Credit card firms to pay $6b

Monday, July 16, 2012 - New York—Visa, MasterCard and major banks agreed to pay retailers at least $6 billion to settle a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. As part of the settlement, stores from Rite Aid to Kroger will be allowed to charge customers more if they pay using a credit card.

The pact, announced that called by lawyers involved in the case the largest antitrust settlement in US history. It was seen as a major victory for merchants that have long complained about the billions of dollars in so-called “swipe” or “interchange” fees that they pay to banks for purchases made using plastic. But at a time when shoppers increasingly are using credit and debit cards, merchants will face a dilemma: Whether to charge shoppers extra for using plastic, and if so, how to do so without angering them.

Marilyn Landis, who was last year’s chairman of the National Small Business Association, said that the settlement is a victory for small businesses across the country because it could ultimately lead to banks lowering the fees they charge stores for customers’ credit card purchases. Landis, who owns Pittsburgh-based financial services firm Basic Business Concepts, said that would be a big relief. She’s now paying 3.75 per cent each time a customer pays with a credit card.—Agencies