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Visa and Mastercard to limit intercharge fees in the US. $30 billion settlement

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Visa and Mastercard have reached an estimated $30 billion settlement to limit credit and debit card fees for merchants, Reuters reported. She added that some of the savings would likely be passed on to consumers due to lower prices. The settlement, which applies only to U.S. sellers, is the result of a lawsuit filed in 2005.

The antitrust settlement of credit card providers Visa and Mastercard is one of the largest in U.S. history and, if approved by the court, would end a legal dispute that has been ongoing since 2005, Reuters pointed out.

Visa and Mastercard reached a $30 billion settlement

He added that merchants have long accused Visa and Mastercard of charging excessive card swipe fees (so-called interchange fees) when customers used credit or debit cards, and of preventing them from steering customers towards cheaper means of payment.

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Under the settlement announced Tuesday, Visa and Mastercard will cut interchange rates by four basis points (0.04 percentage points) in the United States for three years and cap rates for five years, Reuters reported.

The agency added that both suppliers, while agreeing to the settlement, denied committing any wrongdoing.

According to court documents, fee reductions and caps alone are worth $29.79 billion, and Visa estimated that small businesses account for more than 90%. settling traders.

Joseph Stiglitz, a Nobel Prize-winning economist hired by the traders as an expert, said in an affidavit that the settlement “significantly increases sellers' freedom to target customers using the basis of competition – pricing” and could lead to “very significant” savings for merchants.

– Competition between sellers results in these savings being passed on to customers in the form of lower prices – added Stiglitz, quoted by Reuters.

Last March, a federal appeals court in Manhattan upheld a $5.6 billion Visa and Mastercard class action settlement that covered about 12 million merchants. The settlement did not address what types of fees Visa and Mastercard could impose, and not all merchants were covered, Reuters reported.

Main photo source: Shutterstock

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