Visa, MasterCard Offer Retailers “Token” Relief in Antitrust Settlement

Printer-friendly versionPrinter-friendly version

A proposed antitrust settlement announced Tuesday for Visa and Mastercard to reduce “swipe” fees charged to merchants to process credit card transactions would provide “very small relief” and does not end the need for Congress to pass legislation, the Merchants Payments Coalition (MPC) said.

“A few years of very small relief followed by business as usual is not a good outcome from 20 years of litigation,” said Christopher Jones, MPC Executive Committee Member and National Grocers Association Senior Vice President of Government Relations and Counsel. “The settlement does nothing to actually bring competitive market forces to swipe fees or change the behavior of a cartel that centrally fixes rates and bars competition. Instead, it tries to provide token, temporary relief and then allows the card companies to raise rates yet again. Congress needs to act so that we will have real reform that will benefit merchants and their customers.”

As part of the settlement, retailers will be allowed to charge consumers extra at checkout for using Visa or MasterCard and will be able to use pricing tactics to steer customers to lower-cost cards, the article noted. Additionally, Visa and MasterCard agreed to reduce swipe fees by “at least” four basis points (0.04 percent) for at least three years, and the average systems-wide swipe fee for both networks must be at least seven basis points (0.07 percent) below the current average for a period of five years.

“Bookstores should still be reaching out to their Senators and urging a hearing on the Credit Card Competition Act,” said David Grogan, Director of ABFE, Advocacy and Public Policy for the American Booksellers Association. “Make sure your members of congress understand that this settlement does nothing to change the competitive landscape — Visa and MasterCard remain very much a monopoly.”