The stakes are high – $90 billion in fees paid collectively by merchants each year, according to Bloomberg. The proposed class action settlement amount is record-breaking – $6.2 billion, the most significant dollar amount ever, to be paid to 12 million merchants who do not opt-out of the settlement.
What does this mean for the future of interchange fees? It’s still murky, at best.
A lawsuit that was being argued since 2005 was finally settled on September 18, 2018, some 13 years later. The class action was initially filed by the National Retail Federation, the Retail Industry Leaders Association, and the National Association of Convenience Stores, collectively representing about 12 million merchants in the U.S. It named Visa, Mastercard, and several large issuers, including JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. as Defendants. The suit accuses the defendants of conspiring to fix interchange fees that businesses pay to process credit and debit cards. A previous settlement had been reached in 2012 but was thrown out by the courts. This time around, the settlement, which still needs to be approved by the courts, leaves open several unanswered issues.
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