This week retailers were granted one of the biggest wins in credit card history: the ability to add a surcharge to customers' purchases when the payer used a credit card to make a payment.
In a landmark settlement between the credit card processors and merchants, retailers now have the ability to charge a fee to process credit cards equal to up to 4% of a customers purchase.
This means that you could soon pay $.80 for a $20 swipe, or $4 for a $100 purchase made with a credit card to help defray the expense of processing a credit card.
Retailers have the ultimate power to pay the swipe fees out of their own pocket or charge customers a swipe fee to cover their own expenses. The two largest retailers in the United States, Walmart and Target, have both said that they do not intend to pass on swipe fees to their customers. Instead, shoppers who pay with a credit card will get the same pricing as customers who pay with a debit card or cash.
So far, no major retailers have taken a stand on new credit card surcharges. The industry doesn't want to alienate customers who are accustomed to using credit cards, but it isn't particularly excited about paying swipe fees, either. It's most likely that small retailers and online merchants will be the first to initiate swipe fees or cash discounts, a maneuver that would have previously violated their agreement with Visa or MasterCard but is legal under the terms of the settlement.