Visa, Mastercard Reach $6.2 Billion Settlement on Swipe Fee Class Action Suit
Visa, Mastercard and other financial institutions have reached a $6.2 billion settlement in a longstanding class action suit regarding merchant swipe fees. The companies previously agreed to a $7.25 billion settlement, but that was overturned by the Supreme Court.
Credit card issuers, including JPMorgan Chase, Citigroup and Bank of America, have already paid $5.3 billion to retailers, but they have agreed to pay an additional $900 million. This settlement will require the court’s approval.
This ongoing lawsuit accuses credit card companies of violating federal antitrust laws. Retailers are required to pay swipe fees any time a customer pays with a debit or credit card, but merchants are prohibited from encouraging customers to use alternative payment methods.
Amazon, Walmart, Starbucks and Target were among the retailers pushing against the earlier statement. They argued that accepting the settlement would prevent them from suing Visa and Mastercard in the future, and not keep the swipe fees from rising. Mallory Duncan, Senior Vice President of the National Retail Federation, said at that time, “This alleged ‘settlement’ was a backroom deal that would have done nothing to end price fixing or keep swipe fees from soaring in the future.”
The swipe fees lawsuit began in 2005 and involved approximately 12 million retailers throughout the United States. Since that time, 8,000 retailers have dropped out.