US Fed mandates drastically lower debit fees

maybe credit card interchange rates will be next

[wingslevel]

See here:

[nytimes.com...]

the V/MC and large bank cartel took a serious blow yesterday. debit card fees will be coming down by about 75%.

lets hope that the similarly absurd credit card interchange fees are next in line.

[rachel123]

I believe most sites ask for all details before they get you to the confirmation page where the final total is listed. Extra costs like "handling", "insurance", "tax", "shipping" are all part of the same order and varies.

.

Typical checkout flow as I've come to expect it is two+ steps. The first step is where you enter your shipping address and billing address is different, and your choice of shipping method if applicable. This is the only information necessary to calculate "handling", "insurance", "tax" and "shipping." Coupons may be applied at this stage but not always.

The second step is where, being presented with the final grand total, I am asked to select a payment method and enter the information. If discounts are applied on this page, generally they come with an "Apply Discount" button that will refresh the current page with the updated total. I enter my payment information.

At this point I may or may not have yet one more confirmation screen where I am allowed to view all order details prior to final submit.

I simply will not enter my payment details before I know the final total. Why would I fish out my card only to find out that the site charges obscene shipping costs? (Not saying you do, just that the general perception I get when the grand total is not offered up front is that the site has something to hide).

Of course you may do what you want. It may violate your TOS with your providers. It may tick off some of your customers.

1. Can the merchant charge differently customers for the same product?
2. Do you think is illegal if additional charges added to the subtotal for an order? That is any additional charge.
3. Do you think private business are regulated by the gov for prices on products/services they sell/offer?

1. Of course, but if the customers find out about it they'll be irritated.
2. No. But in 10 states it IS illegal to add additional charges based on use of a CC#, and in all states it is against Visa/MC TOS. This is a fact. The workaround is to offer cash discount, or you may choose to accept the risk and operate outside the merchant agreement and/or law. Certainly you have a choice, and you accept the attendant risk.
3. Some are (utilities and such). In America, most aren't. Visa/MC are also not required to maintain your processing account, especially if you are found in violation of the TOS you agreed to when you opened the account.

Is it ridiculous? Are the big bad cc companies extortionists? Opinions may vary. But what is stated in the TOS is fact.

[LifeinAsia]

Can you answer these points?
1. Can the merchant charge differently customers for the same product?
2. Do you think is illegal if additional charges added to the subtotal for an order? That is any additional charge.
3. Do you think private business are regulated by the gov for prices on products/services they sell/offer?

1. Yes, within some boundaries. If you charge someone extra because he's a she or he's black or he's Jewish, you're definitely running afoul of the law. If you charge someone extra because he's paying with a Visa, you're running afoul of Visa's ToS (as has been repeatedly pointed out here).
2. It depends on what the charges are. Shipping/handling? Okay. Expedited shipping? okay. Extra just for using a Visa card? NOT OKAY.
3. In the 10 states mentioned, they are not regulating the price you are charging. They are regulating what extra fees you can charge. Visa is not regulating the price of your products/services, then are forbidding the practice of charging extra to pay with a Visa card.

Visa has no requirement to allow you to process their cards- it is a privilege that they have extended to you. With the privilege comes the responsibility to follow their regulations. You choose not to, fine- they can just as easily to choose not to allow you to charge Visa cards any more.

When it comes down to it, you need Visa a LOT more than they need you. So posting on a public message board that you are flaunting their policies is probably not the best thing to do if you want to continue processing with them.

[enigma1]

When it comes down to it, you need Visa a LOT more than they need you.

The conclusion from this discussion is precisely what I thought in the first place. It's up to the private businesses how to run their sites.

Why a customer will buy something in the first place from a site like this its not about the final total but perhaps how much he spends and if there is a service he needs in the future or if the site is legit. These aren't issues relevant with the thread but you wonder why someone will buy even if he knows about it.

Also most site owners do not have direct agreements with the cc companies but with intermediate payment processors. If you offer cash-back on certain orders is no different than charging extra for a different set of options the customer selects. And btw, what made you think that I have an agreement with any cc company if I use a payment processor?

All I am saying is that if a merchant decides to set an alternative price for a product due to the payment method like using cc or some other factor he won't have an issue. That's the argument here. You say he will which I find very strange.

If a credit card company decides to raise a red flag they are not going to ask you first. That's why they're also private businesses. They do whatever they want with their enterprise it's their right. And if a merchant treats payment methods differently or any other aspect of his checkout procedure is up to him. I believe the reason they have these terms in place is because some go and charge customers extra fees after the purchase. And that is fraud.

As of cart implementations there are all kinds of things merchants ask to integrate, each one different, don't expect to see stock carts with strange options. I run into cases where my cc was declined as "foreign" does that make the process illegal? I don't think so. Is up to the merchant to accept, decline in general treat differently each order. As of the consumer, if he has a choice, he will get the same item with the lowest price possible, rather than trying to figure out who adds extra fees based on the payment method.

You don't need to get stuck with the specifics, card number etc, can be very well setup a card type drop-down that you select during the checkout. These are implementation details before the final confirmation (since you are concerned about phishing)

[rachel123]

I believe the reason they have these terms in place is because some go and charge customers extra fees after the purchase.

No, they have these terms in order to prevent customers from being discouraged from using their cards. Visa makes money when people use their Visa cards. People will not use their Visa card if they discover the merchant charges them more for the convenience.

Therefore Visa requires that merchants not charge people more for the convenience. Yes the difference between surcharge for card vs discount for cash is purely semantics as the math all adds up the same. But semantics is important. You can give me a discount for using cash but you can not charge me more than the stated price for using a card. If you are presenting the surcharge as "handling" as opposed to a "discount" for cash, then you are in violation of Visa/MC TOS.

You will want to verify your TOS with the middle man that you signed an agreement with. Your 'processor' (FirstData, WellsFargo, whoever) will echo the Visa/MC terms in their contract with you, since they are in the processor's contract with Visa/MC.

It is not rocket science.

It's up to the private businesses how to run their sites.

Nobody is disputing that. However, the way you choose to run your site may result in revocation of processing capability. That is the risk you are taking, regardless of how many times you tell yourself otherwise.

All I am saying is that if a merchant decides to set an alternative price for a product due to the payment method like using cc or some other factor he won't have an issue

If you consider loss of payment card processing capability to be a non-issue, (and you do not do business in any of the 10 states where this is illegal) then this statement is true. Otherwise, if you set "alternative" pricing based on "payment method like using cc", you enter the lottery for having an "issue". Same goes for the myriad other terms that are laid out for merchants.

I won't even ask what your philosophy on PCI-DSS is.

[LifeinAsia]

Also most site owners do not have direct agreements with the cc companies but with intermediate payment processors.

If you process Visa cards, you have a de facto relationship with Visa. Period. YOU are the one charging the extra fee, not the processor. The processor is simply the conduit between you and Visa. I suggest you go back and re-read your processor's ToS- most likely it contains some language saying that you must comply with the ToS of any cards that you process.

If you offer cash-back on certain orders is no different than charging extra for a different set of options the customer selects.

It's completely different.

All I am saying is that if a merchant decides to set an alternative price for a product due to the payment method like using cc or some other factor he won't have an issue. That's the argument here. You say he will which I find very strange.

I (and others) are only repeating Visa's very public ToS. Have you even bothered to read the link posted previously? Please feel free to provide any link that you find to a statement where Visa has rescinded that policy or where the 10 states have terminated their applicable state laws. Or if you somehow negotiated a special exemption with Visa (and those 10 states), please feel free to alert us to that fact.

You can argue all you want and try to justify things however you want. But the basic fact is that what you are doing in violation of Visa's ToS and state law in 20% of the U.S., whether you chose to admit it or not.

Look, we have been trying very hard to HELP you. We have been trying to get you to understand that what you are doing is in violation of state law and Visa's policies (and have provided links to the pertinent documentation). If you choose to continue to run your business with these violations, that's your choice. It really doesn't matter to us. We are not the ones who will have to suffer the consequences.

[HRoth]

"If a credit card company decides to raise a red flag they are not going to ask you first. That's why they're also private businesses. They do whatever they want with their enterprise it's their right."

Well, no. First, they are publicly traded corporaitons, not private businesses. Second, no matter if they are private businesses, sole proprietors, LLCs, or publicly traded, they are subject to the laws of the state and the feds. We are not living in a libertarians-gone-wild world yet.

[enigma1]

Yes the difference between surcharge for card vs discount for cash is purely semantics as the math all adds up the same. But semantics is important. You can give me a discount for using cash but you can not charge me more than the stated price for using a card.

Ok then, that's fine if the discount vs surcharge is the key point to avoid complications I could go down that path if I have to. Just another loophole a bit more complex to implement.

...you do not do business in any of the 10 states where this is illegal

Not specifically but I do worldwide, that includes every state.

The processor is simply the conduit between you and Visa.

Not at all. Processors charge their own commission for transactions, usually higher than cc companies and have their own terms in place. As you know some of them go as far as forcing merchants to present specific processor checkout options before checking out (like in the shopping cart page) but that's another story. They may have their own account setup for customers and accept cc's at the same time. For example with a PP simple integration you cannot tell in advance how the customer is going to pay in which case the gateway commission is the key point.

I won't even ask what your philosophy on PCI-DSS is.

What about it? I was after security and privacy before the PCI was conceived. I don't think PCI is as secure as they want to believe.

[HRoth]

You're in the UK, which you give in your contact info on the website you list in your profile. Here's what Mastercard UK has to say about cc processors, whom you wrongly believe to be somehow exempt from Mastercard rules:

"The first thing you should know is that we require our member banks and other financial institutions that issue cards and acquire transactions to comply with MasterCard rules. Those members, in turn, must ensure that their processors and the merchants they acquire for also comply with MasterCard rules."

So your idea that processors and gatways and whatnot do not have to abide by the TOS of the credit card company is wrong.

Here's what Mastercard UK has to say about charging differently based on type of card. In short, they don't allow it:

"A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous
finance charge in connection with a Transaction. A Merchant may provide a
discount to its customers for cash payments. A Merchant is permitted to
charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly permitted in writing."

The only fee you can charge is one across the board for all transactions, not fees that vary by transaction.

What I don't get is why someone would go on a public forum using a profile that lists their business site and advocate breaking the TOS of the credit card companies as well as violate the law. To me, this is just nuts.

[enigma1]

A Merchant must not directly or indirectly require any Cardholder to pay a surcharge

In UK? You are mistaken, probably you have no idea what's going on. All sorts of merchants in UK have surcharges for cc's. And feel free to start the lawsuits, you have my sympathy. I have first hand experience, buy a car, rent a flat etc, there is a surcharge if you use a cc vs a check or bank transfer or cash.

What I don't get is why someone would go on a public forum using a profile that lists their business site and advocate breaking the TOS of the credit card companies as well as violate the law

Breaking what law? Feel free to call them "publicly traded corporations" to me they're are just private businesses. If you noticed having a contract between a merchant and a cc company does not restrict offering discounts instead of surcharges, where if it was federal there would been a legal issue regardless of semantics.

[rachel123]

I did not realize you were not in the states, quite a small detail left out of all the information you've posted, wouldn't you say?

According to Wikipedia the UK and Australia have 'banned' the no-surcharge clauses in card contracts, meaning that if you are indeed in the UK, you are in the clear.

However, all merchants outside of the UK and Australia (most notably, in the entire US) are subject to the Visa/MC TOS prohibiting surcharges for using cc.

IANAL, and therefore cannot speak to whether doing business in (ie selling worldwide) other jurisdictions may subject you to any liability.

[HRoth]

I quoted directly from the Mastercard UK website, from their TOS for UK merchants.

[enigma1]

I did not realize you were not in the states, quite a small detail left out of all the information you've posted, wouldn't you say?

I mentioned earlier this is for worldwide is not for the specific country you see on my profile of one site.

I quoted directly from the Mastercard UK website, from their TOS for UK merchants.

Yes, but that's a private business.

Basically I would like to see the government document or reference where this is defined as "illegal" as you mention in US in the specific states. Terms of a contract or agreement between private businesses is another matter.

[piatkow]

As I read the ToS quote given above you can, in the UK, charge a surcharge for using any credit card but not one specifically for using Mastercard.

[rachel123]

Basically I would like to see the government document or reference where this is defined as "illegal"

Here's one: California civil code section 1748.1. Google it.