Visa, MasterCard and other banks have agreed to pay more than $7 billion to settle an antitrust case brought on behalf of retailers. Is this settlement good for your business?
Every time you use your credit card, a percentage-based fee is created. This percentage varies based on the amount of the purchase and the type of credit card. For the retailer, determining the fee is wildly unpredictable. On average, the fees vary from 1% to 3% of the transaction amount.
Under the proposed settlement (awaiting judicial approval) credit card companies have agreed to reduce swipe fees for eight months in addition to the settlement mentioned above. The settlement would also allow retailers to charge a surcharge to consumers that pay with a credit card.
There are strong proponents on both sides of this scenario. Some retailers are thrilled that card fees will be “reasonable and proportional” and that they will be able to pass on a surcharge to their credit card customers. Others believe this settlement does nothing to reduce the “legal monopoly” the credit card processors have and does nothing to reduce fees long-term.
If you are not sure how the processing fees that your company pays compares to others in your industry, you might consider reaching out to an expert. Just as an accountant can legally reduce your tax burden, Silverback can legally reduce your credit card processing fees.