New Law Reduces Merchants' Fees For Accepting Credit Cards
CHICAGO (CBS) -- Merchants, and possibly consumers, are going to be getting a break when they break out the plastic where they shop.
As WBBM Newsradio's John Cody reports, the new federal, effective Saturday, drops from 44 cents down to 24 cents the amount that MasterCard and Visa can charge merchants for processing their credit cards.
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The law also gives merchants more power to set their fees for accepting credit cards. Doing so will "let people know that there's basically a cash discount if folks don't want to use a plastic card," said U.S. Sen. Dick Durbin (D-Ill.), who wrote the bill.
Durbin says the bill also allows merchants to set a minimum purchase before they'll accept credit cards.
It allows for a minimum of "$10 for people who want to use these cards, if they wish," he said. "It's a retailer's decision."
Many businesses already set such minimums.
Merchants are glad for the change. Art Potash, the owner of Potash Brothers supermarkets on the Near North Side, said his Visa and MasterCard swipe fees have risen to 44 cents, which is tough in his grocery business with 2 percent profit margins.
"At Potash Markets, the fees for accepting credit and debit cards have grown to the point where they now exceed net profits," he said.
Banks behind Visa and MasterCard say they will have to raise other banking fees to compensate, but Durbin said the banks would have done so anyway.
