If you are a merchant who has accepted Visa or MasterCard at any time between January 1, 2004 and November 28, 2012, you are eligible to receive an interchange fee settlement from the $6B class action lawsuit filed against the card associations. There is an additional $1.2B interchange fund allocated for merchants accepting Visa and MasterCard from July 29, 2013 through the subsequent eight months. The amount to be distributed to merchants from the interchange fund is 1/10th of 1% of total Visa and MasterCard transaction volume for the eight month period beginning July 29th, 2013. The suit was filed in the state of New York with the claim that Visa and MasterCard conspired to charge excessive fees to merchants accepting their cards.
The settlement was recently finalized, and all merchants fitting into the above classification are now eligible to get their payout. However, not everyone considers this a win for merchants. To find out why, we can look to the “big guys” who have rejected the settlement (the deadline to do so has passed). 19 of the largest retailers in the U.S. have opted out of the antitrust lawsuit in order to retain their right to bring another suit against Visa and MasterCard at some point in the future, and to prevent the release of future liability of anticompetitive actions on the part of the credit card associations. The retailers include Walmart, Lowe’s, Costco, Starbucks, Gap Inc., J. Crew, 7-Eleven (Alon), and others.
Not only are they opting out because of the future release of liability, but also because they don’t believe the settlement does enough for merchants of any size to help reduce costs of credit card processing, and therefore to help reduce prices for […]