Information on Merchant Accounts,
Ecommerce and Credit Card Processing

August 24th, 2005 by Jamie Estep

Credit Card Processing No No’s

Filed in: Merchant Accounts | 4 comments

This weekend, I was shopping at a business here in Austin, TX and I noticed that the there was a minimum purchase to be able to pay with a credit card. I politely informed the business owner that this was a prohibited practice and I was rudely returned with a “if they’re going to charge me for taking a credit card, then I’m going to chose the ones and how I am going to take them”.

While this may not seem unusual to some, it is clearly against Visa and MasterCard regulations. Many businesses may not know that this is illegal, and others may just not care. Either way this post is a review of a few common practices that some merchants partake in, and they shouldn’t.

Pass The Buck / Service Charge:
This is charging a service or convenience charge for using a credit card.

Not Enough:
This is requiring a minimum purchase to be able to pay with a credit card.

Card Accepting Regulations

It is very clearly written in Visa and MasterCard policies that these are unacceptable practices. If someone who wants to take the time to report a business does, the businesses can be shut down, and they may be placed on a Terminated Merchant File. This would prohibit them from processing with any processing bank in the US. They could go to an offshore bank with a processing rate of 5 – 10%, and a $1.00 or more transaction fee. To me its not worth the risk financially, and I consider it a bad business practice to impose fees or minimums to accept credit cards. If you’re going to take credit cards, you need to follow the rules that you agreed to when you signed up.

My other advice is if you do chose not to follow them, don’t be rude to someone who asks about it.

4 Responses to “Credit Card Processing No No’s”

  1. Jamie January 17, 2007 at 10:15 am

    I dont agree with the credit card policy. Companies should be allowed to put into place a minimum as they see fit. Companies have to pay a percentage per transaction why should they have to accept, lets say a 59 cent credit card charge. The time effort and cost for said transaction would be a complete waste of time. For those who disagree should siply not shop there or as crazy as this sounds CARRY CASH!

  2. Jim April 12, 2007 at 9:30 am

    As a risk analyst in the bankcard industry for over 10 years, I have heard all sorts of explanations form merchants that imposed a surcharge and were not pleased with the consequences. Like it or not, that is a strictly enforced regulation and if a cardholder calls their bank to complain about a merchant with a surcharge, that business can expect to be fined or worse.

  3. Barr July 17, 2007 at 1:19 pm

    The State of Texas has been for the last 5 years adding a 1% or $1 (depending which is higher) convience fee from Reg your vech, boat, MC, for Lic plate and lic renewal and as of 2 years ago property taxes can be paid by CC with the added convience fee.

    Are you suggesting that MC/ Visa is going to shut down the state of Texas

  4. jestep July 17, 2007 at 1:59 pm

    No. State and Federal governments are allowed to charge a service fee for using a credit card.

    Here’s another article briefly explaining it: