At present, merchants can pass along a charge equal to what they pay to accept the card, up to 4 percent. Credit card payment networks like Visa, Mastercard, American Express and Discover permit participating merchants to impose credit card surcharges, when allowed by law. Here are the average fees and costs for many issuers and payment networks in 2020. (1) A seller or lessor in a sales or lease transaction may not impose a surcharge on the buyer or lessee for electing to use a credit card in lieu of payment by cash, check, or similar means, if the seller or lessor accepts payment by credit card. Businesses are allowed to impose a surcharge on credit card purchases made on Visa and Mastercard, under a court settlement that took effect in January 2013. The Code of Conduct for the Credit and Debit Card Industry in Canada (the Code), which all payment card networks operating in Canada have adopted, sets out several rights that merchants have in relation to their contracts and their statements for payment card processing services. ; the issuer, which provides a payment card to a cardholder and usually maintains the cardholder's account. Pursuant to a settlement of the U.S. merchant class litigation, Mastercard modified certain rules and business practices to permit U.S. merchants to apply an extra checkout fee, also known as a surcharge, to customers who pay with Mastercard-branded credit cards. Merchant processing is a separate and distinct line of business from credit card issuing. Historically, card association merchant rules have contained anti-steering provisions and “no surcharge” provisions. Under American law, in credit card fraud cases, the credit card fraud victim holds little to no liability for the credit card fraud. ; the merchant, which provides the product or service for a price. The Players and The Process. Card associations charge participating merchants a fee for each consumer credit card transaction and the fee varies based on card association and credit card type. merchant or indirectly through agent banks or other third parties. Every payment card transaction involves: the cardholder, who uses a debit or credit card to pay for a product or service. Most merchants operate within credit card issuer rules and are aware of what can and cannot be done, though the maze of regulations can be confusing. Credit card surcharges are legal. No credit card issuer may, by contract or otherwise, prohibit a merchant from offering a discount to a customer to induce the customer to pay by cash, check, or similar means, rather than by use of a credit card or its underlying account, for the purchase of goods or services. For example, Cheryl Lavenhar, owner of Knit — a shop geared to all things knitting — in Roslyn, N.Y., warns, “It’s illegal to say you don’t take a card … Merchant services process payments made to the merchant and facilitate the payment of the merchant. A bank can be both an issuing bank and an acquiring bank, but banks most often specialize in one function or the other. In serving as the medium between the parties, fraud by the merchant services processing payment can cause significant damages to the merchant, … Credit card processing fees can add up to a big expense for merchants. , but banks most often specialize in one function or the other or the other a expense. 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