Stinson Payments & Financial Products Attorneys Examine NY's Revised Credit Surcharge Law in Law360 Article

02.28.2024

Stinson LLP attorneys Audrey Carroll and Tom Witherspoon authored an article for Law360, "NY's Revamped Card Surcharge Ban Is Unique Among States," providing insight on New York intensifying its ban on credit card surcharges by allowing two-tier pricing.

The attorneys say New York is one of several states to have long-standing laws banning merchants from imposing surcharges on credit card transactions while permitting discounts from the regular price for paying in cash. They note the state's response is unique among other states that have passed recent legislation to control or restrict credit card surcharges. "New York has essentially doubled down on its ban, prohibiting the posting of the regular price plus the percentage amount of the surcharge," they write.

The attorneys provide insight on the constitutional challenges regarding how merchants communicate prices. They also examine state laws that limit merchants' ability to add a surcharge when buyers choose to pay for goods or services with a credit card, and explore the current federal consumer financial regulatory environment and its impact on what qualifies as a permissible payment processing fee.

"Overall, when making the decision of whether to begin charging a processing fee on any payment method, including credit card surcharges, it is important to consider state law limitations, payment network rules and the current regulatory environment," they write.

Carroll focuses her practice on guiding clients through complex matters in the areas of financial services, payments systems and virtual currency. She assists financial institutions and FinTech companies, including money transmitters, prepaid card issuers and online marketplace providers, in addressing regulatory and contractual matters.

Witherspoon's practice focuses on payments, consumer financial products, and other bank and financial regulatory matters, with an emphasis on compliance, financial transactional and litigation matters. He helps banks and other financial institutions navigate the complexities of federal and state law and regulation applicable to their operations, relationships, product development and compliance management.

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