Two More States Mulling Bans on Credit Card Surcharges
Missouri and Utah are the latest states to consider barring merchants from imposing surcharges on customers who use credit cards.
Bills filed late this week by lawmakers in those two states mean that nine states are now mulling laws that would ban the surcharges. That is in addition to 10 states that already have bans on the books.
The surge of legislation comes in response to new rules that allow surcharging on Visa and MasterCard transactions. The rules, which took effect Jan. 27, are part of a proposed settlement that the two networks and card-issuing banks reached last year with suing merchants.
Visa (NYSE:V) and MasterCard (MA) had previously barred retailers from imposing the surcharges. The new rules have sparked fears that credit card users could be assessed fees of as much as 4% at the cash register, though such fees have yet to materialize, at least on a widespread basis.
The other states that are now considering bans are Illinois, Hawaii, New Jersey, Pennsylvania, Rhode Island, Vermont and West Virginia. In New Jersey, a legislative committee endorsed the measure Thursday.
Bans on the fees are already in effect in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
The state-level proposals are drawing opposition from retail trade groups. Many merchants hope that the threat of a surcharge will give them leverage in negotiations with Visa and MasterCard over swipe fees, even if they never actually levy the surcharge.