This thread covers a span of several years and has been dormant for 18 months. Card brand rules change, links to their operating rules change.
VISA's most current rules are dated October 2015
. - They say that you can collect debts using debit cards and prepaid cards, not credit cards.
184.108.40.206 Collection or Refinancing of Existing Debt – US Region (Updated)
In addition to the requirements in Section 220.127.116.11, “Payment of Existing Debt,” a US Merchant or
Acquirer may accept a Card to collect or refinance existing debt only if it complies with all of the
following, as applicable:
● If a Merchant is registered as a Limited Acceptance Merchant of eligible Visa Debit Category Cards
(including Visa Prepaid Cards) in all channels where payments are accepted. The Merchant may
accept all Visa Cards for any of its other lines of business that do not collect payments on existing
● Is assigned MCC 6012 (Financial Institutions – Merchandise and Services) or 6051 (Non-Financial
Institutions – Foreign Currency, Money Orders [not Wire Transfer], Stored Value Card/Load, and
● Accepts payment for any type of debt, excluding debt representing payday lending
● If accepting payment for debt that is considered uncollectible, all of the following:
– Is assigned MCC 6012 (Financial Institutions – Merchandise and Services)
– Does not conduct Recurring Transactions to collect the uncollectible debt
– Is able to collect the debt in a lawsuit
Debt - An advance of money borrowed by one party (debtor) from a third party (creditor). Debt is not direct payment to a
merchant for goods and services whether paid in full, in installments, or at a later date.
Uncollectible - Debt that has been charged-off or sold to a non-financial institution for the purpose of debt recovery
VISA Rule 18.104.22.168 says that a convenience fee is permissible if the following conditions are met. Note you must charge the same fee for all payment methods including card payments, check by phone or ACH payments.
Charged for a bona fide convenience in the form of an alternative payment channel outside the Merchant's customary payment channels and not charged solely for the acceptance of a Card.
Added only to a Transaction completed in a Card-Absent Environment
Not charged if the Merchant operates exclusively in a Card-Absent Environment
Charged only by the Merchant that provides goods or services to the Cardholder
Applicable to all forms of payment accepted in the payment channel
Disclosed clearly to the Cardholder:
● As a charge for the alternative payment channel convenience
● Before the completion of the Transaction. The Cardholder must be given the opportunity to cancel.
A flat or fixed amount, regardless of the value of the payment due
Included as part of the total amount of the Transaction and not collected separately MasterCard Rules
permit convenience fees provided that they are charged the same regardless of payment method. MasterCard also sets limits based on your discount rate in Chapter 16 of the rules. (These are lengthy so I am not posting them here.)
5.11.2 Charges to Cardholders
A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any
part of any Merchant discount or any contemporaneous finance charge in connection with a
Transaction. A Merchant may provide a discount to its customers for cash payments. A
Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited
service or convenience fees, and the like) if the fee is imposed on all like transactions
regardless of the form of payment used, or as the Corporation has expressly permitted in
For purposes of this Rule:
1. A surcharge is any fee charged in connection with a Transaction that is not charged if
another payment method is used.
2. The Merchant discount fee is any fee a Merchant pays to an Acquirer so that the Acquirer
will acquire the Transactions of the Merchant.