Discover just got a huge victory heading into a potential difficult year of declining credit card use. Late Monday, Mastercard and Visa settled with Discover for up to $2.75 Billion over an antitrust lawsuit filed in 2004. Mastercard will pay Discover nearly $900 Million in 4Q of 2008, while Visa will pay Discover around $500 Million quarterly in 2009.
American Express received a larger settlement in the pas year for more than $4 Billion from Mastercard and Visa based on a similar lawsuit. In each suit, American Express and Discover claimed with the Department of Justice that Visa and Mastercard prevented banks from issuing debit or credit cards under the Amex and Discover networks, thereby violating antitrust laws.