Swipe a little more, pay a little less?

Visa and MasterCard have settled a Class action lawsuit that will Pencil out to about $30 billion for US merchants.  

According to cnn.com,
“The settlement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, nothing is considered finalized until it receives approval from the US District Court for the Eastern District of New York. Even then, the case can also be appealed in what could be a lengthy battle.” 

Swipe fees tend to range anywhere from 2% to 4% for US merchants. Typically, merchants pass on that expense to customers.  

cnn.com says,
“The settlement would lower those fees by at least 0.04 percentage point for a minimum of three years.” 

Here is the thing to consider. Even if swipe fees go down, does that mean that the price when you purchase something as a consumer will go down even a fraction? I may be a pessimist, but I don't think so. I don't see consumer prices going down. It would have to be a dramatic reduction in the wholesale prices for any merchant to drop the price on something that they are selling. 

The average product is not like gasoline. As much as we want it to It really does not radically go up and down based on market prices. Speaking of gasoline, did you ever notice that When "market pressures" on the price of gasoline occur it goes up immediately? But it goes down, it will go down very, very slowly. (Maybe it's just me.) 

I was just talking with somebody the other day about bait and switch tactics for selling gasoline when you're out on the road somewhere. A gas station will advertise a low price for gas and then when it turns out that you're using a card, they say ohh, that's the cash price. 

Sorry, I got off on a tangent there. 

Ultimately, I think this is good news for the merchant. It's too early to say if it will be good for the consumer.

This isn't all going to happen right away. The settlement still must be certified by another court, and there's still the possibility of appeal. (Yay. The American judicial system at its best.) 

 Visa and Mastercard agreed to $30 billion settlement that will lower merchant fees | CNN Business