Merchants To Have Fewer Credit Card Restrictions
The U.S. Department of Justice announced yesterday that it has filed suit against credit card companies Visa, Mastercard and American Express over what it calls "anti-competitive practices" relating to the credit card companies' restrictions on merchants' ability to offer discounts to users of cards they prefer to accept.
Proposed settlements have already been reached by the DOJ with Visa and Mastercard that will have those two companies agreeing to allow merchants to offer customers discounts or rebates for using the cards that they prefer to accept (such as debit cards, which usually have lower merchant fees). American Express has vowed to fight the suit.
The ability to incentivize their customers to use preferred cards will be an important win for small businesses when the settlements with Visa and Mastercard are finalized. Credit card acceptance fees can be a major expense for both retail and wholesale businesses, and until now businesses have had little leverage in the fight to minimize those costs.