Judge Suggests Visa and Mastercard Can Afford More Than $30 Billion Settlement
- A judge has declared that the proposed $30 billion settlement between Visa, Mastercard, and merchants is insufficient.
- The judge believes that Visa and Mastercard can manage a significantly higher payment.
- This decision could lead to a revised settlement that may impact the financial landscape.
A federal judge has indicated that Visa and Mastercard may be able to handle a significantly larger settlement with merchants regarding swipe fees than the $30 billion proposal she recently rejected. This settlement aimed to reduce and cap interchange fees, which are paid by over 12 million merchants for processing transactions with the two card issuers. The ongoing antitrust litigation, which began in 2005, may proceed to trial if the parties cannot reach a new agreement that meets the judge's approval. In response to the ruling, Visa expressed disappointment but emphasized its commitment to finding a direct resolution with merchants. The company highlighted the importance of maintaining a secure and innovative payments ecosystem that benefits American consumers and small businesses. Visa's statement underscored its focus on delivering value and ensuring access to credit in a competitive market. Mastercard also voiced its disappointment, stating that the rejected settlement was the result of extensive negotiations and was expected to provide significant benefits to business owners. The company argued that the agreement would have ensured consumer protections while fostering competition and innovation within the payments industry. Mastercard reiterated its commitment to resolving the matter and continuing to compete effectively in the market. The rejected settlement proposed a modest reduction in swipe fees, which typically range from 1.5% to 3.5%, and included provisions for capping fees and allowing merchants to impose surcharges. However, many merchants and trade groups, including the National Retail Federation, opposed the settlement, leading to the current impasse.