The massive battle over the amount of money charged to merchants by the world’s two largest processors of credit and debit card payments recently hit another bump in the road, as a group of retailers appealed the preliminary approval of the case’s settlement deal.
The retail group, made up of 10 organizations, including the National Association of Convenience Stores, the National Restaurant Association and more, all of which were party to the original suit, recently filed the appeal saying that the deal would not be to their benefit, according to a report from Reuters. Other, larger merchants also object to the deal as well, saying that the $7.2 billion settlement is a relative drop in the bucket to Visa and MasterCard, which generated swipe fee revenues of $30 billion annually for the years disputed in the suit itself.
[Free Resource: Check your credit score and report card for free before applying for a credit card]
In particular, though, the terms of the appeal relate to the legal rights of merchants following the deal’s settlement, the report said. The provisions in that deal would not allow new suits to be brought against the payment processing giants related to the swipe fees they charge to merchants in the future. This means that though the settlement tacitly acknowledges that it overcharged retailers for processing these transactions in the past, they would be free to boost them to the disputed levels after a brief time with little threat of legal recourse from those paying the costs.
“The proposed settlement violates the due process rights of millions of merchants by denying them the ability to opt out of the injunction, and this fundamental issue of law should be addressed now before notice goes out to merchants,” Jeff Shinder, a lawyer who represents the objecting plaintiffs, told the news service.
As it stands, the terms of the settlement will grant some 8 million merchants nationwide access to the $7.2 billion, which will be paid in the form of both cash and temporarily reduced swipe fees, the report said. It received initial approval from a U.S. district judge based in Brooklyn earlier this month.
[Credit Cards: Research and compare credit cards at Credit.com]
Swipe fees are charged every time a merchant processes a debit or credit transaction, and experts say that these costs can add up to tens of thousands a year or more for even small businesses that accept these payment methods.
Image: , via Flickr
Credit.com Credit.com offers straightforward tips and advice to help you make smarter financial decisions. Visit Credit.com to sign up for your FREE Credit Report Card and find out where you stand today! Have a question for our experts? Connect with us on Google+.
Follow Us
