Wal-Mart opposes proposed settlement on credit card fees
NEW YORK, July 24 |
NEW YORK, July 24 (Reuters) - Wal-Mart Stores Inc, the world's largest retailer, on Tuesday joined the growing chorus of merchants opposed to a proposed settlement with Visa Inc. and MasterCard Inc over credit card fees.
Wal-Mart said the $7.25 billion settlement would not change a "broken" system of what credit card companies charge retailers for processing credit and debit card payments, known as "swipe fees."
"The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year," the company said in a statement.
The class-action settlement between retailers and the two biggest credit card companies, which is subject to court approval, is intended to resolve stores' claims that Visa and MasterCard conspired with major banks to fix swipe fees.
The settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country's largest banks who issue the companies' cards. The card companies also agreed to reduce swipe fees for eight months, for a total consideration to stores valued at about $1.2 billion.
In addition, the deal would allow stores to start charging so-called checkout fees to customers who pay with MasterCard or Visa credit and debit cards.
Wal-Mart said the settlement would constrain innovation in payments and force retailers to broadly waive their rights to take action against the credit card networks for "detrimental conduct or acts."
Among those that have come out against the settlement, reached earlier this month, are the National Association of Convenience Stores and Wal-Mart rival Target Corp.
It will be up to U.S. District Court Judge John Gleeson to approve or reject the settlement, a process that will play out in Brooklyn federal court over the next few months.
The case is In re Payment Interchange Fee and Merchant Discount Antitrust Litigation, in the U.S. District Court for the Eastern District of New York, No. 05-1720.
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