Restaurants Join Growing Opposition to Swipe Fee Settlement
Another major trade association has come out against the $7.25 billion settlement between some retailers and Visa and MasterCard over the interchange fees on credit card transactions.
Today, the National Restaurant Association announced that it is opposing this settlement because it fails to “fundamentally change a broken marketplace in which swipe fees are set” and prohibits merchants from filing subsequent lawsuits over the interchange fee.
“There is concern that restaurateurs will continue to be negatively impacted by the unfair, non-transparent system that exists today,” said NRA President and Chief Executive Dawn Sweeney said in a statement.
The National Restaurant Association’s Board voted unanimously to oppose the settlement. The NRA is the leading business association for the restaurant industry, which comprises 970,000 restaurant and foodservice outlets.
The NRA joins other major trade groups, such as the National Association of Convenience Stores and the National Retail Federation, and the world’s two largest retailers, Walmart and Target, in opposing the settlement.
The proposed agreement was reached in July and still requires the approval of U.S. District Judge John Gleeson in Brooklyn, New York. A hearing has not been set. If approved, it would become the largest class action settlement in history. MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anticompetitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion.
The settlement would allow retailers to charge higher prices to their customers for paying with credit cards. Before this settlement, the card companies prohibited retailers from adding this type of surcharge.