Security & Fraud

Supreme Court Opts Not To Restore $7.25B Settlement Between Visa, Mastercard and Merchants

The Supreme Court yesterday decided not to restore a $7.25 billion settlement between credit card networks Visa and Mastercard and merchants over their disputes concerning credit card processing fees.

According to the Associated Press, the justices declined to hear the case and were silent on the reasons why. That decision will let stand  the ruling by a federal appeals court in New York that tossed the settlement.

The case stems from a long-standing dispute between card networks and merchants over interchange  fees when shoppers use their credit and debit cards in stores to pay.  The merchants has argued in a case that started in 2005 that Visa and Mastercard collude to fix fees they charge stores for accepting credit card payments and claimed that the card networks barred them from enabling customers to use a cheaper payment form at checkout.

A multibillion-dollar settlement was approved by the courts back in 2013 but was faced with objections from retailers and consumer groups and appealed.

Appeals Court Judge Dennis Jacobs wrote in his findings that the two classes of merchants should never been represented by the same group of lawyers. One class of merchants were those that accepted Visa or Mastercard from January 2004 to November 2012, while the second class accepted the cards after 2012.

This, the judge claims, posed a “fundamental conflict” because the lawyers may have put them in position to negotiate settlement terms that only benefited one of the classes.

——————————–

Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

Click to comment

TRENDING RIGHT NOW