“CARDX WEST” IS A REGISTERED ISO OF CARDX™
“CardX CEO Jonathan Razi and Chief Operating Officer Michael Tomko ‘worked closely’ with the Colorado house representatives and merchant groups, Tomko said by email.
‘The strong bipartisan support for the bill, the final version of which passed the House 61-4 and Senate 30-4, was informed by recognition that surcharging, when implemented properly, benefits not only businesses, but also consumers,’ Tomko said by email. He argued that merchant price hikes on goods and services to cover the credit card interchange fees was essentially a tax on the poor, while more affluent cardholders that receive rewards, such as cash-back, benefited.”
Read More“‘Colorado legislators looked at surcharging laws throughout the country and decided they did not want a Wild West environment if the state’s surcharge prohibition was dropped,’ says Michael Tomko, chief operating officer for CardX LLC, which lobbied and testified in support of the bill.
The signing of the bill in to law, which Colorado state’s legislature passed in June, closely follows defeat of a surcharging ban in Kansas earlier this year. Chicago-based CardX, which is a surcharging-services provider, filed suit against that ban.”
Read More“‘CardX has hit the trifecta: an AG opinion in Oklahoma that its no-surcharge statute is unconstitutional; a federal judicial decision in Kansas declaring that the Kansas no-surcharge statute is unconstitutional; and the Colorado legislature repealing its no-surcharge ban and allowing surcharges with robust consumer protections,’ Nash said.”
Read More“Razi added, ‘We serve businesses that are seeking to offset the rising cost of credit card acceptance and keep their prices low, and I believe that SB21-091, which harmonizes with industry rules and includes the most robust consumer protections in the country, will be an influential template for other states considering this issue.’”
Read More“CardX’s founder and CEO, Jonathan Razi, testifying before Colorado lawmakers in support of the new law, suggested Colorado could face a similar legal challenge, as the state’s anti-surcharging law closely mirrored the Kansas law.”
Read More“‘As surcharging becomes available in more jurisdictions, we’re seeing a shift to more prescriptive surcharging law—lawmakers want to permit surcharging, but define affirmative requirements for surcharging “the right way,”’ Razi says.”
Read More“More than 200 payment processors, including the giant payroll software firm, Paychex Inc., use software from technology company CardX LLC to provide surcharging capability to professional firms and online business-to-business companies, which incur higher transaction fees.”
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“A Chicago-based fintech called CardX LLC won a federal lawsuit in Kansas that declared unconstitutional a law prohibiting retailers from passing along credit card surcharges to customers and advertising lower prices for cash purchases.”
Read More“The complaint alleged that the no-surcharge law violated CardX’s rights under the First Amendment by prohibiting CardX from communicating a credit card surcharge to consumers via its patent-pending software while allowing merchants to offer ‘cash discounts,’ thereby controlling the manner in which prices are communicated to consumers, among other things.”
Read More“The upcoming interchange rate increases are the most significant in a decade and business owners should understand their options for managing costs.”
Read More“‘Businesses operating with tight profit margins often really benefit from surcharging because their alternative for taking cards when rates go up, as they have in the past, is to raise prices on their products,’ CardX’s Razi said. ‘The judge pointed out in our case that such a scenario results in cash and debit payers paying more because someone else is using credit cards.’”
Read More“Allowing credit card surcharges would benefit businesses and consumers, Broomes wrote. Kansas’ no-surcharge law results in merchants spread the cost of using credit cards around to all purchasers, he said.”
Read More“Nash said it was clear that Kansas violated the First Amendment in preventing merchants from explaining the surcharge.
‘We’re obviously very pleased, but we’re not surprised,’ he said of Thursday’s opinion.
Nash noted that after a presentation they made last year in Oklahoma, the state attorney general wrote an opinion that their statute was unconstitutional, so CardX didn’t have to file suit. He said he’s not sure which remaining state surcharge ban CardX will try to undo next.”
Read More“CardX COO Michael Tomko, also a Harvard Law graduate, was also pleased with the decision and noted the court ruling pertained specifically to CardX; he urged service providers to review state guidelines. The court held that prohibiting credit card surcharging was unconstitutional ‘as applied’ to CardX and CardX’s software, leaving open the possibility that the court could challenge the constitutionality of other surcharge solutions, he stated.”
Read More“‘The result in Kansas comes at a key moment for the payments industry,’ said CardX CEO and Harvard Law graduate Jonathan Razi. ‘Surcharging is becoming even more prominent as payments continue to move online, and, with upcoming interchange increases in April, this is timely relief for the many companies that will be looking to reduce their costs of payment acceptance.’”
Read More“With this ruling, only Colorado, Massachusetts, and Connecticut block surcharging on credit cards. Razi says CardX is evaluating its options to enter these states, though he adds, ‘We intend to be a 50-state provider.’ Network rules prohibit surcharging on debit card transactions.”
Read MoreCardX is proud to be named to Built In’s 2021 list of the top 100 workplaces in Chicago.
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