Credit Card Use at Checkout to Become More Complex – WSJ
The credit card payment process is set to become more complex following a recent settlement between Visa, Mastercard, and U.S. merchants. This agreement could lead to tiered pricing at checkout, where the total cost of a purchase may vary based on the type of credit card used.
Impact of the Settlement
Merchants may now charge customers different amounts depending on their chosen payment method. For instance, a customer might pay $5 for a latte with one credit card but $5.25 if they use another. This pricing strategy would provide businesses greater flexibility in managing interchange fees.
Understanding Interchange Fees
- Interchange fees are charges imposed by banks on merchants for debit and credit card transactions.
- These fees have been a contentious issue for over two decades, leading to extensive antitrust litigation.
- The recent settlement marks a significant shift in how these fees are handled.
Future of Credit Card Payments
As businesses adjust to this new pricing model, consumers should be prepared for variations in checkout costs. Different credit cards might influence purchase totals more significantly than before. Shoppers will need to consider which card to use based on potential savings at the register.
In conclusion, the tiered pricing model stemming from the Visa and Mastercard settlement indicates a new era for credit card use at checkout. This change could impact consumer behavior and reshape payment strategies for merchants across the country.
