Four major merchant associations said Monday that they have filed an antitrust lawsuit against Visa, MasterCard and banks that issues credit cards. The suit alleges that some banks and credit card companies are engaging in “collusive practices” by setting credit-card interchange fees at high levels.
Interchange fees are the fees that banks charge retail businesses for credit card transactions. Mitch Goldstone of 30 Minute Photos, Etc., the lead plaintiff in an earlier class action suit against Visa, MasterCard and banks that issue the credit cards, said a suit filed Monday by the retailing groups will likley be combined with his case.
The lawsuit was filed by the National Association of Chain Drug Stores, the National Association of Convenience Stores, the National Community Pharmacists Association, and the National Cooperative Grocers Association.
The plaintiffs said they would seek damages and injunctive relief to stop the alleged anticompetitive practices. Visa on Monday said its remains “confident” in its ability to defend interchange fees.
Visa said interchange fees are a “fair mechanism for fueling growth and sharing system cost” and that the fees charged to merchants for credit card transactions have been upheld as legal in federal court.
“While we respect that businesses want to find ways to lower their normal costs of doing business, merchants have many options to improve their economics that do not include costly and time-consuming litigation,” Visa said.
In a statement, MasterCard said the latest suit is “without merit.” Interchange fees topped the “risks” section of MasterCard’s recent initial public offering prospectus filed with regulators on Sept.
“This could reduce the number of financial institutions willing to participate in a four-party payment card system, lower overall transaction volumes, and/or make proprietary end-to-end networks or other forms of payment more attractive.”
“Issuers could also charge higher fees to consumers, thereby making our card programs less desirable and reducing our transaction volumes and profitability, or attempt to decrease the expense of their card programs by seeking a reduction in the fees that we charge.”
“If we are less successful than Visa in defending interchange fees, we could also be competitively disadvantaged against Visa. If we are ultimately unsuccessful in our defense of interchange fees, such regulation may have a material adverse impact on our revenue, our prospects for future growth, and our overall business.”