Visa, MasterCard in $6B settlement over card fees

NEW YORK (AP) -- Visa, MasterCard and major banks agreed to pay retailers at least $6 billion to settle a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. As part of the settlement, announced late Friday, stores from Rite Aid to Kroger will be allowed to charge customers more if they pay using a credit card.

The pact, which is being called by lawyers involved in the case the largest antitrust settlement in U.S. history, is seen as a major victory for merchants that have long complained about the billions of dollars in so-called "swipe'' or "interchange'' fees that they pay to banks for each purchase made using plastic. But at a time when shoppers increasingly are using credit and debit cards, merchants will face a dilemma: Whether to charge shoppers extra for using plastic, and if so, how to do so without angering them.

Marilyn Landis, who was last year's chairman of the National Small Business Association, said that the settlement is a victory for small businesses across America because it could ultimately lead to banks lowering the fees they charge stores for customers' credit card purchases.

Landis, who owns Pittsburgh-based financial services firm Basic Business Concepts, said that would be a big relief. She's now paying 3.75 percent each time a customer pays with a credit card. If bank card companies reduce the fees they charge her to 2.75 percent, she would save a dollar on every $100 in sales.

"That's huge,'' she said.

According to the National Retail Federation, America's largest retail group, swipe fees cost merchants about $30 billion per year. Mallory Duncan, senior vice president and general counsel for the group, said the settlement is a step in the right direction.

"What we need are changes in the rules that bring about transparency and competition that would be here for years to come,'' he said.

The dispute between stores and banks dates back to 2005. That's when large retailers, including Kroger Co., Safeway Inc. and Walgreen Co. began filing price-fixing lawsuits against Visa, MasterCard and other banks.

The retailers claimed the credit card issuers worked together to fix the fees that stores pay to accept credit and debit cards. The fees, which vary depending on the type of store and the type of card issues, average about 2 percent of the price of a purchase.

Visa and MasterCard make money on the fees that stores pay for each customer that uses credit or debit cards for their purchases. The fees are set by card processing networks but collected by, and split with, the banks that issue the cards.

The card companies long have defended the fees they charge stores. They say stores benefit from being able to accept credit and debit cards from customers, who often spend more when they're using plastic instead of cash or checks.

Retailers fought to charge customers who use plastic for their purchases extra. They've argued that the ability to charge customers who use plastic more for their purchases would reduce their costs for accepting the cards.

But up until now, Visa and MasterCard have banned stores from charging customers who use credit cards more. Merchants, however, have been allowed to offer customers discounts if they pay with cash. Some gas stations do this, for example.

As part of the settlement, credit card companies have agreed to reduce swipe fees for eight months. The temporary reprieve on fees is valued at $1.2 billion. The settlement does not apply to debit cards, which have grown in popularity for small-value transactions.

"These new rules will give merchants the tools they need to put pressure on the credit card networks to lower interchange or swipe fees, which are the second-or third-highest cost of doing business for many retailers,'' said Patrick J. Coughlin, senior trial counsel at Robbins Geller Rudman & Dowd LLP, and one of the lawyers for the plaintiffs.

Noah Hanft, MasterCard's general counsel, said in a statement on Friday that the decision to settle ``was based on our belief that MasterCard and our stakeholders are best served by an amicable resolution.''

"Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases,'' he said. "We believe that today's settlements should resolve all issues with the merchant community.''

Visa and MasterCard stock both jumped in after-hours trading. Visa climbed 2.8 percent, and MasterCard rose 3.7 percent.

 <한글기사> 

비자.마스타카드 등, 카드수수료 분쟁 합의

비자, 마스타카드와 중요 은행들은 13일 소매인들이 제기한 소송의 합의금으로 최소한 60억 달러를 지불하기로 합의했다.
이번 소송에 관여한 변호사들은 이 같은 합의금은 반 트러스트 소송과 관련한 역사상 최대 규모의 합의금이라고 말했다. 
이번 소송은 지난 2005년으로 거슬러 올라가는 데 소매인들은 비자, 마스터카드와 은행들이 카드 수수료를 공모했다고 주장하고 소송을 제기했었다. 미국에서 카드수수료는 거래액의 평균 2%이다.
이번 소송에서 대부분의 중요 은행이 피고가 됐다.