Visa/MasterCard Swipe-Fee Settlement Struck Down
On Thursday, the U.S. Court of Appeals for the Second Circuit in New York struck down the 2012 settlement of a class-action lawsuit over Visa and MasterCard’s credit card swipe fees. Retailers rejected the $7.25 billion settlement because it failed to reform the price-fixing system under which Visa and MasterCard set fees for credit cards issued by thousands of banks, according to a statement from the National Retail Federation. Visa and MasterCard proposed that the fees be passed along to the consumers as a surcharge rather than be lowered. At the time, credit card fees averaged about two percent of each transaction and amounted to $30 billion.
Total Retail’s Take: Credit cards are causing quite a stir for retailers. On top of this lawsuit, Visa is being sued by Kroger, Walmart and Home Depot. Credit cards are convenient for both shoppers and retailers. Transactions are paperless and automatically processed. Forcing consumers to pay processing fees doesn’t seem like the right thing to do because of the swiftness they provide to both sides. However, consumers aren’t quitting cards anytime soon, so these companies might have the upper hand in the end.