What the Mastercard & Visa Settlement Means for LBM Dealers

In a pivotal decision on Tuesday, Mastercard and Visa agreed to settle a lawsuit brought by a group of mostly small businesses, In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. While this settlement still needs approval in federal court, many merchants are already looking forward to around $30 billion in savings on swipe fees over the next few years. LBM dealers in particular can look forward to several benefits once this settlement is implemented, including…

1. Reduced interchange or swipe fees for 5 years. Mastercard and Visa have agreed to reduce credit card swipe fees over 3 years, and to maintain a lowered swipe fee cap for 5 years. This means LBM dealers will be able to enjoy savings on credit card transaction fees, potentially saving their business tens of thousands of dollars each year alone.
2. A repeal of so-called “anti-steering” rules. In the past, merchants, including LBM dealers, were forbidden from steering customers to use cards that would cost less in swipe fees. With this new settlement, these “anti-steering” rules would be eliminated from credit card agreements. This means LBM dealers would be free to encourage customers to use credit cards that cost less on the backend, once again resulting in savings for the business owner.
3. Relaxed restrictions on surcharges. A less publicized consequence of this settlement is one that is particularly beneficial for LBM dealers: There will now be much more flexibility when it comes to surcharges, a method used by many to cover credit card swipe fees by passing it on to the customer. With these relaxed rules, LBM dealers will be able to adjust pricing more easily to recoup transaction costs.

While small businesses have long been left to struggle alone with high credit card swipe fees, this latest development promises some relief. With lower swipe fees and the loosening of anti-steering rules and surcharge regulations, small- to medium-sized LBM dealers will be able to lower their costs of doing business, passing these savings along to their customers if they choose. At BlueTape, we specialize in helping LBM dealers offer their customers an easy way to pay with our payment portal. Ready to take your business to the next level? Create a BlueTape account now or book a free meeting with one of our team members.