The ‘Swipe Fee’ Conundrum – A Must Read!
To charge, or not to charge? That is the question!
With the proposed settlement in the lawsuit against Visa Inc., MasterCard Inc., and bank credit-card issuers, business owners will be able to add checkout fees when their customers pay with a credit card.
The article I read this morning reports on the issue of whether business owners should charge the fee or not. To read the entire article, click here, but as a quick overview, here are the issues discussed:
Businesses who process credit-card transactions incur “swipe fees” for each transaction. The fee is between 1% and 3% of the purchase. This is money businesses must pay for each transaction. The settlement would allow owners to charge an additional 2.5% or 3% on each transaction.
The Biggest Con
One of the restrictions of the settlement requires that the business posts notices of the surcharges in the store and on customer receipts. Owners are afraid this will scare customers away. They do not want it to look like they are ‘adding in’ extra charges when they have already given customers a price or estimate. One interviewee, Steven Resnick, a partner at Resnick Amsterdam Leshner, said he would “definitely not impose a surcharge on clients because it would be like we’re nickel-and-diming them.”
The Biggest Pro
One of the biggest benefits owners will have with the settlement is the ability to negotiate fees with credit-card networks and banks. They can work to get the lower fees which in turn may allow them to not have to charge customers surcharges.
You can read this entire article, with all the pros and cons, here
. This settlement creates a big decision to be made by businesses, and there are pros and cons that go with it. The decision must be based on what is best for the individual company as a whole.