Visa, MasterCard Reach Swipe Fee Settlements with Dozens of Merchants

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Numerous companies have announced that they have reached settlements with Visa Inc. and MasterCard Inc. over claims the payment card companies conspired to charge merchants interchange fees any time customers used a Visa or MasterCard to make a purchase. The settling plaintiffs had opted out of a prior $7.25 billion swipe fee settlement in the multidistrict litigation (MDL) titled In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.

The plaintiffs informed the court that they had reached swipe fee settlements with Visa and MasterCard and yesterday the claims against the payment card companies were dismissed with prejudice by a New York federal judge. Further information about the settlements was unavailable. The swipe fee settlements are subject to court approval.

Included in the long list of settling plaintiff companies are La Quinta Inns Inc., RadioShack Corp., Orbitz Worldwide LLC, Cinemark USA Inc., City of Houston and the Men’s Wearhouse Inc.

The Visa/MasterCard swipe fee class action lawsuit was initially filed in 2005. It accused the payment card companies and their founding banks of conspiring to artificially inflate the fees associated with each credit and debit card transaction. By the time the swipe fee MDL was settled in 2012, the focus was narrowed down to the companies’ practice of setting interchange fees.

In December 2013, a New York federal judge approved the $7.25 billion swipe fee class action settlement with about 12 million merchants over the objections of numerous merchants who believed the release of claims to be too broad and would unfairly limit the prospect of future litigation.

The massive swipe fee class action settlement is currently on appeal before the 2nd U.S. Circuit Court of Appeals due to objections that the deal did not provide sufficient compensation to the merchants when compared to the huge amount of profit Visa and MasterCard enjoyed from their allegedly anti-competitive payment card rules and fees.

Class Members of the $7.25 billion Visa/MasterCard settlement include merchants who have accepted Visa and MasterCard at any time since Jan. 1, 2004. According to the Settlement Administrator’s website, Claim Forms for the $7.25 billion Visa/MasterCard swipe fee settlement will not be available until all appeals have been resolved.

Several other companies that opted out of the $7.25 billion swipe fee settlement have also recently reached individual settlements with Visa and MasterCard, including Delta Air Lines Inc.

The plaintiffs are represented by Richard E. Norman and R. Martin Weber Jr. of Crowley Norman LLP and Jeffrey J. Angelovich of Nix Patterson & Roach LLP.

The Visa, MasterCard Swipe Fee Class Action Lawsuit is In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Case No. 1:14-md-01720, in the U.S. District Court for the Eastern District of New York.

UPDATE: On June 30, 2016, the 2nd U.S. Circuit Court of Appeals rejected a $7.25 billion antitrust settlement with merchants over Visa and MasterCard’s swipe fees, finding that merchants who accept the cards after the settlement is finalized would not be adequately represented in the deal.

UPDATE 2: On Dec. 1, 2016, merchants seeking to wrap up a credit card swipe fee class action settlement are appealing their case to the U.S. Supreme Court.

UPDATE 3: June 2018, Visa and MasterCard are approaching a settlement deal over a swipe fee class action lawsuit after more than a decade of litigation. The settlement amount is estimated to be around $6.5 billion and is expected to be reached by mid-July.

UPDATE 4: On Sept. 18, 2018, Visa, MasterCard, and numerous banks including Bank of America, Barclays, JPMorgan Chase, Citibank, and SunTrust Bank, have reached a new $6.2 billion settlement deal to resolve a massive antitrust swipe fee multidistrict litigation.

UPDATE 5: On Jan. 24, 2019, a New York federal judge preliminarily approved a massive Visa, Mastercard swipe fee settlement, which would add an additional $900 million for merchant Class Members.

UPDATE 6: March 2019, a settlement website has recently been established for Class Members in the Visa, Mastercard swipe fee class action lawsuit. While Claim Forms are not currently available, the website provides an opportunity for Class Members to pre-register to receive one.