Visa and MasterCard credit card logos are seen in a store window in Washington on March 30, 2012. Credit: NICHOLAS KAMM/AFP/Getty Images
For years, Visa, Mastercard, and other card-issuing banks have been charging fees to merchants for access to their payment networks. Attorneys representing more than 7 million retailers, however, have argued that there has been no reasonable competition to keep the credit card swipe fees in check and were about to go to trial over the practice in September, until last week when banks finally settled. In addition to paying out $6 billion in damages, the banks will also reduce fees and even stop prohibiting retailers from imposing credit card surcharges to customers. Some economists predict the settlement will help smaller businesses, but no one knows yet exactly how this settlement will impact consumers and the general economy in the long run. One development that is clear about the settlement is that it marks a sizable loss for credit card companies in terms of profits and market control.
Have credit card companies become too influential? How worried are you that retailers will pass the cost of using credit cards onto the individual consumer?
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