4 BuildersOutlook 2024Issue11

Ray Adauto

Executive Vice President El Paso Association of Builders

Fees are everywhere . Today just going out to eat carries with it costs above and beyond the price of the food and tip . So I looked back on some of the charges eateries , bars , and hotels have charged me . It won ’ t surprise you that a few fees , like those for paying with credit card , are now a normal practice . I use a debit card almost exclusively for most of my transactions , not a credit card . I wondered why I am forced to pay a service fee when it is not a credit card . Here ’ s what I found about some “ hidden fees ” we all should know , and businesses won ’ t tell you .

Major card issuers , including Visa and Mastercard , expressly forbid surcharging debit card transactions . The legality of surcharges is further influenced by state laws . For example , Texas law specifically bans debit card surcharging altogether .

Q . What is a debit card ? A debit card is a payment card that allows cardholders to make transactions by drawing on funds they have deposited at a bank . It is linked to the cardholder ’ s bank account , and when a purchase is made , the money is immediately transferred from that account to the merchant ’ s account .

Q : Are debit card surcharges legal ? No , surcharging for debit card transactions is prohibited under the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act . This applies to all types of debit cards , including prepaid cards .

Q : How much are debit card processing fees ? The average interchange fee for debit card transactions is about 2.2 %. However , interchange fees can vary depending on the type of card , the card network , and the merchant ’ s category .

Q : How can merchants lower debit card processing fees ? While you can ’ t technically lower the fees set by card networks and banks ( i . e ., interchange and assessment fees ), there are steps you can take to offset the

costs of accepting debit cards . A common method is to implement cash discounts , where shoppers pay a lower price when they pay by cash .

Q : Why isn ’ t debit card surcharging legal ? The Durbin Amendment was enacted in 2010 to protect consumers from hidden fees . The amendment capped the interchange fees that merchants can charge for debit card transactions . As a result , merchants are not allowed to pass on these fees to consumers in the form of surcharges .

Even in our business we have tried to stay away from charging card fees . It is becoming difficult with all the fees associated with the cards . What we might see in the future depends on factors beyond our control , so never say never . We ’ ll follow the rules .

Source : https :// staxpayments . com / blog / ar e-debit-card-surcharges-legal /

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