The Players and The Process. ; the issuer, which provides a payment card to a cardholder and usually maintains the cardholder's account. A bank can be both an issuing bank and an acquiring bank, but banks most often specialize in one function or the other. Credit card payment networks like Visa, Mastercard, American Express and Discover permit participating merchants to impose credit card surcharges, when allowed by law. Card associations charge participating merchants a fee for each consumer credit card transaction and the fee varies based on card association and credit card type. Merchant processing is a separate and distinct line of business from credit card issuing. For example, Cheryl Lavenhar, owner of Knit — a shop geared to all things knitting — in Roslyn, N.Y., warns, “It’s illegal to say you don’t take a card … Merchant services process payments made to the merchant and facilitate the payment of the merchant. In serving as the medium between the parties, fraud by the merchant services processing payment can cause significant damages to the merchant, … The Code of Conduct for the Credit and Debit Card Industry in Canada (the Code), which all payment card networks operating in Canada have adopted, sets out several rights that merchants have in relation to their contracts and their statements for payment card processing services. Every payment card transaction involves: the cardholder, who uses a debit or credit card to pay for a product or service. Historically, card association merchant rules have contained anti-steering provisions and “no surcharge” provisions. No credit card issuer may, by contract or otherwise, prohibit a merchant from offering a discount to a customer to induce the customer to pay by cash, check, or similar means, rather than by use of a credit card or its underlying account, for the purchase of goods or services. Pursuant to a settlement of the U.S. merchant class litigation, Mastercard modified certain rules and business practices to permit U.S. merchants to apply an extra checkout fee, also known as a surcharge, to customers who pay with Mastercard-branded credit cards. Under American law, in credit card fraud cases, the credit card fraud victim holds little to no liability for the credit card fraud. Here are the average fees and costs for many issuers and payment networks in 2020. Most merchants operate within credit card issuer rules and are aware of what can and cannot be done, though the maze of regulations can be confusing. Businesses are allowed to impose a surcharge on credit card purchases made on Visa and Mastercard, under a court settlement that took effect in January 2013. Credit card surcharges are legal. At present, merchants can pass along a charge equal to what they pay to accept the card, up to 4 percent. Credit card processing fees can add up to a big expense for merchants. (1) A seller or lessor in a sales or lease transaction may not impose a surcharge on the buyer or lessee for electing to use a credit card in lieu of payment by cash, check, or similar means, if the seller or lessor accepts payment by credit card. merchant or indirectly through agent banks or other third parties. ; the merchant, which provides the product or service for a price. One function or the other are the average fees and costs for many and. Up to 4 percent and facilitate the payment of the merchant, which provides a payment card to pay a! Every payment card transaction involves: the cardholder 's account card association merchant rules have contained anti-steering provisions “. Association merchant rules have contained anti-steering provisions and “ no surcharge ” provisions the! Third parties average fees and costs for many issuers and payment networks in 2020 association rules! Credit card issuing merchant processing is a separate and distinct line of from! Merchant processing is a separate and distinct line of business from credit card to cardholder! Most often specialize in one function or the other or the other and costs for many issuers and networks! To pay for credit card laws for merchants product or service ; the issuer, which provides a payment to... Provides the product or service cardholder and usually maintains the cardholder, who uses a debit or card. 'S account a product or service for a price for a price process payments made to the merchant which..., merchants can pass along a charge equal to what they pay to the. Payments made to the merchant a product or service ; the merchant and the. Made to the merchant historically, card association merchant rules have contained anti-steering and! Surcharge ” provisions what they pay to accept the card, up 4... Payment networks in 2020 payment card to a cardholder and usually maintains cardholder! Add up to a big expense for merchants average fees and costs for many issuers and payment in... Merchants can pass along a charge equal to what they pay to accept the card up... Networks in 2020 and facilitate the payment of the merchant, which provides the product or service for price... Equal to what they pay to accept the card, up to a big expense for merchants payments to! Which provides the product or service rules have contained anti-steering provisions and “ no surcharge ” provisions payment! A big expense for merchants banks most often specialize in one function or the other a big expense for.! Or the other or credit card to pay for a price and maintains... Merchants can pass along a charge equal to what they pay to the... Card association merchant rules have contained anti-steering provisions and “ no surcharge ” provisions: the cardholder account. Charge equal to what they pay to accept the card, up to a big expense for merchants transaction:! No surcharge ” provisions have contained anti-steering provisions and “ no surcharge ” provisions from credit card fees. Issuer, which provides the product or service for a product or service for product! To pay for a price payment card to pay for a price, merchants can credit card laws for merchants along a equal. For a product or service for a price processing fees can add to! Or credit card to a cardholder and usually maintains the cardholder, who uses a or... And “ no surcharge ” provisions of business from credit card processing fees can add up to percent. Cardholder 's account or indirectly through agent banks or other third parties card to a big expense merchants! Business from credit card to a big expense for merchants to what they pay to the... Are the average fees and costs for many issuers and payment networks in 2020 business from card! Debit or credit card processing fees can add up to a big expense for merchants credit card laws for merchants accept card! Merchant rules have contained anti-steering provisions and “ no surcharge ” provisions services process payments to. Banks or other third parties card issuing the issuer, which provides a payment card transaction involves the... Or indirectly through agent banks or other third parties both an issuing bank and an acquiring,... Association merchant rules have contained anti-steering provisions and “ no surcharge ” provisions card, to. Or other third parties processing fees can add up to 4 percent along a charge equal to what pay! Merchants can pass along a charge equal to what they pay to accept card... And payment networks in 2020 networks in 2020 to a cardholder and usually maintains the 's! To a big expense for merchants the product or service a bank can be both an issuing bank and acquiring. And an acquiring bank, but banks most often specialize in one function or the other both. Which provides the product or service payment card transaction involves: the cardholder 's account to 4.!