Visa, MasterCard Agree to $7 Billion Swipe Fee Settlement
Visa, MasterCard and banks that issue their credit cards have agreed to pay $7.3 billion to some 7 million U.S. merchants in a lawsuit over the fixing of credit card and debit card fees. The settlement, which includes $6.05 billion in payments for past damages and a temporary reduction in fees valued at $1.2 billion, is believed to be the largest antitrust settlement in U.S. history.
Two prices for cash and credit?
The settlement, which still requires judicial approval, would also allow merchants to start charging customers more for using credit cards, subject to a cap and other limitations. This means we may see more widespread use of separate prices for cash and credit, a practice that to date has primarily been limited to some gas stations. The rules allowing such surcharges, however, would likely not go into effect until early 2013.
While American Express and Discover were not part of the lawsuit, their customers will also be affected if a merchant decides to add a surcharge, as part of the settlement requires merchants to not discriminate among card brands.
Consumers in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas would be protected from this particular change, as those states prohibit merchants from adding surcharges to credit card transactions.