So what does the recent class-action settlement, allowing merchants to charge a fee (i.e. a surcharge) on credit cards, mean for utilities? In short, probably nothing.

It may be too soon to tell. The settlement comes with myriad caveats and restrictions that make it unlikely that utilities (or any merchant, for that matter) will be able to use it to implement a credit card surcharge in the near future.

Take a quick look at the revised regulations, which outline the following rules:

  • Merchants are required to notify (or sign-up with) Visa and MasterCard at least 30 days prior to issuing a surcharge.
  • Debit cards and prepaid cards are not included in the settlement.
  • Disclosure must be made to customers at the point of entry, at the point of sale, and directly on the receipt.
  • If American Express is accepted by the merchant, then a surcharge cannot be levied on any card.
  • At least ten States have laws that forbid surcharges, which directly contradict the new card rules.

At first glance, the settlement appeared to have relevance for utilities hoping to reduce the cost of credit card fees. In reality, the settlement is likely unusable. In fact, there are rumblings of numerous ongoing lawsuits by merchants unhappy with it. Stay tuned…