Mastercard and Visa will soon be prevented from charging the merchants same fee for all cards with same brand. An antitrust lawsuit now requires them to offer different fees for different cards, meaning cards with rewards may cost a merchant more compared to non-reward card of the same brand.

How is this likely to impact reward cards? Would their acceptance become limited, or their use more expensive for the consumer? Or merchants may just absorb the cost instead of going through the trouble of setting different price for payment by different card for the SAME merchandise?

Any thoughts from anybody, especially from businessmen?

It already works this way. A rewards card costs more than a standard Chase credit card.

Right, this is definitely the way it already is for merchants.

The hard part is knowing what you'll pay. In most cases, you can't tell what percentage you paid on any one card until after the transaction has cleared, and even then, it's pretty hard to dig through reports and get the real number.

This is why it is often said that the poor subsidize the rich in regards to cc rewards. The rich use premium cards which cost more and accrue mileage or other perks or money equivalents (or money). The poor use standard cards or debit cards which costs merchants less. But merchants average the costs.

I can't possibly see their acceptance becoming limited. Visa and Mastercard rely on the fact that if a card her their logo on it, it's accepted by all their merchants. They would never allow a merchant to have a chart showing which Visa cards they take and don't take, nor could the merchant charge different amounts based on which Visa was presented.

The only choice a merchant has is to either eat the difference or pass it along to everybody. Betting they are passing it along to everybody.

I am new to frequent travel programs and the co-branded cards. I may just be having some dumb bad luck; but what I think I'm finding is that some "financial institutions" seem to be a little more interested in issuing their own credit card, rather than a co-branded card. Ff points and miles are not essential in fulfilling my travel plans; they serve as an incentive to get me to spend more with particular merchants. Having to pay more for an item because of a co-branded card would be a negative to that incentive.

Per the link below the Merchant may now be able to steer you to a card that has a lower swipe fee. My ineterpretation (from this and other articles) is that they maybe be able to choose which card in the Visa/MC family they will accept.

http://blogs.wsj.com/law/2010/10/04/...titrust-probe/

Apparently there is a 2 pm press conference to outline the details of the agreement.

This better outlines some of the agreement.

http://www.marketwatch.com/story/vis...k=MW_news_stmp


"Visa will allow U.S. merchants to offer discounts or other incentives to steer customers to a particular form of payment including to a specific network brand or to any card product, such as a "non-reward" Visa credit card."

Apparently, that is exactly what the settlement with the Gov. is going to permit. The famous (or infamous, depending on your position) "honor all cards" rule is going to disappear.

This may mean that bonus cards will become harder to everywhere, charges to merchants will go down for bonus cards to keep them accepting the cards, annual card fees may go up on bonus cards, or some of all of the above, or something else may happen.

Right now, too early to tell, although there is some speculation that banks have so many miles to hand out that they already bought that bonuses may go up for a bit. Hence, e.g., Citi's 75 to 100K mile recent bonus offers on AA cards.

Keep tuned to FT.

I don't see anything in the articles that implies a merchant would be permitted to refuse to accept a given type of Visa or MC (i.e., rewards card)... just that they could offer discounts for using a standard card for example, rather than a rewards card... or a discount for using Visa instead of Amex. Which granted, could eventually change the landscape a bit. I'm not worried about it right now though.

I noticed the article states that Visa at least, already permited mechants to offer a discount for cash or debit - yet I can't recall any time in the past 25 years that I encountered such a discount, except at a few gas stations during the $4+ per gal days. So if few stores bothered with setting up a simple cash vs. credit discount, would that many now go to the effort of establishing a cash vs. non-rewards card vs. rewards card discounting system?

I tried hunting down some statistics on what percentage of rewards vs. non-rewards cards are issued annually. I didn't find anything definitive, but several articles stating that rewards cards make up a "majority", though without citing sources. This page on creditcards.com does cite sources but provides no links to them http://www.creditcards.com/credit-ca...76.php#Rewards In any case, such cards are a big chunk of the industry. One would hope that a clearly successful setup of rewards cards won't be gutted anytime soon.

There are several merchants around here that offer discounts for cash, most notably gas stations, though some restaurants as well.

These guys show cash prices and charge 3% flat for any card.

budsgunshop.com

Same in my town. A few restaurants write on the bill: You get a 5% rebate when paying with cash.

There is also the inverse, where in order to use a credit card you must pay a processing fee. Many colleges/universities that allow CC payments require you to pay the processing fee, as do some utility companies.

There's really no difference - it's all about the spin.

The difference is, merchants are generally required to sign agreements with merchant account providers that forbid charging fees for any payment method.

But giving a discount for a payment method is OK.

The idea is, rather than that TV costing $799 with 3% more for credit card, they'd like it to be be $799 with a potential discount. It's all about the benchmarking of the initial price. So the retailer could price the TV at $823.71, with a 3% cash discount.

And most retailers don't want to be anywhere near the word "discount" unless there's a sale - otherwise it just begs the question: "What other discounts are available?"