Visa and Mastercard could see their proposed $30bn settlement thrown out in the antitrust case currently being carried out in the US. This huge proposal was made to provide what the card networks see as a fair settlement that would settle the country-wide claims made by merchants.
Visa and Mastercard $30bn Settlement Proposal To Be Rejected
The case arose when businesses complained that Visa and Mastercard were charging them excessive fees when they processed credit or debit card payments for customers. These included swipe fees and interchange fees. The complaint was also based on the merchants being unable to guide their customers towards cheaper ways of paying.
The latest twist came when Brooklyn-based US District Judge Margo Brodie said during a hearing on Thursday that she now considers it unlikely that she will approve the potential settlement. The judge’s full decision and the reasoning for this decision are set to be laid out in writing shortly.
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Both card issuers said that they were disappointed with the decision and felt that their proposal would have been a fair way to close a case that has now been running for almost two decades. Their suggested settlement was to include reducing the average swipe fee by 0.04% or more and capping their rates for the next five years.
However, the National Retail Federation called this solution insufficient and meagre. When Visa and Mastercard announced the details in March this year, Jeff Brabant of the National Federation of Independent Business said:
As long as the credit card networks, Visa and MasterCard, get to set the interchange rates for every bank that issues a credit card, anti-competitive pricing will remain, and small businesses will continue to pay artificially high rates.
