An Overview of Recent Developments in Merchants’ Ability to Surcharge Credit Cards

I.        Introduction:

Merchants accepting credit cards face a dilemma—as much as six percent (6%) of the funds received when a customer pays with a credit card are applied to transaction fees, also known as “swipe fees” which are payable to a combination of the credit card company, various global, regional and local credit card processors, and financial institutions.  Until recently, merchants were barred by the merchant agreements governing the relationship between the major credit card companies and the average merchant from passing along such fees directly to their credit card-using customers.  Violation of such prohibitions could result in fees and/or the refusal of credit card companies to allow merchants to accept credit cards.

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