New Visa-Mastercard Settlement Affects Credit Card Pricing
A recent settlement between Visa, Mastercard, and U.S. merchants could introduce tiered pricing at checkout, allowing businesses to vary fees based on the credit card used. This follows a long antitrust dispute over interchange fees—charges banks collect when customers pay with credit cards.
Background of the Legal Battle
The agreement resolves a legal conflict spanning two decades concerning interchange fees. These fees have been a contentious issue between merchants and payment networks.
Settlement Details and Implications
- The settlement awaits court approval and may face opposition from some merchant groups.
- Previous negotiations failed after objections from merchant lawyers.
- Merchants currently must accept all Visa cards if they accept any.
- The settlement would let merchants selectively accept categories of cards within a network.
Your favorite latte at the local coffee shop could soon cost $5, $5.10 or $5.25—depending on how you pay.
For example, Costco only accepts Visa credit cards, but under current rules must accept all types of Visa if they accept any.
Expert Analysis
Analysts note that merchant choice will be limited by broad card groupings, making it unlikely that stores will refuse entire categories, including rewarding cards.
Summary
This settlement could reshape payment flexibility for merchants while impacting consumer costs subtly, pending court approval and further negotiation.
Author’s note: The evolving settlement aims to give merchants more control over credit card acceptance, potentially leading to varied pricing for consumers.