While federal regulations give retailers the ability to offer pricing based on the type of payment a customer uses, financial institutions are trying to convince state legislatures to ban extra charges retailers place on credit card purchases.
Banks and payment networks are pressing state lawmakers to bar retailers from charging customers more to pay with credit cards than with debit cards or cash.
The laws’ supporters say they are trying to protect consumers from unfair costs when they make purchases with credit cards. Utah has already passed a law banning such surcharges, and New Jersey may follow suit. In all, about 20 state legislatures are weighing legislation related to payment cards, according to the American Bankers Association.
The moves at the state level highlight the ongoing battle between financial institutions and retailers over transaction costs. It remains to be seen whether the laws will pass, and if they do, whether they will hold up under lawsuits that could challenge them. The laws could limit retailers’ ability to manage their payments costs, but could lead to more retailers offering discounts for cash payments.
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