A US federal judge has put on hold the $30 billion
settlement by Visa and Mastercard with merchants alleging overpriced swipe
fees, signaling a possible rejection, AP reported. The settlement, aimed at
lowering and capping transaction fees, has faced opposition from major retail
groups.
Legal Roadblock for Visa and Mastercard
Judge Margo Brodie, overseeing the case in the Eastern
District of New York, has issued an order indicating skepticism towards
finalizing the $30 billion agreement. This development comes after Visa and
Mastercard’s efforts to resolve a longstanding lawsuit dating back to 2005,
which accused the payment giants and their member banks of antitrust violations
through excessive transaction fees.
The proposed settlement, reached in March with a
coalition of small businesses, promised to limit swipe fees and enable
collective bargaining similar to larger retailers. However, its terms drew criticism from the National Retail Federation (NRF), which argued that the fee caps
were inadequate and only offered temporary relief.
If Judge Brodie declines final approval, the case
could proceed to trial, prolonging the legal battle and intensifying scrutiny
on Visa and Mastercard’s fee structures. The outcome will likely influence how
payment processing fees are regulated and negotiated in the future, potentially
reshaping dynamics within the industry.
Previously, Visa and Mastercard settled part of the
lawsuit in 2018, agreeing to pay $6.2 billion to a group of 19 merchants.
However, unresolved issues regarding card acceptance rules and
non-participating merchants persisted, culminating in the current $30 billion
proposal under judicial review.
Expect ongoing updates as this story evolves.
This article was written by Jared Kirui at www.financemagnates.com.
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