Originally Posted by
tmiw
For the large banks, the original Durbin Amendment capped interchange to 0.05% regardless of how the card's run. IIRC there's still a difference between PIN and not-PIN for the cards from smaller issuers (and I imagine it's a significant enough difference that the larger stores are incentivized to steer people towards the former).
You're ignoring the 22 cents in addition to the five basis points for larger issuers under Durbin. If the issuer has less than $10B in assets, they're exempt and it's far more.
Originally Posted by
cbn42
Yup, this is the bottom line. Visa has more money to spend on lawyers than the merchants. They basically dragged out the lawsuit until the merchants couldn't justify the cost anymore, and the merchants were forced to settle on unfavorable terms. Unfortunately, that's how many lawsuits are resolved in our legal system.
I wonder if merchants will choose to opt out of the settlement this time, and what that will look like.
It took 18+ years for Visa to offer the tiniest crumb. I expect merchants to largely accept the offer, on the grounds that, in theory, it provides some relief (without Visa/MC admitting wrongdoing) and the right to sue again in 5 years (assuming Visa/MC hold up their end of the agreement). Individually suing Visa/MC absent the class (look at what the class was able to get in 18 years?) is butting your head against the wall.
If you gave me a magic wand and told me I was, at a point in time, god of credit card swipe fees - I would implement EU style interchange caps. As someone who utilizes both rewards and credit card benefits heavily, I would personally suffer from that choice. Most people here would. But intellectually, if it was an across the board cap, I could buy into it. Or let the free market compete.
It's basically a "
when in Rome" situation. Merchants are powerless to effectively stop Visa/MC swipe fees. We as cardholders are effectively powerless to stop them either, except to the degree that we refuse to patronize merchants that, historically, have always borne these fees as a cost of doing business. Why would we start accepting them as cardholder liable now? Especially after the pandemic encouraged payment methods that reduced contact.