After nearly two decades of legal tussle, Visa has
reached a settlement with U.S. merchants to
reduce credit interchange rates and cap these rates until 2030. According to the press release, this reduction in fees
results in substantial savings for the merchants, predominantly small businesses, by enhancing their competitiveness
in the market.
Besides that, the payment giant has assured merchants
that it will not increase interchange fees for at least five years. This move
aims to enhance stability, allowing merchants to plan their finances.
Kimberly Lawrence, Visa‘s President for North America,
mentioned: “By negotiating directly with merchants, we have reached a
settlement with meaningful concessions that address true pain points small
businesses have identified.”
“Importantly, we are making these concessions
while also maintaining the safety, security, innovation, protections, rewards,
and access to credit that are so important to millions of Americans and to our
economy.”
Visa, Mastercard and the largest U.S. credit-card issuing banks agree to a settlement with merchants that have been suing them over the fees they charge for swiping credit cards https://t.co/VgD9SOqzHi https://t.co/VgD9SOqzHi
— The Wall Street Journal (@WSJ) March 26, 2024
In addition to the reduction of rates and caps, the agreement
gives merchants the option to steer customers toward preferred payment methods.
The settlement is subject to approval by the court.
Merchants Target Payment Giants
Recently, American Express was slapped with a class-action
lawsuit filed by ten U.S. merchants in Rhode Island federal court. The suit
alleged that the company has been overcharging thousands of merchants credit and debit card fees for consumer transactions across
the country, Reuters
reported.
Specifically, the lawsuit claimed that American Express
inhibits competition through its rules, which hinder merchants from offering
discounts, surcharges, or other incentives to steer customers toward cheaper
payment options.
Unlike Visa and Mastercard, which abandoned their
restrictive rules by the end of 2013, American Express has continued to enforce
policies that allegedly stifle competition in the payment card market.
Meanwhile, a similar litigation involving Mastercard is ongoing.
After nearly two decades of legal tussle, Visa has
reached a settlement with U.S. merchants to
reduce credit interchange rates and cap these rates until 2030. According to the press release, this reduction in fees
results in substantial savings for the merchants, predominantly small businesses, by enhancing their competitiveness
in the market.
Besides that, the payment giant has assured merchants
that it will not increase interchange fees for at least five years. This move
aims to enhance stability, allowing merchants to plan their finances.
Kimberly Lawrence, Visa‘s President for North America,
mentioned: “By negotiating directly with merchants, we have reached a
settlement with meaningful concessions that address true pain points small
businesses have identified.”
“Importantly, we are making these concessions
while also maintaining the safety, security, innovation, protections, rewards,
and access to credit that are so important to millions of Americans and to our
economy.”
Visa, Mastercard and the largest U.S. credit-card issuing banks agree to a settlement with merchants that have been suing them over the fees they charge for swiping credit cards https://t.co/VgD9SOqzHi https://t.co/VgD9SOqzHi
— The Wall Street Journal (@WSJ) March 26, 2024
In addition to the reduction of rates and caps, the agreement
gives merchants the option to steer customers toward preferred payment methods.
The settlement is subject to approval by the court.
Merchants Target Payment Giants
Recently, American Express was slapped with a class-action
lawsuit filed by ten U.S. merchants in Rhode Island federal court. The suit
alleged that the company has been overcharging thousands of merchants credit and debit card fees for consumer transactions across
the country, Reuters
reported.
Specifically, the lawsuit claimed that American Express
inhibits competition through its rules, which hinder merchants from offering
discounts, surcharges, or other incentives to steer customers toward cheaper
payment options.
Unlike Visa and Mastercard, which abandoned their
restrictive rules by the end of 2013, American Express has continued to enforce
policies that allegedly stifle competition in the payment card market.
Meanwhile, a similar litigation involving Mastercard is ongoing.
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- Source: https://www.financemagnates.com//fintech/visa-strikes-deal-with-us-merchants-to-cap-interchange-rates-for-five-years/
