PYMNTS MonitorEdge May 2024

Mastercard and Visa Pay $197 Million to Settle ATM Suit

NCR - Digital-First Banking - March 2022 - Explore why more ATM network providers and FIs are catching on to the appeal of cash-recycling ATMs

Visa and Mastercard will pay $197 million to end a class action suit centered on ATM fees.

According to court papers filed Wednesday (May 29), the two payments giants have agreed to settle the case, brought by consumers who withdrew cash from bank-operated ATMs, and who accused the companies of anti-competitive behavior by agreeing to control ATM prices and hinder competition between ATM networks.

Writing in the court filing, the plaintiffs’ lawyers called the settlement “an excellent result” for their clients, noting that three banks that had also been sued for alleged ATM fixing — Chase, Wells Fargo and Bank of America — had already agreed to a $66 million settlement.

The total recovery of $264.24 million represents between 23.1% and 38.2% single damages, an “exceptional rate of recovery,” the filing said, especially for a class action suit. Visa will pay $104.6 million to settle the case, with Mastercard covering the remaining $92.8 million.

The settlement came after the U.S. Supreme Court last month declined the credit card companies’ request to review the case, allowing it to continue. 

PYMNTS has contacted Visa for comment but has not yet gotten a reply. A spokesperson for Mastercard declined to comment.

As PYMNTS wrote last month, this case has been playing out at a time when ATMs are evolving to become more interactive and take on a range of tasks beyond just producing paper currency. Most estimates put the number of ATMs still in use at around 450,000 after reaching the pre-pandemic peak of 470,000.

According to cash automation manufacturer and distributor Wittenbach, ATMs continue to thrive in nontraditional locations, like restaurants, doctor’s offices and boutique retail stores. The company has also seen demand for mobile ATM locations that can be easily transported to locations with varying levels of foot traffic.

And they are serving a variety of functions in the connected economy. For example, NCR Atelos, operator of the largest ATM and what it calls Interactive Teller Machine network (ITMs), has positioned its machines as full-service locations that can take deposits, handle cash recycling and allow access to account information. 

In making cash more convenient, it contends, branch employees can be more productive and customer-centric.

According to Atelos, around half of the 66% of people who earn less than $100,000 still use cash regularly. 

“Meanwhile, another study suggests that, for 30% of customers in the U.S., cash remains their preferred payment method. Cash may no longer be the default payment method, but demand remains high across the entire population.”