Page 22 - GS240801

CoverStory

2. It seems to me that applying exceptions for certain So yes, there is absolute confusion in the marketplace.
states poses more work for the card brands and their There are also varying signs to post based on the proces-
sponsor banks. More work requires reprogramming, sor. That definitely needs to change to (1) permitted posit-
testing for accuracy and the potential for mistakes. All ing of notification.
of this will result in higher costs to cover the cost of
the additional work and potentially exposure to legal As an ISO who does not control the transactions, or have
action for non-compliance. any input into the platform the transactions are run on,
we are at the mercy of the processor to make internal
I would propose that the states work together, as they changes based on state requirements. I would think that
have in the past with EBT in the 1990s and other initia- this would add complexity to their systems which would
tives, to coordinate their approaches. Then the states lead to higher overall costs and human mistakes, and not
can propose unified national standards for applying accomplish any savings for businesses in that state.
exemptions for sales taxes and gratuities.
Yes, I certainly understand the need to protect both the
The patchwork created by state legislatures acting merchant and the consumer, but this should come, in my
singly is not optimal and, to my way of thinking, not opinion, from the card brand level. I think it would be
feasible. virtually impossible for a Fiserv, TSYS, Worldpay, Elavon
or any other platform to deal with the complexity of each
3. Certain state legislators seem to be able to draft uni- state setting up its own rules. Diversity in rules, by states,
fied legislative proposals in other areas of the law that certainly would add to the costs to processors which
are proposed virtually verbatim from one state to the would have to be passed on to the merchant.
next. Why can't we have a unified approach to sales
tax and gratuities for payments? Long term, if such an event happened and each state's leg-
islature set up different rules for the processors to follow, I
Steven Feldshuh do believe the processors would have the right to increase
Betterpay costs to the merchants, which the states are simply trying
to reduce.
With our footprint in the NY tri-state area, we are finding
it more and more difficult to address the concerns of mer- Personally, I think a wiser decision should be the reduc-
chants with the various cash discount and dual pricing tion and simplification of interchange. Yes, banks who
programs. In NY the confusion comes from the permitted are issuers are saddled with losses, but to what extent? If
credit surcharge program. Chase or Wells Fargo or any large issuer was losing money

on this aspect of their business would they really contin-
As an example, yesterday we received notice of a com- ue? I know the card issuing banks are very powerful and
plaint from Visa on a Pizza location that is set up for dual this reduction in interchange is just a pipe dream, but it
pricing. The setup is correct in that the business enters the would help solve the cost issue to businesses.
standard price, and if someone pays in cash, they receive a
discount. Visa claims you are not permitted to add a sur- Allen Kopelman
charge on debit cards. They also claimed that the business Nationwide Payment Systems Inc.
never registered with them.
1. These laws clearly show a need for more under-
Since this is not a credit surcharge program but a dual standing of the payment system's workings. These
processing cash discount program, Visa was incorrect in lawmakers need to learn how credit card processing
making this claim. Obviously, the business owner was works. These laws are to show that the state can make
upset and worried. We submitted pictures of the signage a law, and then some people will cheer. Later, real-
approved by our processor. We had to submit a copy of a ity will set in, and they will find out that what they
cash transaction showing the discount and a card transac- are asking for can't be done, and if it could be done, it
tion where there is no mention of any surcharge. would double credit card processing costs.

A ls o find us o n F ac e b o o k, They do not want sales tax, tips, and other taxes
Also find us on Facebook,
T
i
t
n &
w
t
o
L LinkedIn & Twitter for the charged interchange fees. When a customer comes
r the
in
ke
e
dI
r f
most up-to-date stories,
mos t u p-t o-d a t e s t o ri es, into a restaurant, the bill is $100, the sales tax is 5 per-
can’t miss events and newest
c a n ’ t miss e v e n ts a nd ne w es t cent, $105, they add a tip of $20, and the total is $125.
ind us t r y a nno unc e me n ts. That is all the processor sees. They do not see the tip
industry announcements.
or the sales tax, and they do not know if the person ate
by themself or with two other people, and they do not
know what they ate or drank.
k.c
nS
o
m/Th
n
w
.f
w
s://w
h
https://www.facebook.com/TheGreenSheetInc c It's the same thing; they want a special SIC code to
r
ttp
eG
c
boo
e
h
a
ee
ee
tI
n
ee
r
h
n-s
y/t
ee
e-g
h
.l
w
n
i
w
h
https://www.linkedin.com/company/the-green-sheet t
s://w
ttp
o
m/c
pa
m
o
ed
k
n.c
i
tt
i
r
e
w
h
https://twitter.com/The_Green_Sheet t track guns—someone walks into a sporting goods
s://t
ttp
n_S
ee
ee
h
r
o
.c
e_G
m/Th
store and buys a shirt, ammo or a hat. The credit card
22