The opposite of what's being alleged. From TFA:

Broadly, the interlocking restraints set and maintained by the defendants have forced merchants that accept any Visa and Mastercard credit card to accept all such cards, regardless of cost, thereby eliminating any incentive for issuing banks to compete by lowering their fees, the suit says. The lawsuit claims the challenged restraints have also prevented merchants from being able to steer customers to lower-cost payment options—for instance, by surcharging based on a customer’s use of a particular card. These and other restraints have prevented competition among issuing banks and other credit card networks, allowing the financial giants to raise their fees every year “without consequence,” the case alleges.

I don't think the intent is really to break up Visa and Mastercard, but to allow merchants to accurately pass through their variable costs.

If merchant fees are < 1% if I use debit and ~ 4% if I use a rewards card, but merchant rules (set by the networks and enforced by the acquiring banks) say they can't accept amex and surcharge rewards cards but not debit cards, they can't reduce their costs by pushing me towards debit cards or non-rewards cards.

There's some other things they're challenging that could allow for more competition.

Removing the 'No-Bypass Rules' could allow for lower cost clearing if the acquiring bank is the same as the issuing bank and the potential for lower cost clearing when the the acquiring and issuing banks have a clearing relationship outside of the major networks.

Removing the 'No-Competing-Marks Rules' could allow for a card to be Visa + some upstart lower cost network; if the merchant supports it, great, if not, they can still process payment through Visa. I think US law requires ATM cards to be usable through at least two distinct networks, and there's at least some diversity in ATM networks as a result.

A lot of small restaurants are cash-only because of all this nonsense.

A friend of mine owns a restaurant that is pretty remote so lower business. He told me he doesn't take credit cards because he would be paying them a percentage for everything.

It is kind of like the mafia to a small guy like him.

I think he does do a few phone apps.

A waitress at another cash-only restaurant told me, worse than customers who hear they won't take credit cards are the apple pay folks. "They really get annoyed when they don't get their apple pay"

Franchises don't care. They can raise prices monthly or even dynamic price if they want to.

Kind of sucks for society because lots of the best/greatest restaurants are not franchises.

Legislation to cap fees.

The European Union caps consumer card interchange fees at 0.2% for debit cards and 0.3% for credit cards

https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...

um, the same system we have today but with less rent extraction

and don't pretend like it's not possible, it's obviously possible: take the system and lower the fee to something proportional to the price of providing the service

if credit card rewards programs have to go to make it economically viable -- awesome, that would be a second win.

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I totally agree. I propose the opposite of what this lawsuit is fighting: let's merge Visa and Mastercard. Throw in AmEx while you're at it. Since the concepts of competition, interoperability and standards are too foreign to people and having too many types of payment processors is confusing, we need to have a single payment processor. That way we can grumble at only a single party when they jack up processing fees for editing database rows or straight up debank us. Efficiency!

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