Visa and Mastercard can handle larger settlement, proposed $30 billion deal rejected

From Investing.com: 2024-06-28 18:58:20

A federal judge believes Visa and Mastercard can handle a larger settlement with merchants than the $30 billion deal rejected this week. The proposed accord aimed to lower and cap swipe fees paid by merchants on Visa and Mastercard transactions. The judge found the estimated $6 billion in annual savings for merchants to be insufficient compared to the $100 billion in fees paid in 2023.

Visa and Mastercard face challenges in the antitrust litigation case dating back to 2005. The rejected settlement would have slightly reduced swipe fees and provided some benefits to merchants. Both companies expressed disappointment with the rejection, highlighting the benefits of the proposed accord for businesses accepting card payments.

The proposed changes in the rejected settlement included a slight reduction in swipe fees, fee caps, and more flexibility for merchants to impose surcharges. However, the judge found these changes to be inadequate in providing the best possible recovery for merchants. The settlement did not address all concerns, such as the “Honor All Cards” rule imposing card acceptance requirements on merchants.

Many merchants and trade groups opposed the rejected settlement, highlighting concerns over swipe fees. The rejected settlement and ongoing litigation impact the payment card industry, with the case continuing in court. The court case is known as In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation in the Eastern District of New York.



Read more at Investing.com: Visa, Mastercard can likely handle settlement much bigger than $30 billion, judge says By Reuters