Retailers to Appeal $7.25 Billion Swipe Fee Settlement
Retailers continue to fight hard against the $7.25 billion interchange fee settlement between merchants and Visa, MasterCard and several banks.
On Tuesday, ten merchants and trade groups filed notice that they will challenge the settlement of this swipe fee price-fixing case in a federal appeals court. The deal had been tentatively approved by Judge John Gleeson in a U.S. District Court on November 9.
If the settlement is approved, it would be the largest federal antitrust settlement in U.S. history.
Retailers say the settlement prevents them from opting out of the pact, which is a violation of their rights. They are challenging a part of the order that would free Visa and MasterCard from new legal claims over related interchange issues.
Over half of the stores and trade groups that brought the proposed class action now oppose the pact, including the National Association of Convenience Stores, the National Restaurant Association, and the National Grocers Association. It is also opposed by a substantial number of merchants, including the world’s two largest retailers, Walmart and Target.
The case began in 2005 when retailers filed complaints against Visa, MasterCard and other credit card companies, accusing the issuers of collaborating to fix the interchange or swipe fees they charge merchants for accepting credit cards.
The proposed agreement was reached in July when MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anti-competitive 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 also 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.
A hearing on final approval is expected to be scheduled for sometime next year.