Another interchange fee fight in the offing. This time over credit card, and in the courts instead of in Congress. According to MoneyLand and CNBC, analysts who cover the financial sector have expressed worry that on-going litigation involving several major banks could lead to a cap of 0.5% on credit interchange fees — one-fourth of what’s currently charged — potentially dragging down bank earnings. If that happens, consumers who are used to generous credit card rewards programs complete with double miles, accelerated earnings, and big sign-up bonuses might get a rude awakening.
The plaintiffs, which include Payless ShoeSource, the National Association of Convenience Stores, and the National Restaurant Association, among many others, argue that Visa, MasterCard and 13 large banks have illegally colluded to charge fees for credit card transactions that are far higher than an open, competitive market would dictate they should be. Estimates of the potential cost of a settlement of the antitrust case vary dramatically — from a few billion dollars into the hundreds of billions.
Read the CNBC coverage here.
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