Visa and MasterCard on Friday announced a proposed $6.6 billion settlement to a long-running dispute over the fees they charge merchants, but one major trade group was clearly annoyed at the prospect.
The major card issuers were eager to put the seven-year-old lawsuit behind them, but whether the matter is truly resolved remains unclear. Visa, MasterCard and other U.S. financial institutions who were defendants in the case signed a memorandum of understanding to enter into a settlement agreement with the class of U.S. retailers who sued in 2005. That’s not the same as an actual settlement and the National Association of Convenience Stores said it rejected the proposal.
“NACS does not accept this proposed settlement and we reserve the right to fight it if other class representatives do accept it,” said NACS president and CEO Henry Armour. “There is plenty of time for merchants to make thoughtful decisions related to this proposed settlement. We hope and expect that, as they have the time to review it, many other merchants including class representatives will decide to reject this proposal.”
In addition to the cash payment merchants would receive, another proposal settlement involves U.S. merchant class members receiving a 10 basis points reduction in credit interchange rates for an eight month period and retailers could begin adding a surcharge to recover costs associated with acceptance of Visa and MasterCard products.
Despite NACS’s opposition to the proposed settlement, Visa and Mastercard were eager to move on and statements by both companies gave the impression issues related to how much they charge retailers to accept their cards had been resolved.
“We believe settling this case is in the best interests of all parties,” said Visa chairman and CEO Joseph W. Saunders. “We are comfortable with the terms, which we do not anticipate will impact our current guidance. Visa is well positioned to help drive the migration to electronic payments in the United States and globally.”
MasterCard general counsel and chief franchise integrity officer Noah Hanft said his company’s stakeholders were best served by an amicable resolution.
“Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases,” Hanft said. “We believe that today&rsqu