Visa and Mastercard Ask Federal Court to Legalize Transaction Fees

Search form

Visa and Mastercard Ask Federal Court to Legalize Transaction Fees

Visa and Mastercard Ask Federal Court to Legalize Transaction Fees
Wed, 5/29/2013 - by Agence France-Presse

Credit card giants Visa and Mastercard sued retailers that rejected a multibillion-dollar settlement over transaction fees and asked the court to rule the fee practices weren’t illegal.

The latest legal maneuver comes after years of legal battles over so-called “swipe” fees retailers must pay credit cards in each transaction.

Last year, in a proposed settlement, Visa, MasterCard and some banks that issue their cards agreed to pay more than $6 billion to millions of merchants that had sued them for allegedly fixing the card use fees.

But a number of retailers and trade groups — including behemoths such as Walmart, Target and Macy’s — have rejected the deal, saying it would not address the underlying concerns over how the fees are set.

On Friday, the credit card companies launched a counter-attack, asking U.S. District Judge John Gleeson to rule that their fee practices didn’t violate antitrust law, according to the complaint filed in the U.S. district court in Brooklyn.

Visa and MasterCard want to put an end to the legal morass that began back in 2005 with the settlement, which would amount to about $7.25 billion — $6.05 billion for past damages and the $1.2 billion for relief.

“We believe the settlement is a reasonable way to end seven years of negotiation. We remain confident that this settlement will be approved in the fall,” said Trish Wexler, spokeswoman for the Electronics Payment Coalition, which includes Visa.

But last week, another group of retailers rejected the July 2012 draft agreement. They have until May 28 to formally reject the agreement, said a spokesman for the National Retail Federation.

A final hearing is scheduled for September 12.

The NRF “opposes the settlement because it fails to reform the price-fixing system… or to introduce transparency that would lead to competition to lower the fees,” said spokesman Craig Shearman.

“Rather than lowering the fees, the card companies have proposed that the fees be passed along to consumers in the form of a surcharge, even though most major retailers have rejected surcharges.”

In addition, he argued that the settlement amounts, as shared among millions of retailers, would only amount to about three months worth of transaction fees, which the NRF argued is insufficient.

“Swipe” fees range from about 1.8 percent to 2.5 percent, Visa has said, and are worth about $40 billion annually, according to news reports.

 

Article Tabs

Not simply individual guards should answer for this tragedy – but the leaders of private security companies and the governments that employ them must also be held to account.

After a year in which destruction of the world's largest rainforest rose 29%, the new Alto Maues reserve has 1.6 million acres of mostly untouched forests that are not known to have human presence.

The banks have exclusive access to more than 214,000 federal inmates under exclusive contracts awarded by the U.S. Treasury Department about 15 years ago

Toss-up races like Kansas and South Dakota may be the ones that decide whether or not Republicans take control of the U.S. Senate.

Some critics say that the "militarization of the police" is happening right in front of our eyes – but if the Founding Fathers were so worried about a threat of domestic tyranny, how did we get here?

Florida has the highest foreclosure rate in the U.S. in the first quarter of 2014, and also has a "foreclosure king" who is now disbarred for his failure to oversee employees accused of carrying out wrongful foreclosures.

Posted 3 days 22 hours ago

Drug and device makers paid doctors $380 million in speaking and consulting fees over a five-month period last year – and saw a healthy return on their investment.

Posted 6 days 20 hours ago

As of September 19, 181 institutions and local governments and 656 individuals representing over $50 billion in assets have pledged to divest from fossil fuels.

Posted 6 days 21 hours ago

Missourians Organizing for Reform and Empowerment (MORE) is a grassroots group taking the lead to combat systemic racism and build a people's economy in St. Louis.

Posted 6 days 21 hours ago

Punishing local cuts are leaving communities up in arms as the removal of vital school road patrol service – known as the lollipop ladies – could go into effect.

Posted 6 days 21 hours ago

After a year in which destruction of the world's largest rainforest rose 29%, the new Alto Maues reserve has 1.6 million acres of mostly untouched forests that are not known to have human presence.

"Peoples' movements will either succeed in transforming our economic and political systems to build a new world, or we will burn with the old one."

Punishing local cuts are leaving communities up in arms as the removal of vital school road patrol service – known as the lollipop ladies – could go into effect.

Drug and device makers paid doctors $380 million in speaking and consulting fees over a five-month period last year – and saw a healthy return on their investment.

The banks have exclusive access to more than 214,000 federal inmates under exclusive contracts awarded by the U.S. Treasury Department about 15 years ago

Sign Up