The U.S. Justice Department has come to an agreement with Visa and MasterCard which will allow merchants to offer discounts and information that will better allow consumers to decide the most cost effective form of payment.   This results from an antitrust lawsuit that alleges certain antitrust law violations from Visa, MasterCard, and American Express.  The government claims the three companies had set up regulations that inhibit merchants from communicating to customers the cost of using certain payment card.  Although the Justice Department has come to an agreement with Visa and MasterCard, American Express is still being pursued against.

The legal actions stems from a long struggle between merchants and credit card providers in regards to interchange fees.  Interchange fees are paid every time a merchant accepts a credit or debit card.  The fee can range from 1 to 3 percent per transaction and costs merchants about $35 billion annually. 

The Justice Department suggests MasterCard, Visa, and American Express had established rules prohibiting merchants from rewarding consumers with an incentive when paying cash or using a credit card with lower interchange fees.  Christine Varney, assistant attorney general in charge of the Justice Department's antitrust division said, "these restrictive rules restrain competition among credit card networks for merchant acceptance and distort the competitive process."

When the settlement with MasterCard and Visa is approved by the court, merchants will immediately be allowed to do certain things.  Merchants can tell customers which credit cards they prefer and promote a particular credit card network.  They may also communicate to customers the cost of using a particular credit card network.  More importantly, stores may now offer discounts, rebates, or other incentives based on the type of credit card they use.  "We want to put more money in consumers' pockets, and by eliminating credit card companies' anticompetitive rules, we will accomplish that," commented Attorney General Eric Holder.