The card companies Visa and Mastercard have just reached an agreement after a class action lawsuit for fees and alleged monopolistic practices, filed by retailers.
These companies were accused of conspiring to set high “swipe fees” for payment processing and imposing rules that prevented merchants from directing customers to alternative payment methods. Such fees generally ranged between 1% and 2% of the purchase price, which put upward pressure on costs for complainants.
The case, known throughout as “In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL No. 1720 (MKB) (JO),” was initially filed in U.S. District Court for the Eastern District of New York. This class action lawsuit, filed in 2005, was finally resolved in March 2023, after a series of complex litigation and challenges.
Antitrust Lawsuit Against Visa and Mastercard
If you used Mastercard or Visa debit or credit cards at any time between January 1, 2004 and January 25, 2019, you may be eligible to recover money charged by the companies and their banks after the fees set by the companies of cards mentioned.
Filing a claim is the only way to receive money from the card payment settlement. Claim forms were mailed to merchants in December 2023, containing a claimant ID and control number.
However, you still have a chance to join as a claimant, since the Payment Card Interchange Fee Agreement does not require you to have a claimant ID or control number.
The settlement administrator and class attorneys are available at no charge to assist during the claims filing period. Claim forms are available to complete and submit on the settlement website: https://www.paymentcardsettlement.com/en.
Visa, Mastercard Class Action Lawsuit Is Accepting Claims
As of today, the class action settlement administrator is accepting claims from affected individuals, and the deadline has been set for August 30, 2024.
The period that the plaintiffs allege as affected covers from January 1, 2004 to January 25, 2019. July 23, 2019 was the deadline for interested parties to exclude themselves from the agreement, as well as the final deadline to submit objections. Subsequently, on December 16, 2019, the District Court granted final approval to the agreement.
In the appeal process, oral argument regarding the final approval order was held on March 16, 2022. Finally, on March 15, 2023, the Second Circuit issued its opinion.
Summary of important dates
- Class Action Date Period: from January 1, 2004 to January 25, 2019.
- July 23, 2019: The deadline to opt out of the agreement has passed.
- July 23, 2019: The deadline to file objections to the agreement has passed.
- December 16, 2019: The District Court granted final approval to the agreement.
- March 16, 2022: Oral argument on appeal of the final approval order.
- March 15, 2023: The opinion of the Second Circuit is issued.
- August 30, 2024: Deadline to file claims.
What Are the “Swipe Frees” and How Does Visa, Mastercard Decide How Much to Charge?
Transaction fees, known as “swipe fees”, are costs that for the swipe of the credit or debit card that are determined by companies such as Visa or Mastercard through a process that considers several factors.
Card swiping is, therefore, the act of swiping the card through the POS device to pay for a purchase or a service. These costs are divided into various categories according to the type of card and transaction.
All international card companies constantly review how much to charge for swiping and can adjust them according to market conditions, competition, government regulation, and other elements.
In some countries, sliding fees are subject to government regulations. For example, in the European Union, interchange fees for cross-border transactions are limited by law. These regulations seek to balance the costs for merchants and protect consumers.
The volume of transactions of each retailer also matters, and if they are large companies such as Costco, Walmart, or others of the same level, they can negotiate lower sliding fees. Small companies, with a lower volume of transactions, usually pay higher fees.