As every small business owner knows, the expense of credit card processing fees can be a crippling burden—particularly for up-and-coming companies. As recent news developments demonstrate, the struggle to keep those fees low and manageable is still an ongoing one.
Under a proposed multibillion-dollar settlement with several major credit card companies and banks—including MasterCard, Visa, JP Morgan Chase, and Bank of America—merchants around the country now have leeway to charge customers additional fees for paying with credit cards. As part of the settlement, MasterCard and Visa will also reduce—for an eight-month period—the rate of credit card swipe fees.
The $6 million settlement—thought to be the largest ever reached in any anti-trust suit in the United States—was reached last month, seven years after those companies were sued in federal court on charges of price-fixing and other unfair practices. The lawsuit, brought on behalf of about seven million merchants, alleged that the companies were working in tandem to keep credit and debit card payments high, and that they worked to prevent stores from requiring customers to buy using cash or checks.
However, many merchant associations are calling for the settlement to be rejected, among them the National Community Pharmacists Association, the National Association of Convenience Stores, and the Retail Industry Leaders Association. They allege that the terms of the settlement do not go far enough toward relieving the credit card processing fee burden, and that the settlement would forbid merchants from ever suing the companies again.
Many retailers are also dissatisfied with the settlement’s emphasis on the right to charge for credit card use. They argue that market competition would discourage them from charging customers extra for using cards, and that those fees are already prohibited in 10 states. If the call for rejection grows strong enough, the settlement could be scotched.
At Merchant Advocate, based out of New Jersey, we work to negotiate the lowest credit card processing fees available for our clients. Visit us on the Web for more information about our expense reduction services, or call (732) 727-2073 for a free evaluation.