Visa Says Cash Discount Programs Violate Network Rules

Visa has released a bulletin revealing that many programs marketed as “cash discount” are non-compliant with the payment company’s rules.

The company explained that its discount offer rule prohibits programs that encourage merchants to add a fee on top of the normal price of the items being purchased, and then give an immediate discount of that fee at the register if the customer pays with cash or debit card. Visa added that merchants who engage in this type of cash discount program are subject to non-compliance action.

Merchants that properly utilize a cash discount method are those in the automotive fuel market, according to Visa.

These businesses typically have signage that clearly displays the credit price next to the discounted cash or debit price. In addition, the discount is taken from the regular price of the fuel, and does not include any additional fee or surcharge that is removed when the customer pays with cash or a debit card.

“To maintain a level playing field for all participants of the payment system, Visa actively enforces its rules pertaining to cash discount programs. Acquirers should proactively monitor the discount programs offered by their processors or agents to ensure that the programs do not violate the Visa rules,” the company stated.

Visa’s bulletin gives our industry much-needed clarity: ‘cash discount’ is not a loophole within the rules, and merchants that add a fee at the point of sale must comply with the requirements for surcharging, regardless of what they call the fee,” Jonathan Razi, CardX CEO, said in an emailed statement.

The announcement comes after Clover’s decision last month to remove all “cash discount” programs from its app marketplace after declaring that, “a ‘true cash discount’ does not add any fees or surcharges at the register” in an email to its users.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.