We are now almost a year removed from the November 2012 settlement that allows merchants to surcharge credit card payments. Has anything changed?

In short, no.

Surcharging is defined as a fee that is added to credit card payments made at the Point of Sale (POS). I blogged on this surcharging back in January, indicating that the new rules were confusing, overly restrictive, and largely unusable in the current form. Unfortunately, nothing has changed since then.

The most confusing element is the fact the following 11 states prohibit surcharging:

  • California
  • Colorado
  • Connecticut
  • Florida
  • Kansas
  • Maine
  • Massachusetts
  • New York
  • Oklahoma
  • Texas
  • Utah

In addition, up to 20 states are also considering bans on surcharging. The New York ban on surcharging is in the midst of a significant legal challenge. These state prohibitions directly conflict with the new surcharging rules from Visa and MasterCard.

Want to learn more on surcharging?

Utilities can visit the Visa web site for general requirements and information. Bear in mind, even if a utility wanted to implement surcharging and was in a state that allowed them to do so, both the POS system and the acquirer must also support the transmission of the surcharge data to the card brands. It’s just not something many processors and acquirers are offering today.

As an example, First Data Merchant Services, one of the largest merchant processors in the world, indicated recently that they will not be adding support for surcharging to their platforms at this time, issuing the following statement:

“For a variety of factors, including the number of states currently or looking to prohibit surcharging, as well as the complexity to implement the infrastructure across various acquiring platforms and POS environments, First Data has decided not to implement support for this enhancement.”

Ironically, the utility sector is one of the few industries where imposing surcharges to credit card payments at the counter actually does make sense.