MasterCard, Visa, and major banks including Bank of America, Chase, Citibank, and JP Morgan Chase, have offered to settle a class action, In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The plaintiff class is composed of merchants who claimed that the defendants were unlawfully fixing interchange fees and engaging in other anticompetitive payments practices. Merchants were contractually prohibited from charging customers who paid with credit cards higher prices than those who paid in cash or checks.
The settlement calls for MasterCard, Visa, and the banks paying $6 billion, of which the card companies will be paying $5.2 billion. The card companies will further reduce transaction fees for credit card purchases for eight months, a fee reprieve estimated at $1.2 billion. Stores suing individually will receive an additional settlement of $525 million. The settlement is awaiting court approval.
Download the proposed settlement here.