The New York Times has an article describing the anti-trust lawsuit between Mastercard and American Express. Mastercard was found to be too successful on the order of $1.8 billion. Thats right. Mastercard was too good at what it was doing for its consumers, providing low rates to use its network to vendors like restaurants and merchants, and pairing well with banks to offer low interest rates. On the other hand, American Express offers high rates of use and doesn’t pair with any bank outside of itself, and is losing money hand over fist. Thanks for redistributing wealth from a company that earned it to a company to dumb to read the writing on the wall.
If you know any merchants accepting credit cards, you may know why American Express is not accepted everywhere like Visa and Mastercard. Now, Mastercard, responsible to their share holders, must make up that government imposed loss. Can anyone guess how? Can anyone guess how long American Express will last with the majority of its profits coming from anti-trust lawsuits?
From the article:
The announcement early Wednesday comes more than three years after the Supreme Court ruled that Visa and MasterCard had violated antitrust rules by barring their member banks from offering credit cards that could be used on rival payment networks.
If those member banks wanted to use American Express or Discover networks, they were welcome to walk away from their Visa and Mastercard accounts. Why do you think they did not? Because they are better networks, more widely accepted due to Visa and Mastercards merchant rates. Instead, we allow our government to push around the successful companies, the companies that will pull our economy out of the gutter (not the US government), and hand over their hard earned profits to companies that only stay in business by robbing Peter to pay Paul.