Summary of the Visa/Mastercard Interchange Fee Lawsuit
The Visa/Mastercard interchange fee lawsuit is a significant legal case addressing improper fees charged to merchants that accepted Visa or Mastercard credit or debit cards between January 1, 2004, and January 25, 2019. Merchants alleged that Visa and Mastercard and their member banks engaged in anti-competitive practices that violated the law by setting interchange fees and imposing restrictive rules on merchants. These rules included no-surcharge rules, no-discounting rules, and honor-all-cards rules, which insulated Visa and Mastercard from competitive pressures to lower interchange fees.
Despite changes in Visa and Mastercard's corporate structures and their transitions to publicly owned corporations, the merchants claimed these anticompetitive practices continued. This settlement aims to address these grievances and provide compensation to affected merchants.
Important Update: Deadline Extension for Claims
U.S. merchants who processed Visa and Mastercard payments during the specified period now have until August 30, 2024, to file claims for their share of the $5.5 billion class-action settlement. This 90-day extension from the original May 31 deadline was granted to resolve conflicts where multiple parties filed claims for the same business and to allow additional businesses to file new claims.
Frequently Asked Questions
What are interchange fees?
Interchange fees are transaction fees that merchants pay to the card-issuing banks whenever customers use credit or debit cards for purchases. These fees are set by the card networks (Visa and Mastercard) and can vary based on the type of card and the transaction amount.
Why was the lawsuit filed?
Merchants filed the lawsuit because they believed that Visa and Mastercard, along with their member banks, were unlawfully setting interchange fees and imposing rules that restricted merchants from steering customers towards cheaper payment methods. The merchants argued that these practices violated antitrust laws and led to higher costs for both businesses and consumers.
Who is eligible for compensation from the settlement?
Merchants who accepted Visa or Mastercard credit or debit cards between January 1, 2004, and January 25, 2019, may be eligible for compensation. The exact amount of compensation will depend on various factors, including the volume of transactions processed during the specified period.
How can merchants claim their compensation?
Merchants must submit a claim to receive compensation from the settlement. The process for submitting claims and the specific deadlines are outlined by the settlement administrators. Eligible merchants should stay informed about these details to ensure they receive their due compensation.
What impact does this settlement have on current Visa and Mastercard practices?
While the settlement addresses past practices, Visa and Mastercard have implemented some changes to their rules and fee structures in response to ongoing regulatory scrutiny and market pressures. However, the settlement does not preclude future legal actions or regulatory changes that may further impact how these networks operate.
Thousands of Conflicting Claims
As of May 2024, over 30,000 claim conflicts remain unresolved. These conflicts often arise when multiple parties attempt to file a claim on behalf of the same business, involving third-party filers, class members, and claim buyers. Efforts are ongoing to resolve these conflicts, and eligible merchants are encouraged to take advantage of the extended deadline to file their claims.
Contact Us for More Information
If you have any questions or need further information about the Visa/Mastercard settlement and how it may affect your business, please contact us at (202) 455-6010 or schedule a confidential consultation. Our team is here to provide personalized advice and help you navigate the complexities of this settlement.
