Visa, MasterCard reach settlement over swipe fees

Merchants had accused them of violating antitrust laws

Visa Inc and MasterCard Inc agreed to pay as much as $6.2 billion (Dh22.7 billion) to end a longrunning price-fixing case brought by merchants over card fees, the largest-ever class action settlement of an antitrust case.

The two card companies will pay between $5.54 billion and $6.24 billion to settle the claims, according to a filing yesterday. Visa and MasterCard had previously set aside $5.3 billion with the court to settle the claims. Earlier this year, as the two sides drew closer to an agreement, they put aside an additional $900 million to help cover the settlement amount.

“After years of thoughtful negotiation, we are pleased to be able to reach this agreement and move forward in our partnership with merchants to provide consumers convenient, reliable, secure ways to pay,” Kelly Mahon Tullier, Visa’s general counsel, said in a statement.

Flashpoints

As part of the payment, Visa and MasterCard will use shares owned by banks including JPMorgan Chase & Co, Citigroup Inc and Bank of America Corp. The lawsuit is one of many flashpoints in the battle between retailers and financial firms over the $90 billion that US merchants spend every year on swipe fees.

The dispute began in 2005, when Visa and MasterCard were still owned by banks. Merchants had accused them of violating antitrust laws by illegally inflating swipe fees, or interchange, that merchants pay on every purchase transaction and which banks use to fund consumers’ credit-card rewards.