Visa’s Updated Rules Regarding Discounts for Cash, Surcharges, and Convenience Fees

Every month merchants pay hefty Credit card processing fees which are actually deducted from the merchants daily sales batches. In fact, all merchants loose thousands of dollars in revenue every month or year due to credit card processing fees… Have you ever asked yourself if you could incentivize your customer with a discount for cash payments ? Or perhaps if you could legally add a surcharge on top of your sale price if the customer paid with a credit card ?

Well, the time has finally come, when Visa’s rules have changed in favor of the merchants at last….. Visa has updated their Visa Core Rules and Visa Product and Service Rules, and the rules changed benefit all business owners in all 50 states ! …Now, you can offer a discount when your customer pays with cash in efforts to incentivize your customers and avoid having to pay credit card processing fees. (Therefore if you sell a product or service for $100, you get to finally keep all $100 of the sale….Not $96.00 ) This can now be done by simply applying an automatic “Service Fee” to all sales transactions with compliant EMV terminals and then discounting the “Service Fee” only when your customers pay you with cash (or in-store gift card). You may not, however, add a surcharge manually or directly to your customers bill if they pay you with a credit card.



Below are excerpts from Visas rules that explain how to do it properly.


New Regulations Discount Offer – US Region and US Territories

In the US Region and a US Territory, a Merchant may request or encourage a Cardholder to use a means of payment other than a Visa Card or a Visa Card of a different product type (e.g., Visa Classic Card, Visa Traditional Rewards Card, Visa Signature Card) than the Visa Card the consumer initially presents. Except where prohibited by applicable laws or regulations, the Merchant may do so by methods that include, but are not limited to:

Offering the consumer an immediate discount from the Merchant’s list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the consumer uses a particular general purpose payment card with an acceptance brand other than a Visa Card or other particular means of payment

What this means to merchants: By using proper signage (supplied by us) as stated in US Credit Card Surcharge Disclosure Requirements – US Region and US Territories, merchants can legally offer a discount for cash, so your customers end up paying the actual processing fees for that card transaction. Convenience Fees – AP, CEMEA, and US Regions

In the AP Region, CEMEA Region (Russia), and US Region, a Merchant that charges a Convenience Fee must ensure that the fee is assessed as follows:

Applicable to all forms of payment accepted in the payment channel

What this means to merchants : Aside from following some other guidelines, merchants can now choose to add a convenience/service fee to a customers’ transaction (as long as it is added to every single transaction). Merchants may then immediately offer a discount for the same amount as the “Service Fee” if they customer paid with cash. Surcharges

A Merchant must not add any amount over the advertised or normal price to a Transaction, unless applicable laws or regulations expressly require that a Merchant be permitted to impose a surcharge.

What this means for merchants:  Even though surcharges may not be added to credit card transactions in all 50 states, a convenience fee or service charge fee can still be passed on to a customer that prefers to pay with a credit card, just as long as you offer a discount for cash payment as a second option. To make this all possible, merchants must use compliant terminals that add an automatic service charge fee to every transaction, and then apply a discount to customers that pay with cash with an equal amount of the service charge fee.



The rules have changed and therefore it is a historic victory for merchants who have fought for this time to come. Luckily, these new regulations allow merchants to update their merchant accounts and start saving the thousands of dollars they once lost due to processing fees.


Review all the solutions that Paymentix offers and contact us so a local merchant service representative can help you eliminate processing fees for ever..