Fox News
Expand
Browse All Video
Watch Live

You're watching...

Mastercard, Visa reach settlement over card fees

Details

  • Description

    Settlement gives retailers ability to charge fees for using credit cards

  • Duration 5:20
  • Date

Clips

Also in this playlist...

America's News HQ

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Businesses now out of court settlement between credit card companies and retailers.

Could change the way we all use plastic.

The settlement which still has to be finalized could be worth more than seven and a quarter billion dollars.

Retailers suing big banks as well as visa and MasterCard.

Over this swipe fees that stores have to pay every time somebody uses a credit card.

But now as part of the deal source could also soon start charging you an extra fee if you want to pay with a credit card -- Harrington is founder.

Part of her partner of -- capital management he's also the radio host of the Harrington our good to see Kyle thanks very much -- -- Seven and a quarter billion dollars what are these banks and credit card companies admitting to having done.

Well here's the deal.

He then -- what's called swipe fees and interchange.

Fees that these credit card companies.

Charge the merchant and then gets passed on ultimately to the consumer.

And -- what I think -- does this settlement in this legal discussion is it shifts the competitive balance.

From the -- sons and master cards of the world to the merchant.

And to hopefully the consumer.

My -- -- is that this is a two pronged approach okay.

The merchants look like as if they're going to win here mean the small business owner which is a good thing.

Where they'll be be able to charge be charged less -- the consumer using the visa or MasterCard.

But what I wanna make sure happens here in this settlement and this is this just happened I think late yesterday when we got this new that's right what -- what I would like to see happen here is that.

If the merchant is charged less by -- -- MasterCard I want those expenses.

Pass daddy I want the consumer.

To also be charged -- -- well.

But there is actually a part of this agreement that would allow merchants.

And retailers to charge customers more who want to pay with credit cards right right I think that you know the argument from Visa Mastercard Rick is the following.

Is that.

-- believe that they can charge these fees to merchants.

Because people spend more when they use plastic whether -- Credit or debit card now.

Whether or not that's true that we can look at the numbers I believe OK yes it is true but the fees that they charge she of the visas and MasterCard it seems -- it.

As I look through this settlement that they've been egregious in nature.

This is a lot of money Kyle I mean I think.

Companies and businesses don't just hand over.

Billions and billions of dollars of you know we.

Willingly and yet admit this offer is on the table without.

A judge's order that did that raise fees have to be paid so you -- wonder if if that number seven point 25 billion if that's what it ends up being.

What else this given off the top is it something else going on here if they're willing -- put that that number through without anybody ordering them to do that.

Rick you make a very important point and I think the issue here is transparency I think that both the consumer.

The merchant want to see more transparency about exactly -- -- they are being charged.

For using their master card or their V set and so I think the discussion and the narrative.

Is a healthy discussion to provide more transparency on the issue this sounds like at the end of the day the best thing for consumers out there.

Would be to -- up these credit cards and just use cash yeah I mean you know Rick I think that that there's definitely a shift from not only using your credit card.

But using now your debit card and then people now more and more using.

Cash.

I -- and that's probably.

Not a bad idea keeps you from overspending.

Buying things that you can't afford to buy.

Carrying big balances they can have major problems for your credit rating and all that stuff I think you're right and I think we've all been.

Victims of spending more than we necessarily have by using our credit card but when you look at these.

Exorbitant credit card rates and then you get a picture in a view into some of these transaction fees that we don't even really know.

The full transparency of cash seems a lot more interest thing to use a final question about these banks and visa and MasterCard credit card folks.

You know if it -- don't they now had to figure out a new way to make some of that money back.

If they're gonna if they're gonna handout payments of over seven billion dollars to retailers -- merchants around the country.

Aren't they gonna find a way to head somehow recoup those losses Rick it's another great point and I that's idea -- said this historically I'm not some of the Fox Business shows.

That these banks are going to look for ways to monetize their losses and now in a settlement it did in fact this takes up placing gets approved by the judge.

All you bet that they're gonna look for other ways.

To try and recoup some of these expenses the judge could actually reject this deal right too many merchants.

This is a judge down in Washington I believe -- too many merchants balk at it so.

We'll see what happens as this plays out again this is a settlement that was announced just late last night in a lawsuit that's been in the works since 2005 so this is.

This is not a new suit not a new case but potentially may be we'll see some good news.

For consumers out there if they if they see some of their.

Some of their purchases come down in price a little bit.

Retailers let those those savings trickle down we'll see what happens Kyl good to see you as always Kyle is founding and managing partner of Harrington capital.

Management and you can listen to him on the radio on Harrington our take -- my friend thanks again Rick very much.

Load More