MasterCard tips

MasterCard & Visa near an Anti-trust settlement

With the Justice Department setting up an antitrust probe over credit card acceptance rules that allows merchants to give customers the option of using credit cards that have lower processing fees for the merchants who have to pay credit card companies fees to be able to accept and process credit cards.

Until now, merchants weren’t able to “steer” customers to use cards that charged them lesser processing fees (as different credit card companies charge different rates to merchants) but with the new regulations, merchants will be able to do this under special circumstances.

Mastercard and Visa are now in the process of giving merchants flexibility to exercise this option and this could be correctly construed as a victory for merchants while being the latest setback that the credit card industry is faced with, ever since the financial crisis of 2008.

And while there aren’t any fines that will have to be paid since this is a civil suit, the Justice Department’s role in investigating whether or not this practice by the credit card industry is anticompetitive or not has resulted in the reaching of the settlement by the two largest credit card networks, Mastercard and Visa.

While most people think that Mastercard and Visa will barely be affected by these changes, another twist to the tale is that American Express will not join the current settlement talks even though they charge the highest processing fees among other credit card merchants, and is more than likely to face a civil lawsuit from the Justice Department in the near future.

Regardless of the outcome, it seems as if merchants everywhere will benefit from this settlement.