Retailer Groups React to Visa & Mastercard Settlement
Visa touted multiyear benefits for businesses, such as lower interchange rates, a cap on the reduced credit interchange rates for five years and new ways to manage costs. However, NACS announced its opposition for multiple reasons, claiming that the deal could prevent real change from happening in the marketplace.
The settlement is consolidated by a larger lawsuit by NACS and other groups that was first filed in 2005. A previously announced settlement in 2012 was rejected by NACS and a majority of plaintiffs because it fell short of addressing problems with credit card industry price-fixing, the association said.
The same is true of the newly announced settlement, according to NACS, which noted that the settlement is drafted as "mandatory" and would bind all other litigants, including a separate suit being pursued by the association and some of its members, cutting off any future injunctive relief/rules claims.
Additionally, the settlement does not address the lack of competition in the marketplace and is not related to the bipartisan Credit Card Competition Act, which would assert that retailers in certain cases have the right to route payments through networks unaffiliated by the credit card providers, potentially lowering the fees they have to pay.
"Unfortunately, this settlement does not look much better than the one we successfully fought in 2012," said NACS General Counsel Doug Kantor. "There are some additional provisions, but our initial review shows them to be limited in time and efficacy. We expect most merchant groups will see this the same way and that there will be major efforts to urge the court to reject the settlement.
"This settlement shows once again how urgent it is for Congress to act. We need real reforms that bring market competition to credit card swipe fees so that Main Street gets real, long-term relief," Kantor added.