The credit card companies will have to either renegotiate the deal with merchants or go to trial.
A federal judge on Tuesday rejected a $30 billion settlement that would have capped the fees Visa and Mastercard charge to merchants for credit and debit card purchases. The decision jeopardizes an agreement reached in March that was meant to end two decades of litigation related to swipe fees, which card companies charge retailers on each purchase a customer makes.
that she was “not likely” to grant approval to the final settlement and rejected a request for preliminary settlement approval. Brodie ordered the plaintiffs to confer and respond to the ruling by Friday.Advertisement Visa and Mastercard expressed disappointment with the judge’s decision. The settlement presented a “fair resolution” to the 19-year dispute, Mastercard spokesperson Will O’Connor said. Visa similarly called the settlement an “appropriate resolution” that resulted from “lengthy and thoughtful discussions” with merchants, company spokesperson Fletcher Cook said. Retailers typically pay between 1.5 and 3 percent in swipe fees on every customer transaction to credit card companies. The settlement would have required the average swipe fee to fall by at least 0.04 percentage points for three years and remain at least 0.07 percentage points below the current average for five years. The settlement also would have prevented credit card companies from increasing swipe fees until 2030. Businesses, for their part, would have been able to impose surcharges based on the Visa or Mastercard card customers used and direct them to cheaper payment methods.The settlement arose from a 2005 antitrust class-action lawsuit against Visa, Mastercard and multiple U.S. banks that alleged that merchants paid excessive fees to accept credit and debit payments from the card companies. Merchants claimed the banks engaged in de facto price fixing when setting those fees — and some opposed the settlement on grounds that the deal would leave fees too high and provide only short-term relief for businesses.The settlement opened the door for credit-card companies to either increase other fees for merchants to make up for lost revenue or wait until the settlement’s timeline expired to hike them again, said Stephanie Martz, the chief administrative officer and general counsel for the National Retail Federation, a trade group for retailers.“We didn’t think it accomplished anything,” Martz said. “It’s up to Visa and Mastercard now. If they want to come back and really address the problems that we have identified for the last 20 years, we are absolutely open to it. But if not, we’ll see them at trial.” The judge’s rejection of the settlement is recognition that it “didn’t come close” to addressing the issues between card companies and merchants, said Doug Kantor, general counsel at the National Association of Convenience Stores, another retailer trade group. “Visa and Mastercard organize all the banks that issue their cards into cartels and they set the prices for those cartels in an all-or-nothing situation, and that has effects for the economy, for Main Street businesses and for consumers,” Kantor said. “The judge recognized that this settlement doesn’t actually touch any of those problems.”
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
XRP Skyrockets 30% in Volume as $30 Billion Market Cap NearsXRP's trading volume surges by 30%, nearing major $30 billion market cap mark
Read more »
Judge rejects Visa, Mastercard $30B settlement over controversial swipe feesThe settlement announced in March was intended to resolve most litigation that began in 2005 over so-called swipe fees, also known as interchange fees, that merchants pay to accept Visa and Masterc…
Read more »
Visa, Mastercard $30 billion swipe-fee deal blocked by judgeA federal judge said earlier this month that nothing she heard had changed her mind that the settlement should be approved.
Read more »
Visa, Mastercard $30 billion swipe fee settlement rejected by US judgeVisa, Mastercard $30 billion swipe fee settlement rejected by US judge
Read more »
Federal judge rejects $30B settlement between Visa, Mastercard and retailersA federal judge overseeing a $30 billion settlement between Mastercard, Visa and retailers rejected the deal Tuesday. The ruling likely means the credit card processors will have to make more concessions to resolve their long-standing dispute with merchants.
Read more »
Federal judge rejects $30 billion settlement between Visa, Mastercard and retailersA federal judge overseeing a $30 billion preliminary swipe-fees settlement between Mastercard, Visa and retailers formally rejected the deal Tuesday. The ruling likely means the credit card processors will have to make more concessions to resolve their long-standing dispute with merchants.
Read more »