You've go to to love the hackernews spin on this. No more free miles, blah, blah. Do you really think the miles were actually free? Of course they are not.<p>Essentially this ruling allows retailers to pass on bank card payment fees to customers.
Previously these fees were hidden, and the retailer had to swallow the fees, and of course ultimately pass them on to ALL customers equally as a cost.<p>Now, customers themselves get to pay the fees directly, and thus have a choice, and consequences, in which payment methods to use. And of course this will likely have downward pricing pressure on the payment service providers, so in a reverse of the usual story, consumers in general will benefit at the expense of the banks.<p>This is the way free markets are supposed to work, as opposed to the current cosy backroom agreements that only benefit the banks.
Miles were never <i>free</i>. They just used to be paid for equally by everyone--including people not using credit cards! In effect, it was a sales tax imposed by Visa and Mastercard on <i>everyone</i>.<p>This change will make the price of using a credit card more transparent to the customers and will stop non-customers from subsidizing Visa et al. It's more fair and lets the market react much more efficiently to payment processors.<p>This change is a net positive for the market and therefore people in general.
If the title is accurate, this effectively means prices are going up another 3%+ on everything over the next few years. People don't usually lower prices.<p>If someone was selling a $10 pizza before and paying 60c in payment processing, he's most likely gonna charge $10.60 for the pizza now and call the 60c additional profit. I'd be very surprised if most merchants decided to keep charging customers with cards $10 and give a 60c discount to cash customers.
American Express still has a no-surcharge policy and Visa/MC got MFN clauses declared legal in the settlement, so this won't effectively change anything.
Does anyone in the payments industry know if it is possible to get the interchange rate prior to processing a transaction? I assume only the issuing bank has the information, and there is no way to get it from the number alone. Do issuing banks include the interchange category with the response when transactions happen, or is that figured out during the batch processing?<p>My point is, I think this judge can rule whatever he wants, but as far as I know, there is no way to technically implement these fees.
I imagine this is the beginning of the end of credit cards with rewards in the U.S. Unless Congress passes some relevant law (which would not surprise me).
I expect this will be used as another tool to obfuscate prices. Just like sales tax is effectively a semi-hidden last minute fee in America, I think we are going to start to see all sorts of purchasing method fees at the cash register.<p>It will start with credit cards but soon it will be for debit cards and there will eventually be a "cash handling" fee if you insist on paying with cash.<p>These will never be included in the listed prices and they will be just small enough that its not worth it for you to put the items back.
Will [could] this affect the price of paying for goods with my Visa/MasterCard debit card, i.e., will this essentially make it possible for stores to charge more for using <i>any</i> cards? This could motivate a huge swing back to carrying cash and checks. That being said (and understanding the inherent cost to merchants), won't this ruling essentially set back payments by a decade?
I'm not sure how one could actually take advantage of this. Suppose I want to make people with rewards cards pay more at my shopping card. How do I know they are using a rewards card, and if so how much that adds to my processing bill?
More details: <a href="http://www.bloomberg.com/news/2013-12-13/visa-mastercard-swipe-fee-accord-approved-by-u-s-judge.html" rel="nofollow">http://www.bloomberg.com/news/2013-12-13/visa-mastercard-swi...</a>
Finally! I've felt for a while now that rewards cards are basically a legalized form of bribery and I've avoided using them at merchants that I like.