Mastercard (NYSE: MA) and Visa $30 Billion Antitrust Settlement Could Be at Risk

It is possible that the visa (NYSE: V) and Mastercard (NYSE: MA) proposed that a $30 billion antitrust settlement could be at risk, according to a Reuters report. The report said U.S. District Judge Margo Brodie in Brooklyn told lawyers she was “likely not to approve the settlement.”

Following the news, Mastercard called the settlement a “fair resolution” providing businesses with greater flexibility, while Visa called it the “appropriate resolution” in the 19-year-old case.

What is the Visa and MA antitrust lawsuit about?

Many merchants, mostly small businesses, have long complained about the high processing or interchange fees charged by Visa and Mastercard for processing credit and debit card payments, which prevent companies from steering customers towards cheaper payment options. According to Reuters The report, citing data from the Merchants Payments Coalition, put swipe fees at $172 billion last year.

As a result, in 2005, a group of 19 merchants filed a lawsuit accusing them of paying excessive fees to accept Visa and Mastercard credit cards and accusing these companies and their member banks of violating antitrust laws.

Visa and Mastercard settle lawsuit

Earlier this year, Visa and Mastercard announced a $30 billion settlement with U.S. merchants aimed at ending roughly two decades of disputes over credit and debit card fees.

The settlement between payment processors and U.S. companies will see the average swipe fee of 1.5% to 3.5% drop by at least 0.04 percentage points over three years. Visa and Mastercard agreed that the reduced fees would last for three to five years and allow the companies to steer customers toward cheaper payment options.

Is MA a good stock to buy now?

Analysts remain bullish on MA stock, with a Strong Buy consensus rating of 23 buys and one hold. MA shares are up over 15% over the past year, and MA’s $525.25 average price target implies an 18% upside potential from current levels.