MESSAGE
| DATE | 2025-11-13 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] Credit Card wars
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Aside from the corruption that is driving costs up in healthcare, there
is also a war going on with creditcard fees that are changed with
frequent flyer and rewards programs, which seems increasingly bleak for
common merchants. The cards simply bribe users to use their cards.
Again, this would be illegal kickbacks in any other business -
https://www.theyeshivaworld.com/news/general/2471261/have-a-chase-sapphire-reserve-new-proposed-settlement-could-let-merchants-reject-your-credit-card.html
Have A Chase Sapphire Reserve? New Proposed Settlement Could Let
Merchants Reject Your Credit Card
November 12, 2025
9:00 pm
No Comments
FILE - In this Feb. 20, 2019, file photo are Mastercard and Visa credit
cards in Zelienople, Pa. (AP Photo/Keith Srakocic, File)
Visa and Mastercard have proposed a settlement in their long-running
legal dispute with merchants and retailers over how much they charge
merchants to accept their cards.
The most important part of the settlement could directly impact how
customers use their Visa- and Mastercard-issued credit cards, and may
result in some consumers getting denied at the point-of-sale for purchases.
Visa and Mastercard have been in litigation with a class-action group of
merchants for nearly 20 years over the costs they impose on merchants to
use their payment networks, known as interchange. A previous settlement
was rejected by the judge overseeing the case last this year, requiring
Visa and Mastercard’s lawyers to go back to the drawing board on the
scope and size of the settlement.
The new part of the settlement announced Monday addresses the “honor all
cards” rule, a cornerstone of how credit and debit cards work in the U.S.
The “honor all cards” rule states that if a merchant accepts Visa or
Mastercard as a form of payment, they are required to accept all
iterations of Visa and Mastercard products, regardless of who issues it
and the cost to the merchant.
That has led to consternation among merchants over the years because
rewards-heavy credit cards, like the Chase Sapphire Reserve or Citi
Strata Elite, use a premium version of a Visa or Mastercard. For the
Sapphire Reserve, Chase uses the Visa Infinite card, and for a card like
Strata Elite, it’s issued as a World Elite Mastercard. These cards have
gotten far more popular in the last decade.
Both a Visa Infinite and World Elite Mastercard cost more for a merchant
to accept. The amount of additional interchange a merchant will pay
varies on size and industry, but one example is the Visa Infinite, which
can be 15 basis points (0.15%) more expensive than a Visa Signature (a
mid-tier credit card) for a merchant to accept.
Under the proposed settlement, merchants could discriminate between the
different tiers of Visa and Mastercard products, meaning high-reward
credit card users may be declined at checkout if the merchant has opted
out of accepting the higher-tier card. A merchant may also be able to
pass along the higher cost to accept the rewards cards to the customer
in the form of a surcharge on their bill, under the proposed settlement.
This will place merchants in the position of making a choice: accept all
cards with the higher fees or reject some of the higher-fee cards and
likely upset wealthier consumers who typically enjoy earning points on
routine purchases.
Like the previous settlement last year, merchants would receive a
temporary reduction on swipe fees for a few years. In this settlement it
would be a 10 basis point reduction in swipe fees for five years, and
standard credit card transactions would be processed at 1.25% of the
purchase price for eight years.
When the settlement was announced on Monday, the major merchant and
retail lobby groups came out in opposition, so it’s not certain whether
this settlement will ultimately be the one that is finalized. Merchants
and lobbyists have been pushing for years to get Congress to regulate
interchange fees, as they do with debit cards. The merchant groups say
this settlement does not go far enough.
“Once again, this proposal is all window dressing and no substance. The
reduction in swipe fees doesn’t begin to go far enough, and the change
in the honor-all-cards rule would accomplish nothing. If the courts
can’t fix this, it’s time for Congress to take action,” said Stephanie
Martz, chief administrative officer and general counsel for the National
Retail Federation, in a statement.
The payment networks, who are ready to put the matter behind them after
two decades of litigation, say this may be the best solution for the
merchants to potentially avoid a drawn out trial-and-appeal process.
“We believe that this is the best resolution for all parties, delivering
the clarity, flexibility and consumer protections that were sought in
this effort,” a Mastercard company spokesperson said.
The settlement involves Visa and Mastercard only. American Express,
which uses a closed-loop system where it’s both the issuing bank and
payment network for their cards, is not involved in this ongoing
litigation. The settlement also does not impact debit cards.
(AP)
--
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
http://www.mrbrklyn.com
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
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Being so tracked is for FARM ANIMALS and extermination camps,
but incompatible with living as a free human being. -RI Safir 2013
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