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issuers to benefit and squeeze out any margin for the ISOs,"
Insider’sreport he wrote.
on payments Visa's disdain for dual pricing

Differential pricing, while theoretically possible for
decades, has taken off only in recent years. As gas stations
and government agencies learned long ago, this pricing
Holding Visa strategy responds to a major pain point for businesses that
accept cards: the rising cost of acceptance.
to account Visa has never hidden its disdain for credit card surcharging,

or for merchants offering discounts to customers who pay
By Patti Murphy with cash or other less expensive methods. But businesses
and ISOs have the law on their side.
ProScribes Ink
Forty-eight of the 50 states expressly permit credit card
redit card interchange rates in the United States surcharging, and the Durbin Amendment specifically
are too high and too complex. Don't take my allows businesses to induce customers to use specific
word for it; just compare the multi-page set of payment methods, for example, by offering discounts for
C U.S. rates to interchange elsewhere. Australia cash payments.
has only two rates: 0.88 percent for business-to-business
payments; 0.21 percent for standard retail payments. In July 2023, Visa lowered the cap on permissible credit
card surcharging from 4 percent to 3 percent, which is
The European Union capped consumer credit card lower than permissible surcharges in some states and can
interchange at 0.30 percent. Averaged out, interchange on be lower than the all-in cost of processing, according to
U.S. consumer transactions is about 1.7 percent, nearly six MiCamp.
times the rate paid in Europe. Only merchants in South
Africa (average 1.48 percent) and Canada (1.4 percent) come Visa has also gone after merchants, dispatching "secret
close to paying the rates U.S. merchants pay. shoppers" to identify those that might be running afoul
of rules it has established around cash discounting, such
I'm not suggesting interchange should be regulated. We've as specific signage and the way prices are displayed on
seen how that plays out. Thank you, Senator Richard shelves or menus. Violators are subject to what can be hefty
Durbin, D-Ill. But the free-market approach to interchange fines.
isn't working in the United States, because the heavy hand
of one dominant player (Visa) skews the market dynamic. MiCamp said one of its customers got caught in one such
sting, resulting in the ISO having to shell out $70,000 in
A proposed class-action lawsuit filed by ISO MiCamp fines. MiCamp noted that other ISOs have had similar
Solutions in December 2023 in the U.S. District Court experiences "While the ISO has the option to pass the
for the Northern District of California illustrates this. It penalties that Visa assesses onto the merchant, it would
alleges Visa forces unnecessary roadblocks on ISOs selling likely put many merchants out of business to pay a huge
and merchants adopting alternative pricing schemes like fine," MiCamp stated in its court filing.
surcharging and cash discounting.
"Visa's use of paid employees, or as Visa has coined them,
Visa isn't the only card network available to merchants. 'secret shoppers,' to audit merchants and enforce its
But it is the most popular. As such, it sets rules the others surcharge rules is akin to utilizing privately paid police
tend to embrace. Although not always. As MiCamp noted officers to effectuate its goal of continuing to assess quasi-
in its lawsuit, leading "competitors," namely American criminal penalties on ISOs," MiCamp asserted.
Express, Discover and Mastercard, do not have or do not
enforce "policies as stringent as Visa's cash discounting and The big issue, however, is the ambiguity of Visa's rules,
surcharge policies." which MiCamp asserts amounts to an end-run around

MiCamp alleges Visa, through its anti-differential
pricing initiatives, is in violation of federal antitrust law.
("Differential pricing" refers to cash discounts and credit Visa has never hidden its disdain for credit
card surcharging.) card surcharging, or for merchants offering
James Huber, principal at Global Legal Law Firm, and discounts to customers who pay with cash or
lead attorney representing MiCamp and the proposed
class of ISOs, suggested in an email that Visa deliberately other less expensive methods. But businesses
obfuscates its policies and rules. "The surcharge/discount and ISOs have the law on their side.
rules are unclear on purpose to allow only Visa and the
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