American Express recently announced that a federal judge’s decision to approve a settlement of antitrust charges against Visa and MasterCard will create less competition among credit card issuers.
All three issuers were sued by the U.S. government and several states for their anti-steering rules. These rules prohibit retailers from offering customers lower cost payment options and prohibited retailers from telling customers about the transactions fees charged to the retailer in order to accept credit cards, the Wall Street Journal reports.
Visa and MasterCard agreed to settlement terms that allow retailers to offer discounts if consumers use alternate forms of payment, including other credit cards that charge lower merchant fees or cash.
American Express was not involved in the settlement and said U.S. District Judge Nicholas G. Garufis’s decision will allow Visa and MasterCard to “pay merchants to discriminate against American Express,” ConsumerAffairs.com reports.
Garufis said the court received “overwhelmingly positive if not enthusiastic” comments of support of the settlement, according to ConsumerAffairs.com.
"MasterCard is pleased that the court has approved the settlement," a spokesman for the credit card processor said, the Wall Street Journal reports. "The terms of the settlement are consistent with the company's long-standing business practices, which have permitted merchants to offer a discount for cash and all forms of payment including competing card brands.”