When a person uses a credit card to make a purchase, he is essentially borrowing money from a financial institution. Sometimes, merchants will attempt to charge individuals a convenience fee for using a credit card. Although legal, according to the Merchants Council, MasterCard does not allow merchants to charge consumers a convenience fee for using a MasterCard, but Visa does.
Convenience Fees
When a consumer wishes to use a credit card, he may be charged a convenience fee by the merchant for the service. As merchants are charged by credit card companies per transaction, this fee may go some way to helping them offset incurred costs.
Visa Rules
Visa allows merchants to charge consumers a fee for the use of a credit card under certain conditions. The fee can only be assessed on purchases that are made face to face, and must be fully disclosed to customers before they make their purchase. In addition, the customer must be given the chance to cancel the transaction before accepting the fee. In addition, the amount of the fee must be fixed.
MasterCard Rules
MasterCard, by contrast, does not allow merchants to charge a fee for the use of a credit card. While a merchant can charge a surcharge for various reasons, it cannot charge consumers for the use of a credit card in lieu of another form of payment. This applies not just to MasterCard, but to all credit cards. So, a merchant that accepts MasterCard cannot charge a surcharge for accepting Visa.
Considerations
Whether a merchant can or cannot charge a convenience fee for the use of a credit card is guided entirely by the agreements that the merchant signs with the credit card companies. However, theoretically, a government, such as a city or state, could pass a law that forbids the charging of convenience fees within its jurisdiction. However, few of these laws have been passed.
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