Visa, MasterCard and U.S. banks agreed to settle a lawsuit brought by retailers. (Elise Amendola / Associated…)
Visa, Mastercard and major U.S. banks agreed to pay more than $6 billion to settle a lawsuit brought by retailers who accused them of price fixing.
Retailers had alleged in a lawsuit that the two largest payment networks conspired with banks to fix fees they charge retailers for processing customer credit-card transactions.
The dispute began in 2005, when merchants accused the companies of violating antitrust laws by fixing the swipe fees, which average about 2% of the purchase price. Proceeds from those fees generate more than $40 billion a year for U.S. banks.
The agreement follows a 2010 settlement with the Justice Department in which the two payment networks agreed to allow 4 million merchants that were accepting only their branded cards to accept other credit-card brands as well.
Other defendants in the case included Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Capital One Financial Corp. and Barclays.
The settlement will enable merchants to put pressure on Visa and MasterCard to limit or reduce the fees, said attorney K. Craig Wildfang, who was co-lead counsel for the plaintiffs.
"The reforms achieved by this case and in this settlement will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers," Wildfang said in a statement. "Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn, will result in lower prices for all consumers."
The case had been set for trial in September before U.S. District Judge John Gleeson in Brooklyn.
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