

 "Visa is a public company and we don't begrudge them the right to price their business as they see fit, but we had no ability to plan for it," she adds.

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