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Non-Tech : Binary Hodgepodge -- Ignore unavailable to you. Want to Upgrade?

To: ~digs who wrote (283)	10/10/2001 9:35:06 PM
From: ~digs	Read Replies (1) \| Respond to of 6763

Consumers to benefit from Visa, Mastercard ruling By F. Brinley Bruton ; Wednesday.. October 10, 4:31 pm Eastern Time NEW YORK, Oct 10 (Reuters) - A courtroom victory for financial heavyweights American Express Co. (NYSE:AXP - news) and Morgan Stanley (NYSE:MWD - news) could turn into a storefront triumph for consumers. Consumers eventually should reap the rewards of increased competition after a federal court decision on Tuesday forced U.S. credit card networks Visa U.S.A. and MasterCard to allow member banks to issue rival cards, consumer advocates said on Wednesday. ``This is a victory,'' said Frank Torres, legislative counsel for Consumers Union, a nationwide consumer advocacy group. Consumers will see greater competition in the marketplace, and hopefully lower prices and interest rates as banks can now offer a whole panoply of other debit and credit cards and not have to rely on the Visa and MasterCard network, he said. The ruling will allow banks that are members of the MasterCard and Visa networks to issue cards of competitor firms American Express and Discover, among others, who have so far had to maintain their own separate and distinct payment networks. The decision should benefit not only American Express and The Discover Card, owned by Morgan Stanley, he said. Many new cards would also get the chance to enter the market with greater savings, rewards programs, lower fees, and no over-limit charges, among other benefits, Torres said. The presence of these newcomers at establishments where they were often barred should also end up cutting costs for merchants. Merchants now pay about $1 on credit card fees for every $50 purchase, estimated Ed Mierzwinski, a consumer advocate. And more competing cards will eventually mean more and better deals for consumers to choose from, advocates said. NOT A COMPLETE VICTORY While the ruling is not likely to cut shopping costs for consumers immediately, it will doubtless trickle down to them eventually, Mierzwinski said. ``Costs should decline because the anti-competitive practices have been keeping costs artificially high,'' he said. Visa and MasterCard control more than 75 percent of U.S. credit card sales. The U.S. government sued them in 1998, accusing them of breaking antitrust law, saying they colluded to stifle innovation and did not truly compete with each other. On the downside for shoppers, advocates warned that there was no guarantee that merchants would immediately pass on any savings. The benefits for American Express, recently dogged by the economy's downturn and losing the use of its headquarters in the World Financial Center, may not be apparent right away, an analyst said. ``The ruling should make it easier for American Express to talk to banks about issuing debit cards across the American Express network,'' said John McDonald with UBS Warburg. But it is not clear that American Express has the technology to support debit card usage across their network yet, he said. The ruling was not a complete victory for American Express and Morgan Stanley. Judge Barbara Jones said the credit card networks did not have to change their governance structure, as some had feared. The networks are owned by major banks that can have significant interests in both of them, policy the government has said hindered competition. biz.yahoo.com