A proposed settlement between a number of retail groups and the world’s two largest processors of debit and credit card payments recently hit another snag as the judge in the case announced that an appeal announced in July cannot go into effect until September at least.
The settlement was accepted only by a small handful of merchant groups, while hundreds of others stood in opposition to it on the grounds that it was unfair to retailers in a number of ways, according to a report from the National Association of Convenience Stores, one of the more than 1,200 objecting groups. Thankfully for those who do not want the deal to go through as scheduled, the U.S. Court of Appeals for the Second Court in New York recently said that the settlement cannot be completed until all objections to it are filed and heard in September.
“The court’s decision to delay an appeal will motivate more retailers to oppose this proposed settlement,” said NACS chairman Dave Carpenter. “The proposed settlement does little to address the broken system and could, in fact, make it worse. The courts ultimately cannot let that stand against the will of retailers.”
The NACS, like many groups, has already both objected to and opted out of the settlement, but others still have time to make decisions about how they will approach their role in the deal, the report said. It is open to any company that accepted Visa or MasterCard transactions between January 1, 2004, and November 27, 2012, but critics say that the deal provides minimal benefit and then gives those payment processors free reign to continue raising transaction fees because it prohibits retailers from filing suits over them in the future.
This settlement is also what allows merchants to begin applying higher prices to credit card users as a means of covering the interchange fees they face. That aspect of the deal has drawn considerable attention recently because it went into effect Jan. 27, but most experts within the retail industry say that it’s rather unlikely most small businesses will actually take advantage of their newfound ability. Many say that it risks alienating customers, and in some cases, may not necessarily be logistically feasible for either big or small businesses.