MOUNT SNOW, Vt. – A cacophony of voices made the conference center here seem like an unruly classroom. The air was buzzing with questions and comments about merchant surcharging as attendees spoke out of turn at the Northeast Acquirers Association annual conference.

One notion that emerged from the furor Wednesday was that the industry won’t meet the surcharge deadlines mandated in the settlement of a swipe-fee lawsuit merchants won against Visa, MasterCard and some financial institutions.

The settlement of the class-action suit awarded more than $6 billion to merchants that have accepted credit cards, established a $1.2 billion fund to lower interchange fees for eight months and allowed merchants to inform consumers of interchange fees – a process known as surcharging.

Donna Embry, the conference speaker who unleashed the torrent of commentary over surcharging, told the crowd that notifying consumers of interchange fees may they prompt many to a to pay in cash or with prepaid or debit cards.

Any of those outcomes would reduce revenues for the independent sales organizations represented at the conference, said Embry, president of Midwest Acquirers Association and a senior vice president at Louisville, Ky.-based Payment Alliance International.

And the troubles don’t end there. Merchants that want to disclose the fees are required in the settlement to post signs at the point of entry to each store or website, give notice at the point of sale, and print the fee on receipts, she said.

An example of an acceptable sign at a doorway or landing page would read: “We impose a surcharge on credit cards that is not greater than our cost of acceptance.”

“Who would want to go into a store with a sign that says that?” Embry wondered.

Merchants were allowed to surcharge beginning Jan. 27, and are required to notify Visa, MasterCard and their acquirer 30 days before beginning the practice, she said.

Visa provides merchants with a notification form, and MasterCard requires notification from acquirers, Embry said.

Surcharging is permitted only on credit card transactions, not debit or prepaid cards, she noted. The practice can occur by brand, for all MasterCard, all Visa or all of both; or at the product level. An example of the latter would be surcharging on all Visa rewards cards.

Surcharges are capped at 4% of the retail price of the purchase and cannot exceed the merchant’s cost of acceptance. To maintain a “level playing field,” merchants must charge the same rate for all cards, including Visa, MasterCard, American Express and Discover.

Questions remain unanswered, Embry said. She advised attendees to ask processors if their systems will be able to break out the charges. Some POS systems may not be ready for surcharging, she suggested.

More changes could arise, too, Embry cautioned. The Consumer Financial Protection Board may question credit card fees if the public becomes aware of how much they cost, she said.

It remains unclear exactly what merchants may choose to surcharge, Embry said. Big box retailers have gone on the record as saying they won’t disclose the fees, she noted.

States that don’t allow surcharging include California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, Embry said.

More information is available at, and, a site dedicated to the settlement.


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