October 31, 2018

Merchant Fees in a Post-Settlement World

In what has been dubbed the largest-ever class-action settlement in US antitrust history, credit card processing networks Visa and Mastercard – along with a handful of banks that once owned the networks – recently agreed to a $6.2 billion settlement in the ongoing case between the networks and more than 12 million individual merchants who accept Visa or Mastercard payment cards. The suit alleges that the banks and networks colluded to deliberately inflate interchange fees (the cost to process a credit card transaction) that merchants are charged to accept cards from the Visa or Mastercard credit card networks. In addition to seeking monetary recompense for the inflated fees, the plaintiffs – primarily the large retailers – are also seeking structural changes that would allow more flexibility in how merchants charge consumers for interchange costs. Given the sheer size of Visa and Mastercard, retailers have little choice but to hope for…

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