Understand Your Visa and MasterCard Statements

Recently, Visa and MasterCard announced changes to the Small Ticket rate for regulated transactions that went into effect on October 1, 2011. Heartland Payment Systems has created a presentation on how changes to the Credit Card Small Ticket rate for regulated transactions will affect you. Click here to see the presentation.

Credit/Debit Card Reform Q&A

Effective dates
Q. When does the law take effect?
A. The new federal rules took effect July 22, the day after President Obama signed the financial reform bill into law. They allow merchants to set inimum amounts for credit card transactions (not to exceed $10 per transaction) and provide discounts to guests who pay by check, debit or credit card or cash.

Q: What happens next?
A: Over the next several months, the Federal Reserve will evaluate debit card interchange rates to determine whether they are reasonable and in proportion to the costs incurred by issuing banks with at least $10 billion in assets. Smaller banks are exempt. The Federal Reserve has until April 2011 to issue regulations that establish standards for those fees. The regulations will go into effect in July 2011.

Credit Card Minimums
Q: Can I now set a minimum level for credit card transactions?
A: Yes. As of July 22, card companies no longer can stop merchants from setting minimum credit card transaction levels. However, you can’t set minimum transaction level higher than $10, such as $15 or $25 for credit-card sales. And you can’t differentiate between bank issuers or card networks. For example, you can’t set a $10 minimum to use a Visa card but not require the same minimum for Discover transactions.

Q: Does the law allow merchants to set the $10 minimum on debit card purchases?
A: The credit-card transaction limit applies only to payments made by credit cards, not debit cards.

Q: Are merchants required to set credit-card minimums?
A: No. Restaurants and other merchants are not required to set a minimum payment for credit card use. Setting a minimum level is optional.

Payment Discounts
Q: What are the new rules on providing discounts for guests who pay by cash, check, debit or credit cards?
A: Starting July 22, merchants can offer customers discounts for payments made with cash, checks, debit/check cards or credit cards. Merchants must clearly disclose the practice and offer the discount to all customers. In the case of discounts for debit and credit card payments, you can’t differentiate between bank issuers or card networks.

Q: Are merchants required to provide discounts for guests who pay by cash, check or debit card?
A: No. It is optional for restaurants to provide a discount for a particular form of payment.

Q: Can guests request discounts if they use cash? If they do, must the restaurant provide the discount?
A: A customer can’t request discounts for cash payment unless the restaurant offers it to all customers.

Posting
Q: Are restaurants required to post their policies or minimum spend amounts and discounts?
A: Other than complying with existing laws on pricing displays, the new law doesn’t provide guidance on posting policies for discounts and minimum credit amounts.

Visit www.restaurant.org/cardreform for more information.