BOSTON–With business owners claiming credit card fees are hampering their margins, the Massachusetts Senate has moved forward with a bill that would allow businesses to charge customers paying with cards for those fees. The legislation has moved out of committee with a favorable recommendation from senators.
Senators on the Committee on Consumer Protection drafted the bill that would allow sellers to charge customers paying with a credit card a fee that is no greater than the seller’s cost to process the payment, according to MassLive. If the bill passes, Massachusetts would join most states with laws allowing businesses to charge credit card surcharge fees, the report added.
Five senators voted to advance the bill and Sen. Kelly Dooner didn’t vote “yes” or “no.”
What Would Be Required
According to MassLive, the bill, which draws from three proposals, also requires sellers to notify customers of the credit card surcharge for in-person, online purchases and transactions made over the phone.
Sen. Pavel Payano (D-1st Essex), the committee’s co-chairperson, said the bill offers “a practical path forward.”
“One that supports our small businesses while making sure consumers are clearly and proactively informed about surcharges,” he said in a statement to the News Service.
Support From Restaurant Owners
According to MassLive, the measure has support from restaurant owners who say credit card fees are a growing portion of their expenses since 2020.
“Before the COVID-19 pandemic, credit card sales made up about 50% of the purchases at Turner Seafoods, which has three locations, owner Kathi Turner said during a July hearing on the proposals, according to MassLive. “After the pandemic, credit cards are used in more than 90% of sales. Cash is almost being eliminated in the field, so it’s in some sense, a life or death to many, many small businesses.”
The MassLive report added that research by the National Federation of Independent Business shows credit card fees are rising up the list of businesses’ cost drivers. A 2024 NFIB report showed credit card processing costs were listed as No. 22 among top cost drivers and impediments to doing business. NFIB’s 2016 report found credit card processing costs ranked No. 38, the report added.
