Financial services regulation fact of the day: starting this week merchants around the country are allowed to charge customers a "checkout fee" for using a credit card (even if many won't necessarily do so), as a result of a multi-billion dollar anti-trust settlement with Visa and Mastercard. But there won't be fees in New York State. [CNN] [NYT] [Consumerist]
No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means. Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.
What New York doesn't prohibit: offering customers a discount for using cash, as some gas stations do*. It also doesn't prohibit minimums for using a credit card, though retailers have to notify customers of the minimums. And the minimums -- typical upper limit is $10 -- have to apply to all types of credit cards. The allowance of minimums is relatively recent -- a 2010 federal law opened the way for them. [Consumerist]
The structure of the transaction fees that businesses pay credit card companies is... complicated, and there's an argument that it results in a "reverse Robin Hood" effect, with people who use credit cards -- especially rewards cards -- being subsidized by people not using the cards. [NYT]
* There's a bill in the legislature that would prohibit this price difference at gas stations -- but it would also allow the stations to pass along the credit card transaction fee to consumers. (It's aimed at cutting down on large gaps between credit and cash prices -- like a $1 gap in Long Island last year.) [Newsday]
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