A recent settlement between Visa, MasterCard and retailers allows merchants to charge consumers extra for paying with plastic, but a recent poll revealed that consumers may not take kindly to the new fee.
A poll by CreditCards.com revealed that 65 percent of Americans say that they would stop using credit cards if merchants began charging extra fees for credit card transactions, regardless of the size of the fee, Convenience Store News reports.
Before the settlement, Visa and MasterCard prohibited merchants from charging a “checkout fee,” though both card processors agreed as part of the recent settlement that they would allow merchants to charge that fee as early as 2013 in order to recoup lost revenue from swipe fees. Both companies also agreed to lower interchange rates for eight months.
Retailers initiated a class-action lawsuit in 2005, alleging that the card processors and banks colluded to fix interchange rates. Plaintiffs in the suit have until Oct. 19 to opt in to the settlement, according to Convenience Store News.
Some individuals polled said that they would not be willing to pay a surcharge, while two percent of poll participants said that they would be willing to pay a surcharge capped at two percent of the transaction cost.
Additionally, the poll revealed that the younger the respondent, the less willing he or she was to stop using a credit card. While half of 18- to 34-year-olds would switch to a different payment method, 63 percent of respondents age 35 to 49 would do so.
“It’s a lot easier to say you won’t pay a fee in a telephone survey than it is to actually follow through when you’re standing at the checkout and you realize you don’t have cash,” Larry Compeau, a professor of consumer behavior at Clarkson University, said, Convenience Store News reports. “I do think a certain percentage of people will refuse to pay, but what’s more important is that the people in the poll are sending a clear message to retailers: Don’t pull this on me.”
Ken Manning, a marketing professor at Colorado State University, said that retailers may decide against charging a credit card fee.
“I suspect surcharges to emerge mostly in situations where there’s a lot of price sensitivity, where consumers really compare prices,” Manning said, according to Convenience Store News. “There would be pressure on the retailers to lower their prices on the shelf and then you would pay a surcharge only if you paid with a card.”