From American Association for Justice News Brief of July 16, 2012. Major media outlets devoted detailed reports to a $6 billion settlement announced late Friday to end a lengthy lawsuit that pitted Visa, MasterCard, and banks against retailers over so-called “swipe fees” for credit cards. Reports focus heavily on backgrounding the issue, with some noting a likely increased cost to consumers when stores start charging more for paying by credit card.
NBC Nightly News (7/13, story 8, 0:30, Williams) reported, “Visa, MasterCard, and the big banks that issue those cards reached a settlement tonight with thousands of stores across this country over the fees for processing credit and debit card transactions. The settlement is one of the largest ever. $7.25 billion will go to the merchants but it may wind up making it more expensive to use our credit cards. Somewhat unbelievably, stores will now be allowed to impose a surcharge for using credit instead of cash.”
The AP (7/14) reported that attorneys in the case said it was “the largest antitrust settlement in US history” and “is seen as a major victory for merchants that have long complained about the billions of dollars…that they pay to banks for purchases made using plastic.” The AP notes that the retailers will now face the question of whether to impose the charges on their customers and, if so, how to do it “without angering them.”
On the front of its Business Day section, the New York Times (7/14, B1, Silver-Greenberg, Subscription Publication) reported that MasterCard and Visa both said the settlement was in the best interest of all parties, while the American Bankers Association said “our industry is ready to put this matter behind us.” The Times notes that some 7 million merchants were represented in the settlement. In addition to their complaints about price-fixing of high processing fees for credit and debit cards, those merchants also said “payment processors unfairly banned stores from compelling their customers to use less expensive methods of payments like cash and checks.” The card companies also agreed in the settlement “to reduce the charge to process transactions for eight months,” which could be worth more than $1 billion to the plaintiffs.
The Washington Post (7/14, Mui, Jayakumar) calculated the settlement is worth up to $7.25 billion and said “shoppers could start seeing prices for products vary depending on how they choose to pay.” In a brief report, the Los Angeles Times (7/13, Pfeifer) noted the agreement “follows a 2010 settlement with the Justice Department in which the two payment networks agreed to allow 4 million merchants that were accepting only their branded cards to accept other credit-card brands as well.”
From the desk of John Badal, President of the Liever, Hyman & Potter injury law firm, serving the Reading, Pottsville, Berks County and Schuylkill County and Central Pennsylvania areas.