Contents tagged with Interchange Litigation

  • Supreme Court denies merchants' petition for lower debit card processing fees

    January 22, 2015
    The Supreme Court opted to dismiss a merchant petition calling for the court to reconsider the debit card swipe fees set by the Fed.

    In 2011, the Federal Reserve was accused of ignoring the Durbin Amendment to the 2010 Dodd-Frank Act when it established a debit card swiping fee of 21 cents per transaction, a cap that they claimed was allowed by the amendment's ambiguous language. On the other side of that debate, merchants argued that that cap was far beyond what was originally intended by Dodd-Frank, with a U.S. district court ruling in their favor in the summer of 2013. But as we shared with you last year, that ruling was then overturned by an appellate court, stating the legislation, albeit "poorly drafted," still entitled the Fed to the merchant interchange fees it had set for debit card swipes

    That setback prompted merchants to file a petition with the U.S. Supreme Court, arguing the high court to take up its … more

  • Google sues MasterCard, Visa for allegedly high merchant interchange fees

    January 14, 2015
    Visa and MasterCard are being sued by Google for charging excessively high merchant interchange rates.

    Google has slammed MasterCard and Visa with a new federal lawsuit, accusing the credit card companies of excessively high and "supracompetitive" merchant interchange fees.

    The complaint alleges that from January 1, 2004, to November 28, 2012, Google was forced to pay a merchant interchange rate considerably higher than "what a competitive market would allow" whenever it accepted payments from MasterCard or Visa cardholders. The tech giant accuses the credit card providers of violating Section 1 of the Sherman Act with its merchant service rates.

    A class action lawsuit had previously been filed against both MasterCard and Visa over debit and credit card merchant fees. That case ended with a settlement of $7.25 billion that was then divided up among the plaintiffs who were forced to pay … more

  • Visa, MasterCard facing more interchange lawsuits

    August 01, 2014
    Visa and MasterCard are facing more merchant interchange fee lawsuits.

    Just when it seemed that the credit card processing fee lawsuits against Visa and MasterCard were coming to an end, the processes is starting again. Previously, a large group of retailers had come together and filed a lawsuit against the card companies over processing fees. A settlement was reached in 2012 and a $5.7 billion final settlement was approved by a judge in December of 2013.

    However, a large portion of the merchants involved in the suit rejected the settlement and pulled out, looking to re-file. Now, according to an article from Bloomberg, Visa and MasterCard are facing more than 30 new suits that have been filed by some of the top merchants in the country including Target, Wal-Mart and Macy's. These suits just overcame their first hurdle, as the card … more

  • AmEx starts trial over interchange fees

    July 14, 2014
    American Express starts trial over interchange fees.

    The legal battles between businesses and credit card companies have mainly seen Visa and MasterCard as the defendants. However, a trial started this week that has American Express defending itself from allegations from the Justice Department that it is trying to stop competition.

    According to an article from Time Money, the battle has been ongoing for nearly four years. The Justice Department originally brought the suit against Visa, MasterCard and American Express in 2010. Visa and MasterCard quickly settled, but AmEx fought.

    The allegations stem from American Express' "take it or leave it" policy. Merchants are required to pay a fee - generally between 2 percent and 3 percent of the total purchase - every time they process a credit transaction. The government claims American Express … more

  • NRF examines swipe fee challenges

    June 25, 2014
    Credit card swipes remain a major problem for many organizations.

    Credit card swipe fees have become a battleground for businesses over the last few years. The Fed had calculated an average cost per transaction of 4 cents with a cap of 21 cents -- according to the Dodd-Frank Consumer Protection and Wall Street Reform Act -- and while that may not seem like a huge number, when you multiply that by hundreds of swipes a day it quickly adds up to something that is more difficult to handle.

    Recently, the National Retail Federation (NRF) posted an article examining the impact that these fees have created over the last few years. Since July 2013, there have been two major legal matters that could have widespread implications when they are eventually settled, both of which we have covered before.

    The first is the ruling last July by U.S. … more

  • Credit card swipe fee settlement again asked for appeal

    June 23, 2014
    Credit card swipe fees continue to be a battleground.

    In December of 2013, U.S. District Judge John Gleeson approved a $5.7 billion settlement that ended eight years of litigation between credit card providers Visa and MasterCard and a number of U.S. merchants over unlawful and excessive credit card swipe and processing fees. However, since then it has been appealed but not yet overturned.

    Last week, according to a press release from the National Retail Federation and the Retail Industry Leaders Association, the two groups have again asked for an appeals court to overturn the ruling.

    NRF Senior Vice President and General Counsel Mallory Duncan said that the initial settlement is not valid because it was only agreed upon by a handful of merchants who were represented in the suit and does not signify the feelings of the retail … more

  • No conspiracy found in big credit card collusion lawsuit

    April 16, 2014
    Most of the merchant credit card processing and interchange litigation that has made waves in the payments industry over the last few months belonged to the merchant interchange fees associated with several banks and the credit card companies MasterCard and Visa. However, there has been another suit involving American Express, Citigroup and Discover that was ruled in the card providers' favor last week.

    According to Reuters, the three credit card issuers had been accused in a lawsuit of colluding to require disputes to be settled in arbitration instead of through class action lawsuits. The incidents in question happened between May 1999 and October 2003, when 10 card-issuing banks and their lawyers met nearly 30 times to discuss imposing mandatory arbitration clauses in … more

  • Walmart files $5 billion lawsuit against Visa/MasterCard

    March 28, 2014
    Walmart has filed a lawsuit against Visa and MasterCard over merchant interchange fees.

    The next big punch has been thrown in the fight between retailers and card providers Visa and MasterCard over merchant interchange rates.

    This particular battle stems from the antitrust lawsuit that has been bounced back and forth for years. The original grievance alleges a "conspiracy" with some of the largest banks to fix fees charged during credit card transactions. In 2012, a $7.25 billion settlement was reached for all merchants that sued. However, roughly 8,000 of them have opted out and appealed because they do not agree with some of the terms and the settlement total has dropped. This has led some companies to file their own lawsuits.

    Today, Walmart joined the ranks, officially filing a $5 billion lawsuit with the U.S. District Court for the Western District of … more

  • Appeals court reverses July swipe fee ruling in favor of banks

    March 27, 2014
    A decision about debit card swipe fees has been overturned.

    The saga of merchant interchange rate regulation took another interesting turn last week, when an appellate court reversed a decision from July regarding rules governing fees banks collect with every debit card swipe.

    First a quick history. In 2011, the Federal Reserve ruled that debit card swipe fees were to be limited to 21 cents per transaction. In July 2013, a U.S. district court sided with a group of retailers and deemed the cap needed to be lowered. On Friday, that ruling was overturned.

    According to an article from Reuters, the decision by the three-member panel U.S. Court of Appeals for the District of Columbia ruled that the Durbin Amendment's ambiguity gave banks the ability to set a higher cap.

    A statement from the panel said that agencies and courts alike do not have … more

  • American Express added to anti-trust settlement appeal

    January 17, 2014
    Appeals are being filed against a recent anti-trust settlement.

    The multi-billion dollar settlement that was reached last month between Visa/MasterCard and a number of U.S. merchants to end years of litigation is already in the appeal process. 

    According to an article from Business Insider, American Express has filed in federal court in Brooklyn, New York to join several trade associations including Wal-Mart, Amazon, 7-Eleven and Barnes and Noble that have already filed an appeal of the decision.

    This all stems from the decision on December 13 by U.S. District Judge John Gleeson. He approved a $5.7 billion settlement that ends eight years of litigation from a lawsuit against credit companies Visa and MasterCard. The allegations are that the card companies were charging unlawful excessive swipe and processing fees.

    Despite … more