NEW YORK — Visa, MasterCard and card-issuing banks have agreed to pay an estimated $7.25 billion to retailers to settle charges that they conspired to fix interchange fees.
The card companies also agreed to new rules that attorneys for the retailers said would “enable merchants to put pressure on Visa and MasterCard to limit or reduce interchange fees, among other things.”
“The modification of these network rules will provide additional value to merchants of many billions of dollars by enabling merchants to provide greater transparency to consumers regarding the cost of using various types of payment methods, and permitting merchants to negotiate collectively over interchange fees and other aspects of their relationships with Visa and MasterCard,” said law firm Robins, Kaplan, Miller & Ciresi, one of three firms representing merchants in the case.
Arlington, Va.-based National Grocers Association, a plaintiff in the suit, said it intends to review the settlement agreement. “While we have knowledge of the framework of the settlement, we have not seen the final language or had a chance to assess its impact on our members," NGA said in a statement.
NGA said its staff, executive committee and directors would begin "a thorough review process of the settlement agreement to determine whether or not the association will be in support."
The case, filed in 2005, was set for trial in September. However, under terms of the settlement, the defendants have agreed to pay $6.05 billion to retailers who accept credit and debit cards and provide another estimated $1.2 billion in value through a temporary reduction in interchange fees.
The Electronic Payments Coalition, which represents card issuers, said in a statement, “The long political conflict over interchange fees is finally over, settled by a well-established legal process, which brought together retailers and the card industry for a negotiated resolution. After years of mediation, dozens of meetings, and millions of pages of evidence, the parties involved have willingly agreed to settle their dispute.”
The EPC went on to criticize the retailer-backed Durbin Amendment, which through financial reform legislation has placed a cap on debit-card interchange fees. “The legal process [on the lawsuit settlement] worked and should send a signal to Congress that it is wrong to pick winners and losers in a complex dispute between two industries,” the group stated.
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