Credit card swipe fee settlement gains approval

Visa and MasterCard won a years-long court battle on Friday with the approval of a $5.7 billion settlement over credit card swipe fees. 

Merchants, who filed the lawsuit in 2005, have argued that the swipe fees were improperly fixed by the card companies and that the settlement gave them no ability to put up a legal fight in the future.

{mosads}The National Retail Federation (NRF) expressed disappointment about what they called a “deeply flawed settlement” that does nothing to reduce swipe fees or keep them from rising in the future.

“We are reviewing the ruling and will take whatever steps are necessary to protect the rights of merchants and safeguard the pocketbooks of their customers,” said Mallory Duncan, NRF’s senior vice president and general counsel. 

Retailers are expected to appeal the decision. 

U.S. District Judge John Gleeson approved the settlement saying in his rule that it would give retailers the ability to expose hidden fees and help their customers better choose their payment methods.

At a September hearing, NRF wanted the settlement rewritten to do more to bring the fees under control.

But others, while not completely satisfied with the final settlement, were glad to end years of litigation. 

“We are hopeful that today’s court-approved settlement marks the final chapter in what has always been nothing more than a legal battle between two industries over who should pay to support our nation’s incredibly efficient payment system,” said Frank Keating, president and CEO of the American Bankers Association (ABA).  

“It is a highly complex issue that has been settled in the proper venue — our nation’s court system — through a voluntary agreement.”

Credit card swipe fees amount to about $30 billion a year and have tripled in the past 10 years.

“The long political conflict over interchange fees is finally over, settled by a well-established legal process, which brought together retailers and the card industry for a negotiated resolution,” said Sam Fabens, a spokesman for the Electronic Payments Coalition, in a statement. 

The group represents financial institutions and payment card networks that move money.

“This settlement is in the best interest of all involved parties and that has been proven today with the court’s final approval.”