Are NY shoppers going to pay more for credit card purchases?

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Major credit card providers Visa, Mastercard, American Express and banks have agreed to pay retailers over £3.83 billion ($US 6 billion) to settle a long-running legal battle that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. However, the interesting part is what’s going to happen after the settlement?

NY shops allowed charging extra for credit card purchases

The case has been classified as one of the largest antitrust settlements in U.S. history, 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 credit cards. As part of the settlement, announced late Friday, stores from Macys to Tiffany will be allowed to charge customers more if they pay using a plastic card.

Banks might lower transaction fees

But at a time when shoppers increasingly use credit and debit cards, merchants will face a dilemma: Whether to charge shoppers extra for using credit cards, and if so, how to do so without annoying them.

Banking analysts now expect the case might finally lead to banks lowering the transaction fees involved in shopping, which would be a victory for both New York shops and shoppers.

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