|Visa, MasterCard to pay US$6bn compensation|
|Saturday, 14 July 2012 23:34|
Visa agreed to pay US$4,03 billion to settle the class-action lawsuit. MasterCard and banks that issue cards and were also part of the suit will pay US$2,02 billion, according to documents filed in federal court in New York on Friday.
The two will also have to cut their so-called “swipe” fees for eight months that could give the merchants another US$1,2 billion in relief. And they will have to allow merchants to impose a surcharge on credit card transactions, subject to a cap.
Also involved in the settlement are card-issuing banks including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One and others.
“Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn, will result in lower prices for all consumers.”
But in a reaction, American Bankers’ Association president Frank Keating blasted the idea that consumers will benefit from the deal.
“This settlement even provides merchants with the ability to impose ‘checkout fees’ on customers just for using credit cards.”
The proposal provides for extensive litigation releases that would keep stores that join the settlement from suing over a wide range of issues relating to fees and anti-steering restraints. — Al Jazeera.