Interchange Class Action Lawsuit

Most business owners are aware of the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. It has been a long road, but things are finally starting to come together.

This case has been brought on behalf of merchants who are representing all merchants in the class-action suit. On Friday, January 3, 2020, the final approval order was filed with the court.

The lawsuit brings forth claims that merchants paid excessive fees to be able to accept payments from Visa, MasterCard, and other Network Defendants*. The settlement claims the defendants had violated antitrust laws.

The settlement creates the following Rule 23(b)(3) Settlement Class: All persons, businesses, and other entities that have accepted any Visa-branded Cards and/or Mastercard-Branded Cards in the United States at any time from January 1, 2004, to January 25, 2019, except that the Rule 23(b)(3) Settlement Class shall not include (a) the Dismissed Plaintiffs, (b) the United States government, (c) the named Defendants in this Action or their directors, officers, or members of their families, or (d) financial institutions that have issued Visa-branded Cards or Mastercard-Branded Cards or acquired Visa-branded Card transactions or Mastercard- Branded Card transactions at any time from January 1, 2004, to January 25, 2019.

What is this lawsuit about?

Merchants that accepted Visa or Mastercard credit or debit cards between January 1, 2004, and January 25, 2019, claim that Visa and its member banks violated the law because they set the interchange fees and because they imposed and enforced rules that limited merchants from steering their customers to other payment methods.

Those rules include; so-called no-surcharge rules, no-discounting rules, honor-all-cards rules, and certain other rules. Doing so protected them from competitive pressure to lower the interchange fees.

It is reported Visa and Mastercard conspired together about continuing in those activities despite the fact that both Visa and MasterCard* changed its corporate structure to become a publicly owned corporation after this case was filed.

The Defendants state they have done nothing wrong, that their business practices are legal, justified, the result of independent competition and have benefitted merchants and consumers. However; their unjust conduct has had the effect of forcing merchants to overpay their interchange fees. Had they not acted upon these allegations, those fees would have been lower.

What is an interchange fee?

When a purchase is made with a credit or debit card, there is an interchange fee tied to those transactions, which is usually around 1% to 2% of the purchase price. Interchange fees are typically the largest portion of fees paid monthly by merchants and are set by the card issuers.

Why is there a settlement?

Both sides agreed to settle the case after 13 years of litigation. After mediation and negotiations, it was agreed up to settle outside of court and avoid the expense and time that a trial and the appeals that would follow.

How much money will be provided in this settlement?

Visa, Mastercard, and the Network Defendants* have agreed to provide $6 billion to merchants that wanted to be a part of the settlement. Those who chose to exclude themself from the settlement will not receive any compensation.

How do I get my share of the money from the settlement?

You need to file a claim to get money from this Settlement. You should have received a claim form in the mail or by email. You can register by clicking this link.

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Network Defendants:

“Visa”: Visa U.S.A. Inc., Visa International Service Association, and Visa Inc.; and

“Mastercard”: Mastercard International Incorporated and Mastercard Incorporated; and

Bank Defendants: Bank of America, N.A.; BA Merchant Services LLC (formerly known as National Processing, Inc.); Bank of America Corporation; Barclays Bank plc; Barclays Delaware Holdings, LLC (formerly known as Juniper Financial Corporation); Barclays Bank Delaware (formerly known as Juniper Bank); Barclays Financial Corp.; Capital One Bank (USA), N.A.; Capital One F.S.B.; Capital One Financial Corporation; Chase Bank USA, N.A. (and as successor to Chase Manhattan Bank USA, N.A. and Bank One, Delaware, N.A.); Paymentech, LLC (and as successor to Chase Paymentech Solutions, LLC); JPMorgan Chase & Co. (and as successor to Bank One Corporation); JPMorgan Chase Bank, N.A. (and as successor to Washington Mutual Bank); Citibank, N.A.; Citigroup Inc.; Citicorp; Fifth Third Bancorp; First National Bank of Omaha; HSBC Finance Corporation; HSBC Bank USA, N.A.; HSBC North America Holdings Inc.; HSBC Holdings plc; HSBC Bank plc; The PNC Financial Services Group, Inc. (and as acquirer of National City Corporation); National City Corporation; National City Bank of Kentucky; SunTrust Banks, Inc.; SunTrust Bank; Texas Independent Bancshares, Inc.; and Wells Fargo & Company (and as successor to Wachovia Corporation).