A potential antitrust settlement among credit card payment platform operators could clear the way for merchants to openly favor certain forms of payment. Under existing merchant agreements, retailers must avoid "steering," the practice of encouraging consumers to use one type of credit card or debit card over another.

Some retailers have already implemented moderate forms of steering, especially when using point of sale devices to gently nudge debit card holders into less expensive, PIN-based transactions. According to a Wall Street Journal report, merchants want the ability to more aggressively encourage consumers to swipe cards that require smaller interchange fees. For instance, a store could provide rebates for customers who use store affinity cards or "basic" bank credit cards instead of frequent flyer credit cards or cash back rebate cards.

An antitrust settlement would open the door to variable merchant processing fees, according to the WSJ. Instead of paying the same rate to a processing bank, regardless of credit card brand, merchants could pay percentage-based interchange fees that more closely match the cost of completing each transaction.

About the Author


Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.