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The settlement between merchants and credit card firms isn't only a win for merchants, as...
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Monday, July 16, 2012, 2:13 PM ETThe settlement between merchants and credit card firms isn't only a win for merchants, as Deutsche Bank's Bryan Keane argues it's also time for investors to "aggressively buy" Visa (V +2%) and MasterCard (MA +2%): "The agreement does nothing to increase competition (e.g., freedom of routing) or damage the networks’ dominant positions... a big risk [is] removed."
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This is a lose-lose settlement. Smarter customers will refuse to get gouged the extra fees and simply resort to cash, check or debit cards. The interest-free, month-long loan was nice but not required since either way the purchase needs to be paid for.
And because consumers are paying up-front they will be more conscious of how much they're spending which means they'll spend less. Thus, there will be less use of credit cards and fewer goods will be sold.
In addition, several states have laws on the books outlawing surcharges on customers who use CCs so this whole agreement may be dead in the water when it comes time to implement it.
fees fees fees, taxes taxes taxes