Visa and MasterCard know there is nothing that American consumers love more than fees and surcharges. That’s why the credit card companies are reportedly looking to do away with longstanding rules that prohibit merchants from adding on extra costs to customers who pay with credit.

According to the Wall Street Journal, it’s about time for the credit card networks and card issuers to settle lawsuits involving the swipe fees charged to merchants. As part of this settlement, which involves more than 50 suits filed during the last seven years, it’s possible that merchants will be allowed to tack on surcharges for customers who want to pay with plastic.

The plaintiffs — which include grocery biggies like Kroger and Safeway — allege that credit card providers have long conspired to collude on swipe fees, effectively removing any competition from the market and squeezing exorbitant fees from merchants, which they have then been forbidden from passing on to customers.

In 2011, the hotly debated Durbin Amendment to the Dodd-Frank financial reform legislation attempted to severely limit the swipe fees banks charged merchants for debit card transactions. In the end, the average fee was cut in half, but the amendment did not affect credit card transactions.

Analysts tell the Journal they expect the settlement to be reached before the case matter heads to trial in September, and could be finalized as soon as this week. Some say the most likely outcome is a cash payout to the plaintiffs, a temporary drop in swipe fees and a permanent removal of the ban on surcharges.

Could the elimination of the no-surcharge rule be a good thing?

Some argue that, by allowing merchants to tack on surcharges for credit card purchases, it would compel credit card providers to slash their swipe fees and actually compete against each other. The idea is that if the swipe fees were dropped to a more acceptable level for merchants, they wouldn’t then have to add a surcharge for credit card customers.

Credit card surcharges are illegal in New York, California and eight other states. It seems unlikely that this civil settlement will have any affect on existing laws.

Even though American Express and Discover are not part of this lawsuit, consumers with those cards will still be impacted. Neither company expressly forbids surcharges, but they both have rules stating that merchants can only charge fees for using AmEx and Discover cards if they are charging the same fees for all other cards they accept. So if a merchant begins tacking on Visa and MasterCard surcharges, the merchant would then be allowed to do so for AmEx and Discover.

Price of Plastic Going Up? Merchants May Get Surcharge Rights [Wall Street Journal]

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