The Justice Department filed a lawsuit against Visa, MasterCard and American Express yesterday, charging that the three engage in practices that prohibit merchants from steering customers to
alternative payments such as cash or checks that don't carry transaction fees, Andrew Martin reports.
Visa and MasterCard have already worked out a settlement with the feds, subject
to court approval. American Express, which says it has spent billions of dollars to build an affluent customer base and to differentiate itself from Visa and MasterCard, vows to fight the charges and
says the settlement favors the other brands.
If the settlement goes through, merchants will be able to offer immediate discounts or rebates to consumers who use a particular type of
payment, a particular credit card network, or a low-cost card within that network -- say a debit card rather than a credit card, Martin reports.
They might even offer free shipping in
big-ticket items, suggests Mallory Duncan, svp and general counsel of the National Retail Federation. "It will be as different as merchants are creative," he says, "which is how the market is supposed
to work."
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