Posts Tagged ‘settlement’

American Express Follows Visa and MasterCard in Allowing a Surcharge on Credit Card Transactions

Thursday, February 20th, 2014

The U.S. District Court in Brooklyn, New York, made history last December by approving on a final basis, the largest anti-trust class action lawsuit ever filed.  That record breaking lawsuit was the culmination of several suits filed by a number of parties against Visa and MasterCard, which suits were eventually combined into a class action suit.  Among other things, the class action suit against Visa and MasterCard claimed an anti-trust violation of the two card companies, and several issuing banks, by their purported collective efforts to artificially set interchange fees.  When a merchant accepts a credit card as a form of payment for goods or services, that merchant is often charged a fee by the underlying credit card company, which fee is a percentage of the total amount charged.  This is called an interchange fee.  That interchange fee has historically been 1-3% of the transaction.

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An Historical Primer to the Largest Anti-Trust Settlement in History and the Changes That Will Affect Credit Card Companies

Friday, October 19th, 2012

In 2011, VISA and MasterCard accounted for more than 80% of United States credit and debit purchases. Despite the frequency with which customers use credit cards as a method of payment, certain policies implemented by credit card companies have made vendors reluctant to accept this form of payment. Traditionally, credit card companies have prohibited vendors from surcharging customers who use their cards. This places the burden on vendors to absorb interchange or “swipe fees.” Interchange fees, which are between 1% and 3% of the overall purchase, are incurred every time a vendor processes a credit card transaction, which amounts annually to roughly $40 billion to VISA to MasterCard.
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