MasterCard to Pay Its Debts Off Early

Credit cards don’t just strong-arm people; they strong-arm businesses, too. Or at least try to. Back in the day, MasterCard tried to force businesses to accept debit cards branded with MasterCard at businesses where those credit cards were accepted. Many businesses (including Wal-Mart) took umbrage, claiming that the move created, in effect, a trust situation and tied the acceptance of debit to the acceptance of credit cards. Businesses claimed MasterCard was threatening them with revocation of the ability to accept its credit cards if they did not also accept branded debit cards.

In 1996, an antitrust suit was filed. In 2003, the suit was settled, reports TheStreet.com:

The Purchase, N.Y.-based company settled the suit in June 2003 with a number of U.S. merchants that took issue with certain antitrust aspects of the payment card industry. Under the settlement, MasterCard was required to pay $125 million in 2003 and $100 million annually each December from 2004 through 2012.

Instead of paying all of that through 2012, though, MasterCard wants to pay $335 million by the end of the 3rd quarter in order to be done with the obligation early. This is a discount, since MasterCard would pay $400 million if things went forward as originally laid out. A court will have to agree before the new payment schedule can take effect.

It’s a savvy move by MasterCard. Paying off your business debts early is always a good choice.

Image source: Wikipedia