Monday, July 16, 2012

Change in credit card rules?

You might have heard about MasterCard and Visa agreeing to pay more than $6 billion to settle accusations that they engaged in anticompetitive practices in payment processing. The tricky side effect, though, is that, assuming a judge approves the settlement, merchants can now "charge higher prices to consumers who decide to pay for their purchases with credit cards...Until now, the card companies banned merchants from adding such a surcharge, although gas stations and other retailers sometimes offered a discount for customers who paid in cash."

Frank Keating, the president of the American Bankers Association said: "Let’s be clear — retailers, not consumers, benefit from today’s resolution." And it apparently didn't hurt MasterCard and Visa. On the stock exchange Friday, "Visa rose 2.3 percent to $126.91 in extended trading in New York. MasterCard advanced 2.9 percent to $442." "Defendants in the case include Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Capital One Financial Corp., Barclays Plc and HSBC Holdings Plc."

Not incidentally, "those rule changes wouldn’t take effect in states where laws specifically prohibit credit-card surcharges, said Douglas Kantor, a lawyer for the National Association of Convenience Stores." On the map of states with such laws, according to NBC News, were California, Texas, New York, and Florida, the most populous states in the union.

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