Despite the recent spate of states introducing legislation to stop retailers from surcharging credit card transactions, executives from both a major card brand and major retail organization agreed that such surcharging is highly unlikely in the near term – and without legislation.
Speaking on background, one card executive acknowledged that few retailers in the near term were likely to launch a formal effort to surcharge card transactions, but recounted the experience consumers had in Australia where, the executive maintained, card surcharging came in slowly at first but eventually took off to become quite widespread.
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First a few retailers might try it, the executive suggested, just like in Australia and then more take it up. These state laws would prevent that.
Australia undertook government mandated changes to its payments market that allowed retailers to surcharge card transactions in 2003.
But Mallory Duncan, general counsel to the National Retail Federation, disregarded the idea, contending instead that the circumstances around the surcharging question in each nation had been very different. Retailers in both nations had rules against surcharging card transactions in place, but in Australia the rules were simply eliminated to allow retailers to surcharge or not as they chose, Duncan explained, while in the U.S. the no-surcharging rule was not so much eliminated as re-written.
The additional requirements of notifications, both to the card brands and to the public about any surcharging effectively make the practice far too cumbersome to be practical, he contended.
"Even the few members we have had who have said they might be interested have come back to us after looking into it and reported they found it was just not worth it," he said, adding that the even the fact that individual states could act to prevent surcharging indicated that the practice faced significantly more hurdles in the U.S. than in Australia.
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