After years of wrangling, credit card networks Visa and Mastercard reached a settlement with retailers over fees.
The dispute was over what are called swipe or interchange fees -- the percentage of each sale retailers must pay for accepting the cards..
Visa and Mastercard set the fees and get a cut, but most of that cash flows to the banks that issue the cards. And those banks make a lot of money off those fees -- about $100 billion last year, according to a report by Bloomberg News. But retailers have long complained the fees were too high.
The deal will reduce interchange fees and set a cap on the percentage levied.
The settlement covers about 90% of U.S. merchants, large and small, that accept credit cards and is predicted to save them at least $30 billion over the next five years, according to a report from Bloomberg.
But will any of those savings flow down to customers?
Maybe -- and maybe not.
Cards, even from the same bank, have varying interchange fees. A premium card with a lot of perks my charge a higher fee than a bare-bones card with no airline miles or cash0back features. The deal also allows retailers to charge customers for using credit cards and charge even more if the card carries a higher interchange fee.
But retailers may also, at their discretion, offer a discount to customers who use cards that carry lower interchange fees.
So how will you know?
The settlement awaits court approval. After that, be sure to start checking your receipts. The ticket should tell the tale -- and tell you whether you're paying more or less at the checkout for the convenience of using plastic.
And maybe whether or not you should look for another store.