The battle over credit card swipe fees rages on as a new lawsuit has been filed against the multi-billion dollar settlement that is just months from being finalized.
The $7.25 billion proposed settlement between Visa and MasterCard, and a large number of retail groups and chains, has drawn significant opposition from many well-known national stores, and as such, a group of 17 retailers recently filed a new suit in a New York court over the case, according to a report from Bloomberg Businessweek. The suit alleges that these two payment processing giants illegally hindered competition in the interchange fee market by imposing nearly identical rules for how they could charge stores for accepting these payments.
Further, it claims that the settlement in question from the previous suit would give Visa and MasterCard too much freedom to increase rates to the anti-competitive levels once again in the future, the report said. This is because it prevents any participants in the settlement from suing the companies over these fees going forward.
“Plaintiffs have paid and continue to pay significantly higher costs to accept Visa-branded and MasterCard-branded credit and debit cards than they would if the banks issuing such cards competed for merchant acceptance,” lawyers for the retailers said in the complaint, according to the news agency.
Participants in the suit itself include Target, Macy’s, TJX, Kohl’s, Staples, J.C. Penney, Office Depot, L Brands, Office Max, Big Lots Stores, Abercrombie and Fitch, Ascena Retail Group, Saks, Bon-Ton Stores, Chico’s FAS, Luxottica Group, and American Signature, the report said. This is in addition to a number of other major retailers, including Walmart and Costco, who said they will opt out of the settlement and may file their own suits in the future.
Part of the settlement, which drew particular ire from consumer groups, allowed companies participating in it to charge customers additional fees to help cover the cost of paying these interchange fees levied by Visa and MasterCard. However, experts noted that few stores would actually be able to do so, because agreements with other payment processors, like American Express, would not allow them to apply these costs. Moreover, there was also a feeling that consumers would simply balk at these added charges.