The settlement proposed by the Department of Justice of the United States to Visa and MasterCard can make a big difference to the way credit cards are being used to make purchases. Customers will have to either pay more money or save more money depending on the card they use to pay for the products and services they opt for from various stores.
This agreement, proposed by the Attorney Generals of seven states of the country, led by the Department of Justice, and accepted by these two major lenders will enable merchants to roll out interesting incentives to customers who agree to pay using debit cards or other cards that do not charges a high fee.
There are various permissions that Visa and MasterCard should give the merchants. Here is a glimpse of a few of those permissions.
The new settlement will enable the merchants to offer not only incentives, but also discounts to customers for using a low fee credit card, debit card or cash for making their purchases.
Merchants will also be able to tell the consumers about the drawbacks of using certain types of credit cards for making their purchases and offer them a chance to select a different mode of payment.
As a part of the settlement, Visa and MasterCard will now allow merchants to disclose the fees they will have to pay if they choose to make their purchase using credit cards. They can give consumers a list of payment options that will help them save money.
This is marked change because the current rules laid down by these credit card lenders on merchants prevents the latter from revealing the fees to the consumers. As per the current guidelines, the merchants are refrained from asking consumers to opt for a different mode of payment.
As per the information given by the office of Mike Cox, an Attorney General with the state of Michigan, credit card lenders profits to the tune of $35 billion annually just from the fees collected from merchants across the country. Cox`s spokesperson, Joy Yearout, said that the new settlement will facilitate healthy competition and also help all of them save some precious dollars.
While all this looks promising, it will take time for them to come into effect and yield results. With American Express unwilling to budge from its stand, matters don`t look so convincing. American Express is not happy with merchants giving preferential treatment to credit cards issued by certain lenders.