Visa 2019 Surcharging Compliance Guidelines

May 10, 2019 4:14 PM
By: Lorde Astor West

Credit Refund Requirements

In the US Region, US Territory: The Merchant must refund any US Credit Card Surcharge assessed on the Credit Transaction amount. For partial refunds, the US Credit Card Surcharge amount must be pro-rated.

 

Surcharge

A Merchant must not add any amount over the advertised or normal price to a Transaction, unless applicable laws or regulations expressly require that a Merchant be permitted to impose a surcharge. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.

 

In the US Region and US Territories: This does not apply to Visa Credit Card Transactions, as specified in Section 5.6.1.5, US Credit Card Surcharge Requirements – US Region and US Territories

 

Notification of Intent to Assess Surcharges – US Region and US Territories

In the US Region or a US Territory: An Acquirer must both:
  • Ensure that its Merchant notifies Visa and its Acquirer in writing at least 30 calendar days before assessing a US Credit Card Surcharge.
  • Notice to Visa can be provided as specified on the “Merchant Surcharge Notification” link at www.visa.com.
  •  Inform Visa upon request of all notifications of intent to surcharge received from its Merchants.

 

Similar Treatment of Visa Transactions

A Merchant must not assess a US Credit Card Surcharge on Visa Credit Card Transactions in a specific payment channel if either:

 

The Merchant is prohibited or effectively prohibited by a Competitive Credit Card Brand from assessing surcharges on the Competitive Credit Card Brand’s products in that payment channel.

The Merchant’s ability to surcharge a Competitive Credit Card Brand in that payment channel is limited by that Competitive Credit Card Brand in any manner 1 and the Merchant assesses a US Credit Card Surcharge on conditions that are not the same as the conditions on which the Merchant would be allowed to surcharge transactions of the Competitive Credit Card Brand in that payment channel, or on which the Merchant actually surcharges transactions of the Competitive Credit Card Brand in that payment channel, after accounting for any discounts or rebates offered at the Point-of-Transaction.

 
This prohibition does not apply and a Merchant may assess a US Credit Card Surcharge on Visa Credit Card Transactions if one of the following:
  • The Competitive Credit Card Cost of Acceptance or the Competitive Credit Card Product Cost of Acceptance to the Merchant is less than the Visa Credit Card Cost of Acceptance or Visa Credit Card Product Cost of Acceptance to the Merchant and the Competitive Credit Card Brand does not prohibit or effectively prohibit surcharging credit card transactions.
  • The Competitive Credit Card Brand prohibits or effectively prohibits surcharging on credit cards and the Merchant actually surcharges the Competitive Credit Card Brand’s transactions in an amount at least equal to the lesser of either:
  • The Competitive Credit Card Cost of Acceptance
  • The amount of the US Credit Card Surcharge imposed on a Visa Credit Card
  • There is an agreement between the Merchant and the Competitive Credit Card Brand in which the Merchant waives or in any other way restrains or limits its ability to surcharge transactions on that Competitive Credit Card Brand, provided that:
  • The agreement is for a fixed duration, is not subject to an “evergreen clause” (i.e., automatically renewed unless terminated by the parties to the agreement) and is not a standard agreement generally offered by the Competitive Credit Card Brand to multiple merchants.
  •  The Merchant’s acceptance of the Competitive Credit Card Brand as payment for goods or services is unrelated to and not conditional upon the Merchant’s entry into such agreement.
  •  The agreement is supported by the exchange of material value.
  •  The agreement expressly specifies a price under which the Merchant may accept the Competitive Credit Card Brand’s products and surcharge those transactions up to the Merchant’s Merchant Discount Rate for the Competitive Credit Card Brand, after accounting for any discounts or rebates offered by the Merchant at the Point-of-Transaction.

 

1 This provision does not apply if the Competitive Credit Card Brand prohibits only surcharging for an amount greater than the Competitive Credit Card Cost of Acceptance. In the US Region or a US Territory: A Merchant may assess a fixed or variable US Credit Card Surcharge on a Visa Credit Card Transaction, subject to applicable laws or regulations.

 
The Merchant may assess a US Credit Card Surcharge by either:
  •  Applying the same fixed or variable US Credit Card Surcharge to all Visa Credit Card Transactions (brand level)
  •  Applying the same fixed or variable US Credit Card Surcharge to all Visa Transactions of the same credit product type (product level)
  •  The US Credit Card Surcharge at the brand level must be the same for all Visa Credit Card Transactions, regardless of the Card’s Issuer or the product type, and after accounting for any discounts or rebates offered by the Merchant on Visa Credit Card Transactions at the Point-of Transaction.
  • The US Credit Card Surcharge at the product level must be the same for Transactions on a particular Visa Credit Card product type, regardless of the Card’s Issuer, and after accounting for any discounts or rebates offered by the Merchant on Visa Credit Card Transactions on the product type at the Point-of-Transaction.
  • A Merchant must not assess a US Credit Card Surcharge on Visa Credit Card Transactions at both the brand and product level.
  • The US Credit Card Surcharge must be included in the Transaction amount.

 

In the US Region or a US Territory: A US Credit Card Surcharge assessed at the brand level, as specified in Section 5.6.1.5, US Credit Card Surcharge Requirements – US Region and US Territories, must not exceed the Merchant’s Visa Surcharge Cap.

 

In the US Region or a US Territory: A US Credit Card Surcharge assessed at the product level, as specified in Section 5.6.1.5, US Credit Card Surcharge Requirements – US Region and US Territories, must not exceed the Merchant’s Visa Credit Card Surcharge Cap less the Debit Card Cost of Acceptance.

In no case may the US Credit Card Surcharge amount exceed the Maximum Surcharge Cap

US Credit Card Surcharge Disclosure Requirements – US Region and US Territories

In the US Region or a US Territory: A Merchant must, at both the point of entry into the Merchant Outlet and the Point-of-Transaction, clearly and prominently disclose any US Credit Card Surcharge that will be assessed.

 
The disclosure at the Point-of-Transaction must include all of the following:
  • The exact amount or percentage of the US Credit Card Surcharge
  • A statement that the US Credit Card Surcharge is being assessed by the Merchant and is only applicable to credit Transactions
  •  A statement that the US Credit Card Surcharge amount is not greater than the applicable
  • Merchant Discount Rate for Visa Credit Card Transactions at the Merchant
 
Merchants with Acceptance Devices that offer Cardholder choice for debit Transactions in the form of “credit” and “debit” buttons must ensure that:
  • Visa debit Card Transactions are not assessed a US Credit Card Surcharge
  •  It is made clear to the Cardholder that surcharges are not permitted on debit Transactions regardless whether a Cardholder selects the “credit” or “debit” button
  • For an Electronic Commerce Transaction, a Mail/Phone Order Transaction, and an Unattended Transaction, the Cardholder must be provided the opportunity to cancel the Transaction subsequent to the US Credit Card Surcharge disclosure
  • Surcharging is not allowed on transactions where also a convenience fee, service fee, or cash discount has been assessed.

 

For example, the requirement for clear and prominent disclosure will be satisfied if the disclosure is made consistent with Table 5-5, Surcharge Disclosure – US Region and US Territories:

Requirements for Prepayments and Transactions Using Stored Credentials

Disclosure to Cardholder and Cardholder Consent:

In addition, before processing an Installment Transaction, Recurring Transaction, or Unscheduled Credential-on-File Transaction, the Merchant or its agent must obtain the Cardholder’s express informed consent1 to an agreement that contains the following:

  • Where surcharging is permitted, acknowledgement of any surcharge assessed and the associated disclosures.
 

Visa Easy Payment Service (VEPS) Transaction Qualifying Criteria

A Visa Easy Payment Service (VEPS) Transaction must meet all of the following requirements:

  • The Transaction amount (including taxes, if applicable, and surcharge, if permitted) must not exceed the limit specified in Section X.
 

Required Transaction Receipt Content for Specific Transaction Types

In addition to the requirements in Section 5.10.3.2,

Required Transaction Receipt Content for All Transactions, and Section 5.4.2.4, Disclosure to Cardholders of Return, Refund, and Cancellation Policies, a Transaction Receipt must contain all of the following, as applicable:

 

 

 

 

Dispute and Dispute Response Amount General Requirements

If the Dispute is for a partial amount, any surcharge amount must be pro-rated.

 

Compliance Filing Conditions

Unless otherwise specified, a Member may file for Compliance if all of the following occur:

  • A violation of the Visa Rules occurred that is not related to an Account Data Compromise Event.
  • The Member has no Dispute, Dispute Response, or pre-Arbitration right.
  • The Member incurred or will incur a financial loss as a direct result of the violation.1
  • The Member would not have incurred the financial loss had the violation not occurred.1
  • The Member made a pre-Compliance attempt to resolve the dispute with the opposing Member and the opposing Member does not accept financial liability.
 
The pre-Compliance attempt must include all of the following:
  • Planned Compliance filing date
  • All pertinent documentation
  • Specific violation of the Visa Rules

 

1 This does not apply to a US Credit Card Surcharge violation, as specified in Section 11.12.4, Compliance Right for Improperly Assessed Surcharge – US Region and US Territories

 

Compliance Right for Improperly Assessed Surcharge – US Region and US Territories

A Member may file for Compliance if a Merchant in the US Region or in a US Territory assessed a US Credit Card Surcharge under one of the following conditions:
  •  US Credit Card Surcharge amount exceeds the applicable US Credit Card Surcharge amount as specified in the Visa Rules
  • US Credit Card Surcharge was assessed on a Transaction in a manner that does not comply with the Visa Rules
  • US Credit Card Surcharge was assessed on a Transaction type where surcharging is not permitted
  • US Credit Card Surcharge was assessed by a third party
  • US Credit Card Surcharge was not disclosed as specified in the Visa Rules
  • US Credit Card Surcharge amount did not appear on the Transaction Receipt as specified in the Visa Rules
  • US Credit Card Surcharge amount was not refunded as specified in the Visa Rules
  • For a Dynamic Currency Conversion Transaction, US Credit Card Surcharge amount was not included in the conversion
  • Convenience Fee, Service Fee, currency conversion fee, commission, or Wire Transfer Money Order service fee was applied on a Transaction that included a US Credit Card Surcharge
  • The Member must only request Compliance for the US Credit Card Surcharge amount.

 

The Member is not required to have incurred a financial loss as a direct result of the violation. If the Issuer has billed the Transaction that included the US Credit Card Surcharge to the Cardholder, the Issuer must credit the Cardholder for the US Credit Card Surcharge amount. A Member must not file for Compliance if the Merchant properly assessed a US Credit Card Surcharge as permitted in the Visa Rules.

 

Lorde Astor West

 SCRATCH | Founder & CEO

Astor is a pioneer of the modern Web and Arizona native. Since 2003 she has been helping businesses keep what they earn by developing technologies that streamline and automate complex processes.  Astor has created an eclectic portfolio of innovative brands that include Cloud, FinTech, Data, Media, and E-commerce. To date Astor has developed a cloud rapid development framework, several platforms, and countless cloud Apps.  Astor is a mother, grandmother, and wife who loves building innovative technologies that help businesses keep what they earn, walking her rescues and promoting local businesses. 

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