But Holder also reported that Visa and MasterCard have come to a tentative agreement on the case and filed the agreement for the court to approve.

The agreement, if approved by the court, would require the two companies to allow merchants to offer discounts, incentives and information to consumers to encourage the use of payment methods that are less costly.

"As we referenced in our previous public filings, our constructive conversations with the Department of Justice have resulted in an amicable resolution of the department's broad-based investigation that will lead to Visa making a reasonable modification to our discounting rule," said Josh Floum, general counsel for Visa. "Visa always has allowed merchants to discount for cash and PIN-debit, and extending the ability to discount by network brand is a reasonable accommodation. The settlement will not impact our ability to continue growing our business by offering innovative payments products that consumers and merchants value above any others. The settlement also gives U.S. merchants new tools to manage their acceptance costs while benefiting from the tremendous value electronic payments deliver."

Reactions to the case have been fairly predictable. Consumer and retail groups praised the Justice Department actions against the major credit card brands, but analysts are split about whether the moves will result in lower prices for consumers.

"The retail industry is very pleased that the Department of Justice is taking action against the anticompetitive practices of the big credit card companies," NRF Senior Vice President and General Counsel Mallory Duncan said. "Allowing merchants to offer a discount for lower-cost forms of payment will begin to inject competition into the credit card market, a step that the card companies have resisted for far too long. Credit cards are still going to be welcome in retail stores, but consumers are going to flock to the cards that give them the biggest discount."

"The credit card networks and their banks have gouged consumers for years," said Ed Mierzwinski, consumer program director of the U.S. Public Interest Research Group. "After all, everyone, including cash customers, pays more at the store and more at the pump due to their nonnegotiable fees and unfair rules imposed on merchants. This action is long overdue. It will finally open competition in the card payment market, ultimately leading to lower prices to consumers."

But American Express, the company that has not settled the case and vows to fight it, challenged the notion that merchants would pass any savings from lower interchange on to consumers and suggested that it lacked the market power to be truly anticompetitive.

But card industry analysts argued that market power was irrelevant when considering whether a brand could prevent a merchant from urging consumers to use another card, and several have appeared in the press predicting darker days ahead for American Express. Several have cut their earnings projections and share price forecasts for the brand as well.

Analysts argued that American Express, of the three brands targeted, had the most to lose from the suit and could not have afforded to join Visa and MasterCard in the settlement. Currently, on average, American Express has some of the highest if not the highest interchange rates of all the card brands and therefore would have the most to lose if merchants were allowed to ask consumers to use another card. In addition, the card brand only issues charge cards and credit cards and does not have a lower-cost debit card that could serve as a way American Express could still capture some interchange from the transaction.

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