Visa and MasterCard know there is nothing that American consumers love more than fees and surcharges. That’s why the credit card companies are reportedly looking to do away with longstanding rules that prohibit merchants from adding on extra costs to customers who pay with credit.
According to the Wall Street Journal, it’s about time for the credit card networks and card issuers to settle lawsuits involving the swipe fees charged to merchants. As part of this settlement, which involves more than 50 suits filed during the last seven years, it’s possible that merchants will be allowed to tack on surcharges for customers who want to pay with plastic.
The plaintiffs — which include grocery biggies like Kroger and Safeway — allege that credit card providers have long conspired to collude on swipe fees, effectively removing any competition from the market and squeezing exorbitant fees from merchants, which they have then been forbidden from passing on to customers.
In 2011, the hotly debated Durbin Amendment to the Dodd-Frank financial reform legislation attempted to severely limit the swipe fees banks charged merchants for debit card transactions. In the end, the average fee was cut in half, but the amendment did not affect credit card transactions. Read more >>
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