A New York court has granted preliminary approval to a settlement between American Express and US merchants over transaction fees.

 

The retailers say this settlement is similar to a multibillion dollar agreement with Visa and MasterCard.

 

US District Judge Nicholas Garaufis, made the ruling on 7 February and scheduled a hearing on final approval on 17 September.

 

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The ruling allows shops to encourage customers to use debit cards rather than credit cards to make payments.

 

In December 2013, a settlement saw Visa and MasterCard agreeing to let businesses add surcharges to credit-card transactions.

 

This so-called "swipe fee" has been seen as a way to steer customers away from using credit cards, which are costlier for merchants to process.

 

These surcharges could only be used if American Express permitted the practice as well.

 

The Visa and MasterCard settlement included also a payment of $5.7bn in damages to the retailers, while settlement damages have not been awarded in the American Express settlement.

 

Credit-card users may experience rising costs in their transactions, as long as American Express compels merchants to charge customers the same amount on credit and debit cards.

 

According to the retailers, many large corporations require executives to use American Express to be reimbursed for business expenses, increasing the card company’s leverage.

 

 

 

 

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