Visa and Mastercard to reject antitrust settlement

After Visa and Mastercard announced a legal settlement with U.S. merchants aimed at lowering and capping credit card interchange rates starting in March 2024, a New York judge told lawyers and those opposed to the card networks that they would likely not approve the settlement . According to Reuters, the judge plans to write an opinion describing his decision and reasoning. Objections also included the National Retail Federation, one of the largest retail industry groups, which mentioned that the settlement was insufficient and its benefits were only temporary. Additionally, objectors emphasized that Visa and Mastercard would still be able to impose interchange fees and impose prohibitions on future merchant claims.

After receiving news of the judge’s possible decision, both Mastercard and Visa expressed their disappointment, with the former saying the settlement was a fair solution that could give businesses more flexibility in handling card transactions.

The lawsuit is titled “Payment Card Replacement Fee and Trade Discount Antitrust Litigation” and is being heard in the U.S. District Court for the Eastern District of New York.

Back in March, Visa and Mastercard said the deal was intended to minimize and limit the fees they charge, allowing small and medium-sized enterprises (SMEs) to collectively negotiate rates with a payment processor, much like large merchants do on their own. At the time, the transaction was agreed to by the card networks and a court-appointed class attorney and was intended to provide merchants with clarification in a number of areas regarding their acceptance of payment cards. Additionally, the settlement was subject to final approval by the Eastern District Court of New York, and upon receiving court approval of the class settlement, Mastercard intended to resolve most of its ongoing U.S. commercial disputes that required changes to the company’s transfer infrastructure and acceptance policies.

Additionally, the companies criticized Visa and Mastercard for charging fees for processing credit and debit card payments, as well as for stopping them from pointing customers to more cost-effective payment methods. According to information provided by the Merchants Payments Coalition, which brings together retailers, grocery stores, convenience stores and gas stations, interchange fees amounted to $172 million in 2023 alone and have almost doubled over the last decade.