American Express processing trial begins

The battle over credit card processing fees has heated up in recent years and it could be coming to a head this week as American Express is has started its trial against the U.S. government and 17 states that are claiming the company is stifling competition from other credit card companies that charge lower processing fees.

According to an article from Time Money, the case alleges that American Express is preventing merchants from offering discounts and other incentives to patrons that pay with means other than American Express which includes cash, check and other credit cards.

Businesses do this because American Express charges higher processing fees than its competition. The hope is that it will spur competition among card providers by lowering fees across the board.

On the other side, American Express says its rules protect customers from "price discrimination." The business makes up 26 percent of the market in terms of consumer spending and claims that it is not large enough to affect competition.

The trial has just kicked off and is the culmination of journey that started in 2010 when the initial charges were brought against American Express, Visa and MasterCard. While the final two settled back then, American Express held off. It is believed that the trial could last as several months.

The outcome of this trial is something that every merchant should be paying attention to. It could lead to a lowering of POS card processing fees. This is something that every organization has been struggling with and will effect how they do business.

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