Surcharging
One of the core tenets of the consumer experience is that the stated price of an item — as advertised — is the actual price paid at checkout. This fundamental consumer protection has been recognized by governing bodies around the world.
Visa is committed to empowering consumers through products and resources that allow them to conveniently, securely and responsibly manage their finances. As such, Visa does not allow merchants to charge consumers a fee for using a Visa card because we do not believe that cardholders should be penalized for using their cards. Checkout fees on purchases are harmful to consumers and unfairly shift the cost of electronic payments onto consumers. In fact, ten states ban businesses from the practice to protect consumers, including California, Colorado, Connecticut, Massachusetts, New York and Oklahoma.
While many countries around the world prohibit surcharging, a few countries, such as Australia and the United Kingdom, have allowed it with harms to consumers as the evidence suggests. According to a report out of Australia1, “Merchants have imposed surcharges to a greater extent than is justified by their costs. On average, surcharges on users of MasterCard and Visa cards have exceeded average merchant service charges.” The experience is similar in the United Kingdom. According to the Office of Fair Trading2, retailers have imposed surcharges that exceed their costs to accept cards. In other words, surcharges have become a new profit center for retailers.
Visa supports retailers’ choices to offer discounts to consumers who pay with cash or use their debit card with a personal identification number. Retailers can also shop around among competing financial institutions for the best card acceptance prices offered to them, or they can choose to accept only cash or checks. Retailers can implement all sorts of “steering” strategies, such as asking the consumer to pay with a different form of payment. Visa supports all of these options as effective ways for retailers to manage their costs while also protecting the consumer.
1 CRA International. “Regulatory intervention in the payment card industry by the Reserve Bank of Australia: Analysis of the evidence.” April 2008.
2 Office of Fair Trading. Decision No. CA98/05/05. September 2005.
