Home / Credit News / Judge could create credit card fee limit in 2012

A court ruling later this year could have a dramatic impact on the amount payment processors and banks are allowed to charge businesses for accepting credit card transactions.

The case, a private suit between about 5 million businesses and Visa, MasterCard and 13 large banks, is related to the amount that companies pay for accepting a credit card purchase, and is slated to begin in September 2012, according to a report from CNBC. Analysts say that whatever happens, the credit card landscape could change considerably.

Financial giants may choose to settle for what some estimate could be as much as hundreds of billions of dollars, the report said. Or the judge may impose a rule that limits the amount businesses pay in credit card transaction fees to as little as 0.5 percent of the purchase price, instead of the current average of about 2 percent. That's equal to the current interchange fee cap imposed in Australia, but higher than the European Union's limit of just 0.3 percent of a total transaction value.

That change would be enforced in addition to the current limits on debit card fees imposed by the Durbin Amendment to the Dodd-Frank Act, which were put into place in July 2011, the report said. Visa and MasterCard have argued that this rule is what led to a spike in credit card transaction fees, as they had to make up revenues lost to the heavier regulation.

Businesses say that higher transaction fees are typically passed on to consumers - for those who use credit and debit to make purchases as well those who use cash - in the form of higher prices, which may mean that prices could drop if the new limits are imposed.