Visa, MasterCard and several of the largest banks in the U.S. have agreed to a three-pronged settlement to resolve an outstanding lawsuit filed by merchants over swipe fees. Robins, Kaplan, Miller & Ciresi LLP, counsel for the plaintiffs in the case, released full details of the settlement in an official statement late Friday.
To settle the suit, merchants will be compensated in three ways. First, Visa, MasterCard and their issuing partners will make a $6.05 billion cash payment to merchants to compensate them for previous interchange charges. Second, Visa and MasterCard will lower card acceptance fees over a set time period, providing $1.2 billion in additional relief to merchants, the statement said.
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The third part of the settlement may have the largest impact on consumers’ day-to-day shopping experiences: merchants will now be permitted to charge higher prices on transactions paid for with a credit card, a practice that had been prohibited by the networks’ earlier terms.
The suit’s origins go back to 2005, when merchants alleged that the fixed swipe fees charged by Visa and MasterCard violated antitrust laws. Since the suit’s beginnings, millions of merchants have joined the plaintiffs’ side, and Bank of America, Citigroup, Wells Fargo, Capital One, Barclays and HSBC are among the defendants.
A copy of the settlement has been made available online by Robins Kaplan.
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