Visa Releases Bulletin to Clarify Cash Discounting Requirements

The battle rages over merchant fees. Consumers argue that they deserve more choices. They complain that they should not be forced to pay hidden credit card fees that get passed along to them without their knowledge. Retailers want the ability to transparently disclose those costs to consumers, without getting in legal trouble with companies like Visa and MasterCard. They also want to provide customers with the flexible payment options they want.

Lately, as merchants win court battles and more states give them greater freedom, a seismic change appears to be imminent. The latest sign of that is that Visa took what appears to be a preemptive step to remind merchants of their obligation to adhere to Visa’s rules. In October of 2018, Visa issued a bulletin that clarifies its policy regarding merchants who offer cash discounts to customers. Some see it as a way for Visa to draw a line in the sand.

Merchants are Subject to Visa’s Rules

The bulletin reiterates that all U.S. acquirers, merchants, processors, and agents must comply with Visa’s strict stipulations. For example, merchants that add additional fees at the point of sale are subject to Visa policy as it applies to surcharging. Visa clearly prohibits the practice of adding an extra surcharge on top of the normal price for goods or services, and then giving a point-of-sale discount if the customer instead pays with a debit card or cash. Visa also offers guidance regarding signage posted to explain cash discounting to consumers.

Merchants Are In a Confusing Position

Merchants who don’t comply can face serious repercussions for noncompliance. But many are understandably confused by all the red tape and small print. Nevertheless, no retailer wants to wind up in court because of credit card fees. Neither do they want to keep paying higher shares of their bottom line revenues to enrich the coffers of credit card issuers. But major credit card companies like Visa and MasterCard have substantial financial interests to protect. For one thing, the fees they charge help subsidize their highly lucrative reward card programs.

A Simple Solution

Fortunately, merchants and consumers can take advantage of an uncomplicated solution to the complex issue of surcharging. The CardX company is offering a seamless turnkey surcharging platform that is 100 percent compliant with the rules of companies like Visa. The software incorporates a true cash discount, without adding cumbersome, tricky, hidden, or non-compliant fees at the point of sale. CardX automatically passes the fee on to the consumer. Or the consumer can avoid the fee altogether, by paying with a debit card or cash.

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Merchants and Consumers Both Win

Merchants who use CardX receive 100 percent of every credit card sale, without worrying about incurring the wrath of powerful companies like Visa. Consumers get what they want, by not being unfairly or unwittingly overcharged. They can exercise the option to pay with cash or a debit card and not get stuck with a surcharge. Merchants don’t have to worry about legal consequences, as long as they are in states where surcharging is now permitted.

That’s a win that retailers and consumers can both celebrate, as they head into the biggest shopping season of the year.