Retailers can claim a victory in the interchange fee lawsuit, where they will receive a 10 basis point refund on interchange for a period of eight consecutive months. Ten basis points may not seem like a lot of money considering average interchange fees hover around the 2% mark, but for retailers that are looking to squeeze every drop of profit possible, it can be significant.
The interchange fee refund is a good start, but what might be more significant in the long run is the ability for merchants to impose a fee on consumers that wish to use credit cards. In the past, merchants have been required to absorb this fee under the terms of their merchant account agreements. Specifically merchants have been prohibited from charging any type of fee that would discourage consumers from using a credit card.
Under the terms of the settlement, merchants will be free to impose a surcharge on credit card transactions up to a certain amount. This will start in early 2013. It will be interesting to see how merchants approach the market with their new ability to use surcharging as a way to modify consumer buying habits.
The surcharge only applies to credit transactions which have been in steady decline since 2008.
What’s really interesting about this move is the motivation for change set in play. Allowing merchants to assess surcharges for credit card transactions may pave the way for newer payment methods, including mobile.
Source Article: PR Newswire July 2012