Settlements were reached during the past week with Visa and MasterCard in a federal antitrust lawsuit filed more than six years ago by nearly two dozen U.S. marketers and the National Retail Federation (NRF) over their debit-card practices.
The suit alleged that Visa and MasterCard were violating federal antitrust law by forcing retailers to accept an “honor all cards” policy. Under such a policy, Visa insisted that retailers that accepted Visa credit cards also accept Visa Check debit cards, and that merchants that accepted MasterCard credit cards also accept Master Money debit cards. The merchants objected to the cards because they carry higher transaction fees than independent bank debit cards when consumers sign for transactions rather than using PIN numbers.
“The difference now is that retailers will pay much lower transaction fees,” said NRF senior vice president/general counsel Mallory Duncan. “That’s a victory for both retailers and consumers because high fees have driven up the price of every product sold.” Visa and MasterCard have charged merchants more than $1 extra on every $100 spent whenever a debit card user signed for a purchase, Duncan points out. The settlement will eliminate the extra charge.