Visa, MasterCard Change Policies; Amex Balks

Posted on

  • email
  • twitter
  • facebook
  • share this

share this



The two largest credit card companies in the world almost immediately settled a dispute filed in federal court Tuesday by agreeing to allow retailers to offer discounts to shoppers using less expensive payment methods – debit cards or credit cards without rewards, for instance, as opposed to more costly (for merchants) credit cards that do offer rewards.

Visa and MasterCard were two of three defendants named in the lawsuit, and the third company – American Express – has refused to settle and will contest the suit.

Regardless of AmEx’s decision, the settlement will almost certainly have a significant positive impact on e-commerce retailers, and it will expedite even more change in the already chaotic payments field. With the emergence of mobile commerce, the credit card companies, major financial institutions and dozens of startup companies are racing to provide merchants (and consumers) with the most advantageous payments solutions, and Tuesday’s decision provides retailers with more options and greater leverage.

It is more costly for e-commerce merchants to accept payments from cards that offer substantial rewards, such as Visa’s Signature Preferred card, than it is to accept debit cards and no-reward credit cards. By having the ability to offer rebates to consumers using the lower-cost cards, retailers can incentivize the online payment process for the first time.

Tuesday’s settlement came about from a law that was signed over the summer allowing retailers to offer rebates for cash, checks and debit cards, but the distinction between rewards and non-rewards credit cards was not addressed at that time.

 
     :: Try iContact for FREE for 30 Days! Sign up now at iContact.com ::


Login To Comment


Become a Member

Not already a part of our community? Sign up to participate in the discussion. It's free and quick.

Sign Up

Be the first to comment on this article

999 E Touhy Ave
Des Plaines, IL 60018

Toll Free: 1.800.817.1518
International: 1.773.628.2779
Fax: 1.773.272.0920
Email: info@websitemagazine.com

Facebook


Twitter