NATSO President and CEO Lisa Mullings today said the decision by the U.S. Court of Appeals for the Second Circuit to reverse the $7.25 billion antitrust settlement that Visa and MasterCard had reached with millions of retailers over the high transaction fees that retailers pay each time a customer uses a credit card marks a major victory for retailers.
“This decision marks a major victory for retailers who have been seeking reform to the broken credit card system that costs them billions of dollars each year,” said Mullings. “Had it moved forward, this settlement would have allowed Visa and MasterCard to continue to set artificially high swipe fees and allowed them to potentially increase those fees in the future to recoup the settlement costs. Our hope is that this ruling will open the door to the possibility of real reform that will allow true competition and transparency in the credit card system."
A federal appeals court on June 30 threw out the $7.25 billion antitrust settlement that Visa and MasterCard had reached with millions of retailers over the high swipe fees that retailers pay ruling that it was unfair to retailers who stood to receive no payments and little or no benefit.
The reversal means that the swipe fee settlement is null and void and that there will be no distribution of payments to retailers. Merchants will not be eligible to participate regardless of whether they opted to remain or not to remain in the class action lawsuit.
In its ruling, the three judge panel also set aside the lower court’s certification of the action as a “class action,” stating that those who would not be eligible to receive a payment from the settlement fund were not adequately represented.
NATSO was one of the original plaintiffs in the case and opposed the settlement because it would not bring meaningful relief to retailers. The settlement stood to only bring monetary relief to merchants who accept credit cards and there was nothing to prevent Visa and MasterCard from hiking rates in the future to recoup the settlement costs.
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