Supreme Court Credit Card Ruling a Win For Consumers

NEW YORK – The U.S. Supreme Court struck a blow for the free market and consumer choice. The Justices today denied an appeal by Visa and MasterCard that prevented most U.S. financial institutions from doing business with competing networks such as Discover.

“I think this will be as transformational as deregulation was for the airline industry and the breakup of AT&T into the Baby Bells,” said Roger Hochschild, president and chief operating officer of Discover Financial Services in Riverwoods, Ill. “For the first time, we will have true competition in the credit and debit markets. The changes will be far reaching.”

Savvy consumers don’t care whose plastic they carry in their wallet because they’re after the best deal. It’s hard to imagine anyone being loyal to a credit or debit card if a competitor offers improved service and convenience while tossing in a better price.

Prior to the court’s ruling, banks couldn’t issue Discover cards without giving up membership in the Visa and MasterCard networks. The president of any bank doing so would have been filleted by shareholders because those cards dominate the market.

Discover, a unit of Morgan Stanley, has the newest network and says that will translate into new services at better prices. Visa and MasterCard will be forced to answer. This will benefit consumers, merchants and banks.

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