National Grocers Association Staunchly Opposes Visa, Mastercard Settlement
The National Grocers Association, along with Wal-Mart Stores Inc. and Target Corp., are raising their voices in concern over the pending $7.25 billion settlement Visa, Mastercard and a slew of big banks are expected to payout to the plaintiffs in the case.
Settlement Doesn’t Add Up
The NGA asserts that little is accomplished in affecting the anticompetitive claims put forth by the prosecution and the settlement’s monetary compensation only covers a fraction of the $350 billion worth of swipe fees the processing giants have collected since the lawsuit was filed in 2005.
“This proposed settlement agreement fails in this regard by allowing Visa and MasterCard to continue their dominant anti-competitive practices,” NGA President and CEO Peter Larkin, said. “Meanwhile, merchants and consumers will continue to pay exorbitant swipe fees with no hope of reform. NGA’s members are also concerned about Visa and MasterCard’s ability to use their dominance to prevent emerging and innovative lower cost payment options.”
Unfair Terms of Settlement
One aspect of the settlement that’s been embraced by merchants is the allowance to pass swipe fees onto consumers, though there are 10 pages worth of restrictions in the settlement’s terms, which the NGA fears will hinder their ability to implement this provision. Both Visa and Mastercard are accused of collusion for barring the practice of passing fees onto consumers, which ultimately led to the formation of this anti-competitive lawsuit.
“This agreement only ensures that the card companies will continue to fix hidden swipe fees and be able to increase them at will for years to come,” Larkin added.