MasterCard and Visa charge retailers a fee for processing payments. Currently, both companies prohibit retailers from recouping those fees from the consumers who use their credit card. That practice may be about to come to an end.
The ban on adding surcharges to recoup fees is about to be eliminated or altered as the result of multiple lawsuits brought against MasterCard, Visa, and other large banks that issue credit cards. ”Merchants prefer complete flexibility, and in their eyes relaxing some of these rules like surcharging [is] something that will be permanent,” said Glenn Fodor, an analyst with Morgan Stanley.
Credit card issuers charge retailers varying amounts, but let’s assume a 2% charge per transaction. When this litigation is settled, that 2% will most likely be passed on to every card user in the world. That isn’t much when taken individually, but add all of those extra fees up, then assume that most retailers will try to make a profit on the deal. That means they will pay 2% and charge 3%. What a great prospect for consumers who are struggling through an economy that is as sluggish as molasses in December.