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Electronic Payments Coalition Issues Statement on National Retail Federation Interchange Settlement Appeal
After nearly a decade of negotiations, the court has determined that this settlement is in the best interest of all parties involved. This is simply a political ploy by a few big box retailers – for whom enough is never enough – that disregards the millions of retailers who are supportive of the settlement. These same tired arguments were raised over and over during the negotiations and would have been included in the final terms if they had any merit.
A federal judge approved the multibillion-dollar settlement of a lawsuit over credit card swipe fees, resolving an eight-year battle between banks and retailers. In a 55-page ruling, U.S. District Judge John Gleeson says the settlement will have a positive effect on competition. He was also sharply critical of the tactics and arguments made by many of the nation’s largest retailers, which tried to torpedo the deal. “The vitriol and poor behavior and feigned hysteria mask complex and difficult issues on which reasonable merchants can and do disagree,” Gleeson writes.
Visa Inc. (V) and MasterCard Inc. (MA) won approval for a $5.7 billion settlement that ended years of litigation with U.S. merchants over allegations that credit-card swipe fees are improperly fixed. U.S. District Judge John Gleeson said that he was satisfied with the settlement, which was estimated to be the largest-ever U.S. antitrust accord.
Visa and MasterCard won a years-long court battle on Friday with the approval of a $5.7 billion settlement over credit card swipe fees.
Today, The U.S. District Court of the Eastern District of New York approved a settlement in the long-running legal dispute between retailers, payment networks and nine major card issuers over interchange fees and rules. The Electronic Payments Coalition issued the following 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. “This settlement is in the best interest of all involved parties and that has been proven today with the court’s final approval.”
Over the last few weeks, some of the largest retailers in the United States have split off from a proposed $7.2 billion class action settlement over an alleged conspiracy to inflate credit card fees, hoping they can do better on their own. But their path is not without significant risks. Craig Wildfang of Robins, Kaplan, Miller & Ciresi, who has served as one of the lead lawyers for the class, said that merchants striking out on their own may not appreciate the novel nature of the claims made in the class action. “I think they have greatly underestimated the risk of the case and probably overestimated their ability in the short and medium term of getting greater economic value in a settlement,” Wildfang said.
I believe that retailers need to stop bemoaning credit card swipe fees as a kind of necessary tax. Businesses aren’t forced to accept credit cards, and many smaller businesses do fine as cash-only businesses. Meanwhile, Visa and MasterCard provide companies with an invaluable service – keeping transactions digital and allowing retailers to avoid the hassle, expenses and danger of stockpiling large quantities of cash. Accepting credit cards also generates higher sales volume from more shoppers who use plastic for their everyday needs. Credit card usage also encourages pricier purchases – spending $1,000 in cash sure feels a lot more costly than swiping and signing on the dotted line. Lastly, swipe fees are often used to enable reward cards, which can keep customers coming back to spend more. In other words, retailers have plenty to thank Visa and MasterCard for. However, they continue to see swipe fees as taxes and an … Continue reading
Visa Inc. (V) and MasterCard Inc. (MA) are firing back at retail trade groups trying to derail a pending $7.25 billion settlement over so-called merchant swipe fees. The world’s largest payment networks asked a federal judge Friday to rule that their practices for setting fees paid by merchants that accept credit and debit cards aren’t anticompetitive, which could limit the type of lawsuits retailers could bring against the companies in the future. Such a ruling is “necessary to prevent the continuation of endless, wasteful litigation” between merchant trade groups and Visa and MasterCard, the companies said in a complaint seeking declaratory judgment filed in U.S. District Court in Brooklyn.
Visa Inc. (V) and MasterCard Inc. (MA) sued trade groups and retailers that rejected a $7.25 billion settlement in a price-fixing suit and asked a court to rule that the card companies’ fee practices weren’t illegal. “After years of negotiation, the same retailer trade groups that willingly agreed to a multibillion dollar settlement are now turning around and demanding even more,” said Trish Wexler, a spokeswoman for a coalition representing the interests of the payment card industry. “Enough is enough — these tired old arguments and this battle needs to be put to bed.”
Consumer advocates are reminding shoppers to look out for merchants that impose credit card surcharges. Merchants must meet certain requirements if they impose a surcharge on credit card purchases: • Retailers must post a notice at the entrance of their stores and at the point of sale. • The retailer has to disclose the surcharge percentage and explain the fact that the charge is being imposed by the retailer (not the credit card company) and does not exceed the amount the retailer pays to accept credit cards. • Receipts need to show the dollar amount of the surcharge. • Online merchants must alert consumers that a surcharge will be imposed on the webpage where credit cards are first mentioned. “The rule of thumb is this – you can’t gouge your customers, and you can’t hide the fees,” said Trish Wexler, spokeswoman for the Electronic Payments Coalition, which represents banking and financial institutions, including Visa … Continue reading