A massive, controversial settlement between a number of retailer groups and the world’s two largest processors of debit and credit card payments is looming, but now, more companies are opting out of the deal on the grounds that they feel it is unfair to them going forward.
A total of 19 companies have opted out of the deal, including a number of extremely well-known national brands including 7-Eleven, Walmart, Starbucks, Gap, Lowes and Nike, according to a report from Convenience Store News. The companies are pulling out of the deal, which would require Visa and MasterCard to pay some $6 billion to as many as 8 million companies nationwide, because the language of the settlement specifies that companies receiving funds would be unable to sue the payment processors for their fee structures at any point in the future.
At issue in the settlement itself is that these fees, charged every time a consumer uses a credit card to make a purchase, were too high. In addition to the $6 billion in settlement payments, the companies would also reduce these fees temporarily, providing an additional $1.2 billion in savings, the report said. Further, beyond the 19 companies that have already announced intentions to pull out of the agreement, a number of other major industry groups, such as the Association for Convenience and Fuel Retailing, already oppose the deal.
The settlement was initially approved in November 2012 by a District Court judge in Brooklyn, but will have a hearing for final approval in September.
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Another aspect of the settlement would allow those accepting it to begin applying a surcharge to consumers’ purchase prices to help them to cover the cost of interchange fees charged by Visa and MasterCard for processing the transaction. However, many experts say that the vast majority of businesses won’t take part in such a change because it would either upset customers and some states have even outlawed the process.