The short answer? No. Currently we operate well within the Mastercard and Visa service rules; while the laws regulating a cash discount program may change in the future, everything we do is by the book.
For example, take a look at the stipulations regarding Visa’s views on cash discounts:
From Visa Core Rules and Visa Product and Service Rules – 22 April 2017
“126.96.36.199 Discount Offer – US Region and US Territories In the US Region and a US Territory, a Merchant may request or encourage a Cardholder to use a means of payment other than a Visa Card or a Visa Card of a different product type (e.g., Visa Classic Card, Visa Traditional Rewards Card, Visa Signature Card) than the Visa Card the consumer initially presents. Except where prohibited by applicable laws or regulations, the Merchant may do so by methods that include, but are not limited to:
- Offering the consumer an immediate discount from the Merchant’s list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the consumer, who initially presents a Visa Card, uses instead another general purpose payment card or another means of payment.
- Communicating to consumers the reasonably estimated or actual costs incurred by the Merchant when a consumer uses a particular general purpose payment card or means of payment or the relative costs of using different general purpose payment cards or means of payment.”
Since you’ll have signage stating that your price carries a 4% service fee, when someone pays with cash, they are receiving a discount off of the stated price, not a percentage increase when they choose to pay with a credit card. This is not a surcharge and Visa, Mastercard, and the courts have all agreed upon this distinction following a 2013 ruling.
From Mitchell Katz, the spokesman for the Federal Trade Commission: “the Dodd-Frank law prohibits a payment card network such as Visa ‘from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards,’ said Katz. “Neither surcharging, nor a cash discount is illegal.”