Can a merchant charge extra for accepting credit cards?

No, the average merchant cannot charge extra for accepting credit cards. This is clearly stated in merchant agreements and the individual Operating Guidelines of  Visa, MasterCard, American Express and Discover.  However, certain merchants can charge a convenience fee for accepting credit cards if that is not their normal business procedure. Typically we see this with government controlled utilities such as a water bill. The convenience fee amount is frequently regulated by state law.

Merchants should calculate their credit card processing effective rate and use that to determine overall product mark-up needed to cover their costs. There two other ways to control costs.

  • Setting an acceptable minimum credit card charge.
  • Offering a discount by steering consumers to use specific card types, for example, debit.

Reference articles:

Is there a way to automatically discount for debit cards?
MasterCard and Discover minimum maximum transaction limits
Visa, MasterCard minimum transaction limit changes

4 thoughts on “Can a merchant charge extra for accepting credit cards?

  1. Admin moved comment here from PCI compliance article: ” Although charging more for a credit card transaction is frowned upon by VISA/MC you can however set your price at a certain level to take into consideration the fees charged by V/MC and the processor and then instead offer a “cash discount” to customers paying cash instead of Visa/MC. Bottom line is the merchant has no control over the fees. I think it is a crime that the card issuers and processors charge the merchant for customers to use charge cards when ultimately the charge should go to the customer.”

  2. HI Todd, thanks for your comment.
    Merchants DO have more control over fees than they may be aware. Interchange optimization, least cost routing, and automated discounts are all tools we provide merchants to help them control costs.
    Consumers don’t pay directly for merchant overhead such as lights, rent etc nor the cost to manufacture a product and credit card processing fes should be no different. The merchant is being provided a service- among others, the ability to accept plastic and have that transaction processed in a couple of seconds.

  3. All major card companies actually tell businesses they can offer this discount.

    Visa “Merchants may steer customers to an alternative method of payment, such as providing discounts for cash” -Visa 160210-150210-000777

    MasterCard “A Merchant may provide a discount to its customers for cash payments” -MasterCard 5.11.2

    American Express “Merchants may offer discounts or in-kind incentives from their regular prices for payments in cash” -American Express 3.2


  4. Thank you discount man. You’re right, cash discounts have always been an option. What I meant to say was discount for steering to lower cost cards. In the past it has been against operating regulations to do that.

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