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New York Credit Card Surcharges Get a Green Light as Merchants and the State Agree To Dismiss Lawsuit

Merchant plaintiffs and the state of New York filed motions Tuesday in a federal appellate court to dismiss the merchants’ challenge to New York’s law banning credit card surcharges. As a result, surcharges will be allowed when the merchant posts total prices for credit card purchases in dollars and cents.

The dismissal requests come in the wake of a New York state appellate court’s decision affirming merchants’ right to surcharge if they clearly inform consumers and do not make them do the math to determine the true price of a credit card purchase. In the bigger picture, the action means that another big state’s surcharge ban has fallen in the wake of bans being removed recently in Florida, Texas and California. Only six states now have such bans.

“With today’s resolution, we expect the New York law will survive, but in a far narrower form—and ‘no surcharge’ will simply mean ‘no surprise,’” Jonathan Razi, chief executive of CardX, a Chicago-based payment-technology company that automates compliance with surcharging rules, said in an emailed statement.

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