Visa Mastercard swipe fees settlement overview:
- Who: A class of merchants reached a settlement with Visa and Mastercard on swipe fees.
- Why: The settlement includes rule changes that will create rollbacks and caps for merchants estimated to be worth nearly $30 billion.
- Where: The Visa Mastercard swipe fees deal was reached in New York federal court.
A class of merchants reached a settlement agreement that will change the rules surrounding Visa and Mastercard credit card swipe fees.
The parties reached the settlement after more than seven years of litigation and more than 24 mediation sessions, settlement documents says. The plaintiffs filed the original case in June 2005; it was later consolidated.
Plaintiffs’ experts Joseph Stiglitz and Keith Leffler estimate the value of caps and rollbacks in the settlement to be nearly $30 billion, according to the settlement.
The agreement will allow merchants to surcharge for higher-rate cards, changing the percentage from less than 20% to 96%.
“All merchants in all states will benefit directly from the rate caps and rollbacks,” the settlement says.
$15M education fund to help merchants understand fees part of deal
The settlement will create more transparent fee rates and average effective interchange rates, according to settlement documents.. The changes will begin either April 15, 2025, or October 15, 2025, depending on how quickly the settlement is approved.
The Visa Mastercard settlement also creates a $15 million merchant education fund to help merchants understand how to differentiate which cards should be surcharged or discounted.
The 2nd Circuit Court of Appeals upheld a $5.6 billion class action settlement between Visa and Mastercard and more than 12 million retailers that has a claim deadline of May 31.
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The plaintiffs are represented by Robert G. Eisler and Chad B. Holtzman of Grant and Eisenhofer PA; Michael J. Freed, William H. London and Robert J. Wozniak of Freed Kanner London and Millen LLC; Linda P. Nussbaum and Susan R. Schwaiger of Nussbaum Law Group PC; and Steve D. Shadowen, Richard M. Brunell and Sherwin Faridifar of Hilliard and Shadowen LLP.
The Visa Mastercard class action lawsuit settlement is in Barry’s Cut Rate Stores Inc., et al. v. Visa Inc., et al., Case No. 1:05-md-01720-MKB-JAM, in the U.S. District Court for the Eastern District of New York.
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