Merchants Maneuver as Visa Enforces Surcharge Program

Nearly two years after Visa began enforcing stricter rules on surcharges, merchants and payment processors are adjusting to the evolving landscape. The card network’s decision to lower the surcharge cap from 4% to 3% sparked significant changes, with many in the industry initially struggling to interpret Visa’s ambiguous communications. Today, however, industry players report a better grasp of the rules—but challenges remain.

James Shepherd, CEO of CCSalesPro, notes that the industry, especially independent sales organizations (ISOs), has largely adapted to Visa’s regulations. However, enforcement efforts have intensified, with Visa using mystery shoppers, warning notices, and fines to ensure compliance. Shepherd describes the current environment as a “truce” between Visa and the ISO segment, though not all stakeholders share this sentiment.

Micah Kinsler, president of MiCamp Solutions, believes Visa has ramped up enforcement. He reports that fines for violations are issued without warning and escalate quickly if not promptly addressed. Kinsler’s firm has experienced about one surcharge violation fine per month, reflecting Visa’s aggressive stance.

Small Businesses Face Compliance Hurdles

Large merchants often have dedicated teams to navigate Visa’s surcharge rules, but small businesses face greater challenges. Michael Seaman, CEO of Swipesum, highlights that many small merchants remain unaware of the updated rules. For example, some continue to offer cash discounts that effectively violate Visa’s policies. While fines are not yet widespread, Visa’s warnings signal its commitment to compliance.

Balancing Customer Experience

Visa’s CEO, Ryan McInerney, has emphasized that surcharges detract from customer satisfaction. Many merchants agree, opting instead to integrate surcharges into overall pricing to avoid alienating customers. Eric Cohen, CEO of Merchant Advocate, points to creative solutions, such as a restaurant increasing soda prices by 10 cents to cover processing fees without visibly penalizing credit card users.

Looking Ahead

As Visa’s enforcement efforts persist, merchants must navigate a delicate balance between compliance, customer experience, and cost management. For many, the shift away from surcharges reflects not only regulatory pressure but also a desire to maintain strong customer relationships. While fines and enforcement actions loom, the industry’s ingenuity continues to shape the future of payment practices.

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