Following a judge’s ruling earlier this year that the practice was anticompetitive, American Express announced that it will lift its long-standing restrictions that have prohibited merchants from steering customers to other card brands. The announcement resulted from a recent ruling, by a different court, that denied the company’s request to keep the rules in place pending its appeal.
Beginning in July, merchants that accept American Express will be able to display signs stating that they have a preferred card, or offer discounts or rebates to customers paying with other companies’ cards. According to news reports, Visa and MasterCard also could negotiate lower fees with certain merchants in exchange for the merchant agreeing to steer customers toward their cards.
AmEx is still pursuing its legal appeal, but will remove the prohibition on customer steering as the during the appeals process. Not one to wait, MasterCard already is planning to take advantage of merchants’ new flexibility, having anticipated the ruling for a while now.
According to an article in the Wall Street Journal, U.S. District Judge Nicholas Garaufis, who oversaw the AmEx case, laid out specific language that the company must use to alert merchants to the rule change. The notification also warns merchants that they aren’t permitted to disparage AmEx or mischaracterize its brand. Merchants also won’t be permitted to charge customers more for using an AmEx card, although they can offer a discount for using a card other than AmEx.