American Express restrictions to be lifted, merchants may take advantage of newfound flexibility

Credit card giant American Express has been ordered by a federal judge to cease restrictions on businesses that accept its cards. The judge ruled such restrictions were anti-competitve, according to a report by The Wall Street Journal.

American Express, holds a larger fee to business owners than other cards such as Visa. In order to maintain their higher fees, American Express has prohibited businesses that accept American Express from promoting competitors’ cards or charging customers using American Express cards additional fees. These prohibitions have kept consumers using their American Express cards and it has been costing businesses more than if they could suggest that their customers use a different form of payment.

But thanks to the court ruling, starting in July 2015, merchants who accept American Express will be allowed to suggest their preferred method of payment to their customers, they may also offer discounts to customers paying with Visa or MasterCard, rather than American Express; however, merchants will not be allowed to charge additional fees to customers using American Express.

This new flexibility for merchants that accept American Express may save them money in the long run, and it may be beneficial to the other credit-card companies.