PaySimple’s David Sharp on Card Acceptance Guidelines for Merchant Accounts

With more and more small businesses obtaining merchant accounts to accept credit cards, it is essential to review some common scenarios that business owners and their consumers may run into. The merchant account agreement contains a complete explanation of key procedures, but here are some highlights.

Within the merchant agreement, there are card acceptance procedures, also known as Operating Rules. Most of these rules are generally set in place to protect all parties in the process and keep commerce flowing. If you are a business owner, at first glance, some of these conditions may not seem advantageous to your business. But it is important to keep in mind that aside from running a business, you are a consumer protected by these rules just the same.

The following is a list of common merchant violations (most you have probably even witnessed):


  1. Honor All Cards Policy — Merchants are required to honor all cards presented by their customers if they have a merchant account set up to do so. They cannot turn away Corporate Cards, Purchasing Cards, Rewards Cards or the like to prevent paying additional fees and potential surcharges for accepting them. Although those card types may carry an additional expense, businesses are actually likely to experience a net benefit by taking these cards because the Corporate & Rewards card transactions are generally higher than normal Consumer cards. In other words, the higher transaction amount offsets the additional card acceptance expense.

  3. Transaction Surcharges — A fee or surcharge may not be added to the advertised price of goods or services in an attempt to offset the cost of card acceptance. For example, a merchant cannot charge an extra percentage or flat fee on the payment if the customer pays with a credit card instead of cash. However, discounts may be offered off the advertised price for cash, check or other payment methods. There are minor exceptions to this rule, so be sure to check your merchant agreement to see if your business may qualify for this sort of payment.

  5. Floor Limits — Merchants may not set an artificial “floor limit” under which they would not agree to accept a payment card. If a business signs up to take credit cards, they must take the card presented regardless of the dollar amount. You will sometimes see merchants with a sign at the register that reads “Credit Cards NOT Accepted for Sales Less Than $15.00.” This is a violation of the Operating Rules. If the cardholder complains to its issuing bank, the compliant would be sent from the issuing bank down the ladder, where fines or termination of the merchant account could result.


Instead of attempting to avoid the cost of accepting cards under these scenarios, embrace card acceptance for all transactions to yield higher net sales and improve your customers’ experience while doing business with you.

While merchant processing agreements are sometimes worded differently, most of the information is typically the same across the board. When situations like the aforementioned arise, it is always best to consult your agreement for specifics. If you need additional assistance with the terms of your agreement, please contact a representative to help understand the guidelines and benefits of the Operating Rules.


David Sharp is the Vice President of Business Development with PaySimple, where he is responsible for leading the development and implementation of PaySimple’s horizontal distribution strategy. This channel includes a broad spectrum of companies, such as Independent Sales Organizations, which like PaySimple, aim to provide enabling technology solutions to small and medium businesses nationwide. For more info, go here.

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