Merchants may begin offering discounts to some credit card users

Merchants may begin offering discounts to some credit card users Interchange fees, which credit networks charge for everything bought with a credit or debit card, were recently the subject of a settlement between the Department of Justice and both Visa and MasterCard, according to a report in the Seattle Business Journal. These charges typically run between 2 and3 percent of a purchase price.

But under the terms of the settlement, these two credit networks will have to offer a low-fee card to consumers, which would carry an interchange fee of just 1.5 percent, the report said. While this card wouldn't carry any rewards programs, a number of major retailers are now considering offering people who use these cards discounts on their purchases.

Their incentive to do so is obvious, the report noted. Interchange fees of 2 to 3 percent on all purchases may seem like a relatively insignificant amount, but it costs the industry billions every year.

"It doesn't sound like much," Craig Shearman, vice president of public relations for the National Retail Federation, told the news source. "But it adds up – $48 billion between the two each year is collected by credit card companies."

However, some industry experts warn that it may be difficult for retailers to distinguish between the low-fee cards and normal ones, as the new pieces of plastic will carry no identifying marking. Because of this, most store employees won't know to enact the discount on their own, and it will be difficult for their payment processing systems to do anything to add the discounts after a card has been swiped.

Prior to the settlement being reached between the government and these networks, lenders often made businesses that accepted credit card payments enter into contracts saying they would not offer discounts to those who used forms of payment other than credit cards. Under the new rules, that will be allowed, the report said.

American Express was also sued by the Department of Justice, but rather than settle, it has decided to fight the suit.