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Visa, Mastercard and a group of leading US banks have proposed a $ 6.2 billion settlement of a lengthy antitrust lawsuit against the "transfer fees" they charge merchants.
The monetary settlement requires court approval but, even if it is allowed, a related dispute over the rules that card networks may impose on merchants will remain unresolved.
Under the agreement, both payment groups and banks, including JPMorgan Chase, Bank of America and Citigroup, agree to pay traders $ 900 million in addition to the $ 5.3 billion agreed under the agreement. of a revised regulation for 2012. Visa's share in the additional payment will be $ 600 million, while Mastercard is responsible for another $ 108 million. Both companies had increased their reserves to reflect their obligations under the last regulation.
If the settlement is approved, the plaintiffs will have the opportunity to withdraw in the light of the current case of card network rules.
"It is highly likely that large traders involved in card network disputes will withdraw from the settlement," said Jeffrey Shinder, lead counsel for the "7-11" plaintiffs group, a group that includes Amazon, Starbucks, Lowe and 7-11. "This case basically concerns structural issues, not just money."
The rule of honor for all cards imposed on them by Visa and Mastercard is of particular concern to many merchants. It states that a merchant taking a Visa card from a bank issuer, for example, must take all Visa cards. Merchant groups claim that the rule removes the incentive for banks to charge lower transaction fees.
In 2012, the card companies entered into a $ 7.25 billion dispute settlement agreement, presented 13 years ago, covering both the monetary and regulatory elements of the case. This was disputed by some traders, and finally rejected by the court, which concluded that the fact that the same plaintiffs' lawyers were suing for damages and "injunctive relief" represented a conflict of interest. The decision resulted in a revised monetary offer of $ 5.3 billion.
Regulators in other countries have imposed ceilings on fees that banks can charge to credit holders. According to the rules of the EU, the limit is 0.3% for credit cards and in Australia, fees are capped at less than 1%. In the United States, the "shipping costs" for debit cards were capped as part of Dodd-Frank's financial reforms in 2010, but commissions averaged about 2% for credit cards .
Brian Riley, Card Industry Analyst at Mercator Advisory Group, said significant impacts would be expected if operating costs went down. "As you've seen with debit cards in the United States after Dodd-Frank, the rewards programs for cardholders will disappear quickly and the credit will probably be tight."
At mid-day trading in New York, Visa shares rose 1% and Mastercard shares rose 2%, both ahead of the broader market.
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