Swipe Fee Deal Faces October Deadline
NEW YORK -- There has been a lot of voices raised in opposition to a proposed swipe fee deal with Visa Inc. and MasterCard Inc., but the plaintiffs in the lawsuit have until Oct. 19 to formally request approval of the settlement.
News of the deadline comes as U.S. Magistrate Judge James Orenstein ordered that the agenda be made public following a hearing on the status of the case on Thursday, according to Bloomberg Businessweek. It was the first court appearance since the settlement was made public on July 13.
Visa and MasterCard, the world's biggest payment networks, and some of the largest banks agreed to the settlement last month after a seven-year legal battle. The deal is reportedly more than $6 billion, with originally details putting that amount above $7 billion. The accord, which requires a judge's consent, also includes a temporary reduction in so-called credit-card swipe fees, or interchange fees, and allows retailers to impose surcharges on such transactions. The fees average about 2 percent of the purchase price and generate more than $40 billion a year for U.S. banks, as CSNews Online previously reported.
However, in the four weeks since the proposed settlement was announced many groups, individual retailers and even Sen. Dick Durbin (D-Ill.) have raised objections.
"We are making progress and getting the underlying documents drafted," K. Craig Wildfang, an attorney for the plaintiffs, said in court regarding a motion for approval of the settlement. "We are going as fast as we can. Not as fast as we would like."
NACS, the Association for Convenience & Fuel Retailing and the National Cooperative Grocers Association plan to fight the settlement in court, Jeffrey Shinder, a lawyer for the groups, told Bloomberg Businessweek.
"There are serious issues with the settlement," he said. "The trade association named plaintiffs who came out against it, all of the members of their boards -- flesh and blood merchants -- voted against it."
Within hours of the proposed deal, the NACS board of directors, composed of more than two dozen merchants, unanimously rejected the proposed settlement agreement because it does not introduce competition and transparency into the credit card swipe fee market, as CSNews Online previously reported. In the days and weeks that followed several others joined the chorus of objections. Those have included Ricker Oil, Thorntons, Target Corp., Wal-Mart Stores Inc., and the Society of Independent Gasoline Marketers of America (SIGMA).