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Paying With a Credit Card? That’s Going to Cost You.

The Wall Street Journal

It is getting more expensive to pay for things with a credit card.

More small businesses—and even some larger ones—are charging shoppers a fee for credit-card purchases or offering them discounts when they pay with debit cards, cash or checks. The moves are meant to offset the various fees businesses pay on credit-card transactions, costs that have grown alongside generous cash-back and travel rewards.

Data on cash discounting is hard to come by, and less than 5% of 8 million card-accepting small businesses in the U.S. charge fees for credit-card payments, according to estimates from payments consultancy the Strawhecker Group. But that share has risen steadily in recent years. Five years ago, an estimated 2% or less of businesses charged fees on credit-card purchases.

The coronavirus accelerated the shift, sending businesses in search of revenue to make up for sales lost in the pandemic’s early months. CardX LLC said more than 6,400 merchants—most of them online businesses—use its surcharge-calculating software, up from 4,030 a year ago and 2,380 in 2019.

“More merchants have turned toward making those costs transparent to the consumer,” said John Drechny, chief executive of the Merchant Advisory Group, which represents U.S. merchants on payments issues.


Learn more about surcharging with TSG’s eReport: How to Navigate the World of Surcharging

This eReport provides an overview of credit card surcharging and the related practices. The following topics are covered for the U.S. market:

  • What is a surcharge and how does it work?
  • Surcharging rules
  • What is a cash discount and how does it work?
  • Surcharge vs. cash discount
  • What are convenience and service fees?
  • What do all these mean for payment providers?