The final approval of a proposed multi-billion dollar legal settlement over credit card “swipe fees” could be in jeopardy – or at least delayed – by more legal wrangling. Six of the 19 plaintiffs in the case, all big trade groups, now say they oppose the $7.25 billion deal reached in mid-July.
The antitrust lawsuit, filed back in 2005, alleges MasterCard and Visa conspired with some of the largest banks in the country to set the swipe fee a merchant must pay every time a customer uses their credit card. Customers don’t see that fee – which ranges from 1.5 to 3.5 percent of the purchase – even though we all pay for it in the form of higher prices.
The banks and credit card companies say the fee is needed to pay for processing the transactions and to cover losses from fraud. Merchants hate the swipe fee, saying it reduces their profits and forces them to raise prices.
The six retail organizations who brought this case say they’re against the proposed agreement because it does not prevent Visa and MasterCard from boosting swipe fees whenever they want.
The antitrust lawsuit, filed back in 2005, alleges MasterCard and Visa conspired with some of the largest banks in the country to set the swipe fee a merchant must pay every time a customer uses their credit card. Customers don’t see that fee – which ranges from 1.5 to 3.5 percent of the purchase – even though we all pay for it in the form of higher prices.
The banks and credit card companies say the fee is needed to pay for processing the transactions and to cover losses from fraud. Merchants hate the swipe fee, saying it reduces their profits and forces them to raise prices.
The six retail organizations who brought this case say they’re against the proposed agreement because it does not prevent Visa and MasterCard from boosting swipe fees whenever they want.
