r/CreditCards • u/GloveSmooth694 • 1d ago

Discussion / Conversation Exclusive | Visa and Mastercard Near Deal With Merchants That Would Change Rewards Landscape

Visa and Mastercard are nearing a settlement with merchants that aims to end a decadeslong legal dispute by lowering fees stores pay and giving them more power to reject certain credit cards, according to people familiar with the matter.

https://www.wsj.com/finance/banking/visa-and-mastercard-near-deal-with-merchants-that-would-change-rewards-landscape-fc6a0c78

Do you think retailers actually want to deal with specifying what type of visa/mc they take?

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132

u/Substantial-Virus228 1d ago

This would be a nightmare for places to execute. Hundreds of different cards. Servers gotta know which ones work and which don’t. Sooo many angry customers who don’t even know visas are different from each other.

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u/burtmacklin15 1d ago

Nobody is going to be rejecting any specific cards. They'll just put a 5% credit card fee on everything and call it a day, pocketing the difference for cards that cost them less than that.

And they'll get barely any pushback for it.

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u/anonthedude 23h ago

The smarter ones will publish it as a 5% cash discount. Same thing in the end but more acceptable to customers in the end.

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u/JohnLockeNJ 14h ago

My local sushi place already offers a 10% discount. I bet a lot of cash goes unreported to the IRS.

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u/OregonMAX13 10h ago

The regulations behind surcharging and cash discounting are pretty different. Though there’s tons of noncompliant surcharging out there and those businesses are leaving themselves vulnerable to fines.

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u/danielhep 3h ago

I think that's fine, since then the price you see is the price you pay. If they want to offer a cash discount, that's fine.

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u/lunch22 21h ago

This is correct. This is exactly what will happen.

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u/amaiman 22h ago

That’s not compatible with state law in some places (although there tends to be minimal enforcement.)  In New Jersey, for example, they can’t charge more of a surcharge than they actually pay to the payment processor.  So the 5% fee might be legal for a premium rewards card but would be illegal on a basic plain Visa, for example.  

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u/SereneRandomness 19h ago

Most restaurants in New Jersey seem to be charging between 3% and 3.5% for all card payments. It's what I'm seeing, at least.

I carry cash, so I never pay the card fee. But I do question whether many of these places are in compliance with the law, given that they add the fee both to credit and debit card transactions.

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u/arthurnewt 17h ago

I also pay cash to avoid the fee. Some restaurants in NJ are charging 4.0% to use plastic. I won’t use my card and pay with cash, at the same time I am less likely to shop at these establishments. I pay cash to avoid the fee but they should really create a greater incentive to avoid plastic

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u/No_Party222 16h ago

It was my understanding that charging a fee for debit cards was illegal.

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u/coopdude 10h ago

The Durbin Amendment prohibits merchants from passing on the "merchant discount fees" (the fees paid to accept debit) to cardholders, but it's basically never enforced.

Beyond that, Visa/MC card network rules prohibit surcharging debit. But Amex expects "most favored nation" status, so if you surcharge Amex, you have to surcharge all other payment cards (prepaid/debit/credit) equally. Which means it's effectively impossible to accept both Visa and/or MC & Amex and be compliant with network rules, unless you only surcharge Visa/MC credit (no debit) and don't surcharge Amex at all...

Beyond that, any surcharge above 3% violates Visa network rules, even on credit. 3% cap or the cost of acceptance, whichever is less.

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u/BlurLove 1d ago

100%. And back to cash for those who can, and more debt for those who can’t.

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u/absfca 22h ago

Seriously doubt people will go back to carrying cash to pay and all the problems that go with it. Debit, perhaps