Walmart added its sizable voice to the growing ranks of those opposed to a settlement regarding transaction fees charged by Visa and MasterCard.
The card issuers announced the proposed settlement after the market closed on Friday, July 13 and gave the impression issues related to the seven-year-old litigation were resolved. However, it quickly became apparent that was not the case as trade organizations representing retailers and retailers began to speak out. Walmart is the most recent and on Tuesday morning said it was disappointed in the proposed credit card interchange fee settlement and encouraged other retailers to reject the settlement.
“The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year,” according to a statement released by Walmart. “The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts. We believe the proposed settlement would also constrain emerging payments innovation. As Walmart continues to seek reform that will provide transparency and true competition among financial institutions, we encourage all merchants to put consumers first and reject the settlement.”
Walmart’s comments largely echoed those made by representative of the National Association of Convenience Stores (NACS) shortly after the proposed settlement was announced.
“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.”
And that’s exactly what Walmart did on Tuesday. Now it appears the debate begins anew with retailers digging in on the fundamental issue of card companies essentially setting prices bank charge retailers to accept cards. That ability constrains competition and stifles innovation in the rapidly emerging mobile payments space.
As a class plaintiff in the litigation, NACS argued for a trial in which it could demonstrat