Merchants now face potential fines up to $1 million for non-compliance with Visa's surcharge rules. 1 This shift signals a significant development in the ongoing battle over interchange fees, setting the stage for a dynamic credit card processing industry landscape. In this article, we will delve into the intricacies of surcharge programs and explore the recent heightened enforcement by Visa.
DOWNLOAD THE NAVIGATING THE LANDSCAPE INFOGRAPHIC HERE
Visa's Enforcement Initiatives
Visa, the leading U.S. credit card network, is heightening efforts to enforce regulations on surcharge programs. A memo from Priority Technology Holdings' payments processor, issued on December 21, highlighted the increased scrutiny, emphasizing the potential financial consequences for merchants failing to adhere to Visa's rules. The memo underscored the importance of compliance with industry standards. 2
Industry Dynamics and Interchange Fees
The surge in Visa's enforcement aligns with the ongoing battle over interchange fees, also known as swipe fees. Merchants, seeking to recover the costs associated with these fees, often resort to surcharges on credit card transactions. While Visa's CEO, Ryan McInerney, expressed dissatisfaction with such practices, he acknowledged that merchants can implement surcharges within the bounds of Visa's regulations.
Legislative Landscape and Merchant Challenges
The conflict extends beyond corporate realms, manifesting in legislative efforts both nationally and at the state level. The Credit Card Competition Act, a bipartisan initiative in Congress, aims to provide merchants with alternatives to Visa and Mastercard. 3 Meanwhile, states like New Jersey and New York have implemented laws to restrain surcharges, limiting them to the actual processing costs incurred by merchants. 4
Litigation and Industry Response
The struggle between merchants and card networks is not confined to legislative arenas; legal battles persist. A recent lawsuit by MiCamp Solutions against Visa alleges attempts to obscure interchange fees and hinder ISOs from presenting programs, seeking class-action status. As the industry grapples with billions in litigation, Alpharetta, Georgia-based Priority Technology Holdings has 820,000 active customers in small, mid-sized, and large customers across various payment channels and processes about $118 billion annually, 5 emphasizing the need for compliance in the face of heightened fines.
As the industry evolves, embracing innovative solutions becomes essential. TouchSuite® stands at the forefront, offering a bridge between merchants and the intricate world of credit card processing regulations. In the quest for seamless compliance and operational excellence, TouchSuite® emerges as a strategic choice for businesses navigating the challenges posed by Visa's stringent measures on surcharge programs.
FOOTNOTES:
- "Visa rattles ISOs with surcharge plan", Payments Dive, April 12, 2023. Payments Dive
- "Visa cracks down on surcharge programs", Payments Dive, July 26, 2023. Payments Dive
- "4 things to know about the Credit Card Competition Act" Meghan Keivel Cruz , September 14, 2023. National Retail Federation
- "New Jersey Acts to Limit Credit Card Surcharges", Bob Jaworski, August 30, 2023. Holland & Knight.
- "Priority Announces Strategic Technology Partnership with Treasure Financial", BusinessWire, December 11, 2023. Businesswire
Author
Writing for Touchsuite, Jonathan Bomser, is a technology and marketing expert with over 30 years of industry experience. He is a businessman, writer, artist and musician. He has vast knowledge of finance, business and technology. Jonathan is currently founding, investing and board advising in several early stage and start up companies. Jonathan has been involved in Technology, Media, Marketing and Advertising for a multitude of Fortune 500 companies for over 30 years.He has served as a strategic, creative and marketing executive and consultant for both parent companies and subsidiaries at AOL, The National Football League, The Walt Disney Company, NBC, MTV, Viacom, Time Warner, USA Today, Alliance Entertainment, WPP, Penguin USA, along with numerous other established companies, start-up ventures and reorganizations.Jonathan was the CEO and Founder of BigLinker.com, which was acquired by Ziff Davis (Nasdaq: ZD) in 2021, CEO and Founder of TownTarget.com from 2013-2015 which was acquired by Touchsuite/American Bancard in 2015 and previously Bomser Payan Interactive Agency from 2008-2012 which was acquired by Big Step Interactive/Digital Marketing Associates. Jonathan was the key developer for the technology used to power many of their successful digital campaigns. Clients included national brands such as Adidas, PNC Bank, Massage Envy, European Wax Center and others.Jonathan has also helped manage the technology initiatives, creative strategies and business development for AIM Pages.com, AOL’s Social Network. Since May 2006, Jonathan has also been consulting for technology, marketing, sales and creative strategies for Veoh.com, BigString.com, Vuguru.com and others. Before consulting for these major companies, Jonathan was a principal in En Pea Productions,Inc. which was a television production company focused on reality television, commercials and music videos. Jonathan is also the former Board Member, CEO and President of WoozyFly.Inc. Trading on under the symbol WZFY.Jonathan's current projects at AccountSend.com, VocalChimp.com and CoolValidator.com
Touchsuite is located in Boca Raton, FL and is a payment processing and point of sale company that specializes in merchant accounts, point of sale systems, Grubbrr self-ordering kiosks.
Recent Posts
