Just because you have a merchant account doesn’t mean you can do anything you want with it. Visa and MasterCard has guidelines governing their use. Here are some things you cannot do:
- Personal Use – Visa and MasterCard do not allow their services to be used for personal reasons. All accounts must be established for one business and to be used only for that business’ products and services. An account cannot be established for an individual nor can a merchant use their merchant account for personal reasons.
- Factoring – Visa and MasterCard do not allow more then one business to use a merchant account. All accounts must be established for one business and to be used only for that business’ products and services. When a business processes transactions for another business, even if they own that business, they are “factoring”.
- Charge More for Credit Card Transactions – Visa and MasterCard does not allow a merchant to charge more for products/services paid for by their credit cards. They do not want paying by credit card to be seen in a negative light.
If a merchant wishes to offset the additional costs of accepting credit cards, they should do one of the following:
- Increase prices on their products/services for all purchases
- Increase prices on their products/services and then offer a cash discount
Charging a convenience fee for accepting credit cards is not considered acceptable.
- Set a Purchase Minimum – Visa and MasterCard do not allow merchants to set a minimum purchase amount for which credit cards may be used. For example, a merchant may not declare that a purchase must be at least $50 in size in order to use a credit card for payment.