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A payment surcharge, also known as checkout fee, is an extra fee charged by a merchant when receiving a payment by cheque, credit card, charge card, debit card or an e-money account, [1] but not cash, which at least covers the cost to the merchant of accepting that means of payment, such as the merchant service fee imposed by a credit card company. [2]
Credit card surcharges can’t exceed the cost of accepting the card or 4 percent, whichever is the lower amount, even if it costs the business more than that amount to process your credit card ...
Credit card surcharges are becoming more common, but they’re not legal in every state.
Credit card surcharges are applied when you use your credit card to make a payment. In states where surcharges are legal, they must be clearly displayed at the point of sale and on your receipt.
The Durbin amendment, implemented by Regulation II, [1] is a provision of United States federal law, 15 U.S.C. § 1693o-2, that requires the Federal Reserve to limit fees charged to retailers for debit card processing.
Debit cards and transactions in the ten states that prohibit credit-card surcharges will not be affected. Many large retailers, such as Wal-Mart and Target have opted not to impose surcharges. [12] In the event of a return, surcharges are refunded along with the purchase price of the merchandise. [13]
Usually for sales/services transactions it is a fee that a merchant's bank (the "acquiring bank") pays a customer's bank (the "issuing bank"). In a credit card or debit card transaction, the card-issuing bank in a payment transaction deducts the interchange fee from the amount it pays the acquiring bank that handles a credit or debit card ...
Beginning this week, merchants may charge a 4% premium for people who use credit cards for their purchases. A settlement in a legal action between card companies and merchants has triggered that fee.