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Prior to the settlement, if a retailer wanted to accept VISA or MasterCard as payment for their goods or services, they had to also accept the card associations’ debit cards. When they did so, they faced paying an interchange rate on that transaction comparable to the rate for credit card purchases, a tariff in some cases more than five times the fee charged by EFT networks. Now, after the settlement, retailers can, if they dare, stop taking the card associations’ debit cards. Or, if they do continue to take them, they face an interchange rate that will be roughly a third lower than it had been before the settlement. Prior to the settlement, credit unions that issued the associations’ debit cards enjoyed a stream of income from their debit portfolio that more than one executive has described as a “boon,” a “cash cow” and “almost free money.” Now, after the settlement, those glory days are likely over and credit unions, along with other card issuers, will have to reevaluate the reduced returns that the debit cards offer. Prior to the settlement, card industry analysts maintained that consumers often found themselves as pawns in a struggle they didn’t understand over whether they signed their names on a receipt to validate a debit card transaction or entered a personal identification number. Now, after the settlement, card industry analysts hope that fight will have significantly diminished and consumers will be able to peacefully choose whatever payment method they want.

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