Visa, MasterCard and a number of US banks will pay retailers $6.2 billion

Visa, MasterCard and a number of US banks will pay retailers $6.2 billion

24.09.2018 08:00
  1416
Ukrainian Retail Association

Visa Inc., MasterCard Inc. and a number of American financial institutions will pay a total of about $6.2 billion to settle the largest cash claim in the antitrust proceedings.

The agreement concerns an old case, in which retailers accused payment systems, as well as banks that issue plastic cards, in overcharging of the fees charged from them, according to the portal Finmarket.

Visa, MasterCard, as well as several banks, including JPMorgan Chase, Bank of America and Citigroup, will pay retailers, according to the agreement, an additional $900 million besides to the $ 5.3 billion stipulated in the previous agreement, which was concluded in 2012.

The payout $ 600 million will have Visa, from the amount $900 million, MasterCard – $108 million. Both companies have reserved the necessary funds to cover potential costs in June this year, when it approached an agreement with retailers.

“We are happy to finally reach, after several years of meaningful negotiations, an agreement and move forward in partnership with sellers to provide consumers with convenient, reliable and safe payment methods”, –  it says in the Visa press-release.

The Visa payouts total amount will be in this case $4.1 billion. MasterCard part will be for about 12% from the payouts’ total amount.

“We are taking an important step toward completing the chapter in this long trial – it says in MasterCard statement. Now we can leave it behind and focus on promoting of innovation together with our partner-retailers to ensure the convenience of payments that our customers are waiting for”.

The dispute concerned the amount of interbank commissions established by payment systems, which retailers remand to banks when their customers pay for purchases using bank cards. Retailers accused payment systems and banks in collusion with the aim of these commissions overstating.

For the first time, retailers filed a cash claim against Visa, MasterCard and the largest issuing-bank of plastic cards in 2005. The court decision on this problem, which provided for payout by the payment systems and banks of the amount $7.25 billion, was taken in 2012. Later, this amount decreased, because many of the retailers refused to participate in the claim.

The fact that a number of large retailers expressed disagreement with the court decision, provoked new proceedings.

Source: Finmarket

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