The change came amidst the $7.25 billion settlement Visa, Mastercard and a slew of major banks agreed to pay out to retailers nationwide. Included in the terms of the settlement was a provision allowing businesses to pass surcharges onto customers so long as a notice of the practice is clearly displayed at the entrance of the business, at the point of sale and itemized on the receipt.

Over the years, a handful of states have passed legislation to explicitly prevent such practices, including California, Massachusetts and Florida, even though the practice has always been outside of Visa and Mastercard’s guidelines. Many small businesses across the country have ignored this, choosing to tack on a flat rate of 50 to 75 cents to each transaction, which many customers begrudgingly pay.

Now, Lawmakers in 11 states have introduced legislation to protect consumers from potential credit card surcharges, including Tennessee, Vermont, South Carolina, Kentucky, Hawaii, Pennsylvania, Missouri, Rhode Island, New Jersey and Utah.

Though this legislation may be welcomed by consumers, the National Retail Federation, who protested the settlement, said to NBC News that it was “a waste of the legislative process.” The federation, which represents retailers nationwide, believes legislators’ time would be better spent bringing “greater competition into the marketplace by prohibiting the price fixing of the hidden swipe fees merchants pay to process credit card transactions.”

The lawsuit was brought about in 2005 after a group of retailers accused the processing giants of anticompetitive behavior by secretly colluding to fix processing fees, thus inhibiting fair competition in the marketplace.

Be sure to check back with CCP.net for continuing coverage of the proposed legislation.

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Surcharge disclosure sample provided by VISA.

Beginning January 27th, 2013, merchants will be allowed pass surcharges onto customers utilizing a Visa credit card in states that haven’t explicitly made the practice illegal. The change of terms comes in the wake of the $7.25 billion settlement that Visa, Mastercard and a handful of large banks will be paying out to merchants across the country.

Merchants that choose to pass these charges onto consumers must post notice of these charges at the entrance of the store and at the point of sale or interaction. Additionally, the surcharges cannot exceed 4 percent of the total transaction and the dollar amount of the surcharge must be included on the receipt that merchants provide to customers.

The preliminary approval of the settlement by the United States District Court for the Eastern District of New York provides certain allowances to merchants before final approval, which has been deferred and is expected in late 2013.

Merchants that haven’t illegally embraced the practice already will now face the dilemma of whether they’d rather continue to pay out large amounts for the service or risk losing customers who object to their new policies. If you’re interested in knowing what percentage of businesses plan on passing surcharges onto consumer, vote below and see the results!

For more information on Visa’s new surcharge polices, visit their Operations and Procedures disclosure here.

Two thirds of respondents (66 percent) believe that mobile phone payments will become preferential to plastic card and 61 percent think that phone payments will eventually replace cash.

Some may say these trends spell doom for cards themselves, but many consumers have expressed fears of identity theft and other security issues related to accessing sensitive financial information through their smartphones. And interestingly enough, some credit card issuers are developing technology to enhance security and provide new functionality options on plastic cards.

These “Generation 2.0 Cards” have buttons built into them that allow consumers to utilize store rewards, or provide an extra layer of security by requiring PIN codes to be entered when conducting transactions.

Some businesses are investing heavily in these new cards assuming that the mobile payments revolution is still years away from becoming the preferred transaction method. Mobile payments have received a lot of attention lately and the new industry is experiencing a gold rush or sorts, where many companies are vying to establish themselves as the standard for smartphone payments, including Google and their product, Google Wallet.

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The number of breached accounts is currently unknown, but the New York Times has reported that unauthorized purchases have been discovered on some of the compromised accounts.

The infiltration was discovered on Sept. 14, after which the company immediately disconnected all pin pads in all of its stores nationwide. For now, customers will have to hand their debit or credit cards over to clerks to be swiped for all transactions.

The company is assuring customers that its online transaction and those made with the company’s Nook devices are secure, including its customer database.

The FBI New York agency is currently investigating the breach. Barnes and Noble is suggesting that any customers who utilized their PIN pads at any of their stores should consider immediately changing their PIN numbers and check their accounts for any suspicious transactions.

Check back with CCP.net for updates on this developing story.

The settlement has stirred a large resistance among the plaintiffs, including the National Grocers Association, National Retail Federation, Wal-Mart Stores and Target Corporation, who claim that the agreements of the settlement do little to stop Visa and Mastercard from raising fees in the future.

History of the Case

The seven-year-old litigation arose from businesses that claimed Visa and Mastercard colluded with each other in preventing businesses from passing the credit card swipes imposed on them by the processing giants over to their customers. Swipe fees can range between 1 and 3 percent, which sets the vast majority of businesses back substantially each year.

If the settlement isn’t approved by Gleeson, negotiators from both sides will be forced to sit down and re-asses the terms and conditions of the settlement.

Make sure to check back with CCP.net for Gleeson’s decision and an analysis of how its approval could potentially affect businesses across the country.

Lo and behold, Apple is planning on testing that functionality in the immediate future by allowing consumers to make purchases at Apple Store locations through Passbook within weeks by adding the ability to upload Apple gift cards to Passbook. It’s a small step, but this could have gigantic implications.

Current Trends

Currently, the mobile payments industry is full of start-ups clamoring for big business contracts with major retailers like Square recently did with Starbucks.

When the iPhone 5 debuted last month, many thought that the non-inclusion of NFC technology could be construed as a death blow to utilizing that medium for mobile payments. Remaining options on the table include scannable QR codes and bar codes, which seem to be the path of Apple’s choosing.

Final Thoughts

If Apple were to connect the iTunes store accounts with Passbook, the amount of users immediately able to conduct transactions through their smart phones would jump so astronomically high that it would seem near impossible for any competitor to measure up.

Breadcrumb acts as a comprehensive business solution, integrating the ability to make reservations, place an order, email or print receipts, provide data on real time sales, track employees’ shifts and now fulfill Groupon’s famous deal-of-the-day offer.

Signs of Things to Come

The service has been anticipated since May earlier this year when Groupon strategically acquired Breadcrumb, not-so-subtly announcing its intentions to its evangelical small business adherents and burned detractors.

Breadcrumb costs $99 per month and it’s an additional $100 per in-store iPad. Businesses can also purchase a bundled package that includes a cash drawer as well as printers for purchase receipt and kitchen tickets.

Bottom Line

Groupon is pushing to reinvigorate its clientele and is trying to deeply integrate itself into the businesses that keep it alive. Many business owners have complained that their Groupon experiments ended horribly, some with major losses and others just simply fed-up with the entitlement issues that accompany freshly expired offers. If Groupon’s stock is any indication, faith in the company is fading fast, but this could be the turnaround the company arguably needs.

The move comes in the midst of ongoing tensions between consumers and banks, promulgated through arbitrary fees and the slow dissolution g of free checking. Americans considered “under-banked” has been on the rise as of late, but in a digital payment age, solutions for consumers who wish to circumvent what they deem as burdensome fees seem to be popping up left and right.

Enrollment and Setup

Enrollment with Bluebird is free if done from their website — those who wish to enroll at a Walmart store are charged a nominal account set up fee.

The allure of Bluebird rests in the fact that the American Express brand is accompanied by an unspoken connotation of being up scale, and since not everyone can qualify for one of their credit cards due to poor credit history, this gives consumers a chance to establish themselves with the company and most importantly, conduct digital transactions where Amex is accepted.

Card perks include no annual or monthly fees and the ability to withdrawal cash from more than 22,000 MoneyPass ATM machines at no cost.

Booming Market, Sour Reputation

Pre-paid debit cards have taken a lot of flak as of late, namely Suze Orman’s card which consumers say is drenched in fees and experts have called out for disingenuously claiming to help establish and build credit. Though some pre-paid cards may have a bad rap, their convenience seems to overshadow added costs for those who need them the most.

CCPnet: How was edō conceived and by whom?

Braswell: I was looking at coupons through the eyes of a typical shopper – my daughters, who never clip a coupon (but do like to shop!) – realized there was an opportunity to market to consumers who like value, but don’t turn to Sunday circulars for their discounts and deals. By thinking about the long term capital needs and opportunities for an offers platform company, I embarked on the adventure that is edō. Namely, I saw an opportunity to make shopping and saving simple for everyone, no scissors required. We believe simple will separate the winners from losers.

CCPnet: Are customers ever surprised to find they unwittingly received a discount they weren’t aware of or must a consumer enroll in a deal before being able to receive it?

Braswell: All the communication is through the bank and card issuer – edō is blind to the consumer. Offers are communicated to consumers via the banks’ preferred communication channels, such as email, text and mobile bank app. Whether a consumer is automatically enrolled or must opt into receiving offers depends on the bank or card-issuer. However, all edō bank partners give their cardholders the opportunity to opt-out of receiving offers.

CCPnet: Do merchants have access to statistical data related to their campaigns? If so, what kind of metrics is included?

Braswell: Yes – edō is highly measurable, providing data that helps merchants track campaign ROI and adjust along the way as needed. Data provided includes program ROI based on sales and spend, new and repeat customer traffic, average order size and offer redemption rates.

For example, a top 10 retailer just this past month saw the following with its edō program:

o   On a $20,000 spend, the program drove $750,000 in sales, a 34 to 1 ROI of actual sales.

o   Drove traffic with new customers: 75 percent of those were incremental, new customers.

o   Drove size of order: Increased averaged basket size by 90 percent.

Additionally, a top quick-service restaurant (QSR) who used edō:

o   experienced a 17 percent redemption rate of their offers.

o   30 percent of the ‘new customers’ who redeemed the offer returned within two months, indicating an ability to drive frequency and repeat purchase.

CCPnet: Are refunded credits sent to bank accounts only or can they be reimbursed to a credit card? (If a consumer makes a purchase with their credit card, they’re charged the total amount but refunded the discount to their bank account?)

Braswell: When a consumer redeems an offer, the savings is instantly credited back to their account and the savings are ready to spend.

CCPnet: How long do campaign offers typically stay good for?

Braswell: Campaign lengths differ for each merchant and bank partner depending on their business and marketing goals, but generally last 1-2 weeks.

CCPnet: Can consumers track their savings?

Braswell: Yes, consumers can track all of their savings just as they check account balances online, via their bank statements or on their mobile apps, as the credit from redeemed offers will appear instantly back into their accounts.

CCPnet: How many merchants are enrolled with edō and could you drop a few names? How many consumers are currently enrolled with edō

Braswell: There are more than 200 local and national merchant partners in the edō merchant network, including Nordstrom, Target®, SUBWAY®, Best Buy, Body Shop and Crate & Barrel®. We are live with 140+ leading financial institutions that have a total combined cardholder reach of 150 million consumers.

CCPnet: Which banks and credit card issuers is edō already connected with.

Braswell: edō is live with 140+ leading financial institutions, including Fifth Third Bank, Ally Financial and Vantive, with more to be announced in the upcoming months.

CCPnet: edō just received another $15 million in venture funding, which is very exciting. Is there anything else exciting coming in the near future that you can tell us about?

Braswell: What I can tell you is how we will use the funding. Namely, we will improve upon our market-leading strengths and investing in growing our staff. We will also scale the reach of the edō offer and content network by expanding partnerships with major advertisers, merchant acquirers, mobile payment providers and media publishers. Finally, we will drive the company’s growth strategy across the small and medium-sized business (SMB) market. There are an overwhelming number of social, local and mobile advertising solutions on the market, most of which have unproven ROI and leave many small merchants struggling to bring profitable customers in the door and get them coming back. High merchant fees, laborious or delayed redemptions and untargeted deals further complicate matters for small businesses with limited marketing budgets. We believe we have a better tool that offers local and small businesses a simple way to drive traffic and measurable, attributable sales. We are able to target new customers by looking at their propensity to spend, and do so with no risk to the merchant – you only pay when an offer is redeemed.

The settlement, which leaves many doors open for Visa and Mastercard to continue with their anti-competitive behavior, still needs approval from the judge presiding over the case by Oct. 19. The seven year old case was sparked by merchants who claimed Visa and Mastercard colluded in blocking merchants from passing fees on to customers, something that they claim eats away at their profits.

Other major companies to join the NRF and NGA are Target and Walmart, two of the largest retail chains in the country. Even Sen. Dick Durbin has spoken out that the terms are unfair. The terms leave out any language that would cap the swipe fees, which many believe is a loophole that Visa and Mastercard will use to recoup their losses in the not-too-distant future.

As it stands now, considering the amount of opposition, there is a good chance the settlement will be rejected and may be forced into renegotiations, unless they choose to move forward with the litigation. Be sure to check back with CCPnet for updates on this case.