Lawsuits against Mastercard and Visa

Tuesday, September 10, 2013

Lawsuits against Mastercard and Visa

For monopolizing the credit card industry

In 1996, a compilation of merchants gathered a class action lawsuit against Mastercard and Visa Associations. These merchants contended that Mastercard and Visa were using the offline debit transactions for higher rates than the online transactions. They also state that the card companies were forcing them to accept the debit transactions at a higher rate than the credit transactions

Image credit: bloomua / 123RF Stock Photo

The merchants fear that Mastercard and Visa have pulled together to dominate the Point of Sale (POS) debit card market. Making it dangerous and hindering competition with other card services. 


Mastercard believes that the case is frolicsome at best and informs the public that the goal of the merchants is to undermine the ‘Honor all cards’ rule as well as the anti- trust laws that exist to enhance the consumer’s ability to choose how they want to pay. Mastercard believes that if this lawsuit is bound and ties up their hands, it will destroy the client’s ability to have low fees and the choices they crave for payments. 


Visa is surprisingly mum on their opinion of the lawsuit. Although, they are quoted as being terribly upset over a new suit from the UK merchants and have every intention of fighting the suit to the full extent of the law. Their website has no details on the final monetary amount for the class action lawsuit and nothing in their blog that comes to light. 

Whether that means they are brushing it under the carpet or not, one wonders why they aren’t detailing their opinions and letting their consumers and merchants know what is going on. 

Walmart’s position on the lawsuit

In July of 2012, Wal-Mart rejected the payout by Visa and Mastercard. Wal-Mart said adding, “That it urges all merchants to put consumers first and reject the settlement.” 

With a giant like Wal-Mart backing consumer interests, one wonders how broken the system truly is? And with this ongoing, how far will they continue to fix the system?

The courts decision

In a settlement of outstanding amounts, Visa and Mastercard agreed to a $7 Billion payout to merchants that will stop a seven year court case and conflict with merchants. It also includes a $6.05 Billion payment to over seven million merchants for past damages and gives a brief reduction in the interchange fees that have been valued at $1.2 Billion.

The second half of the suit contends that $1.2 Billion will be paid out for the interchange fund at one tenth of 1% of the merchants during the eight month period beginning in July of 2013.  

 2013 and the current issues

Even with a decade old lawsuit at its final hours, Wal-Mart is still after Visa and Mastercard. It has indicated that it will seek another lawsuit over the same conduct. Visa is at its wit’s end and has filed against Wal-Mart asking the courts to relieve them of the frivolous and unending lawsuits by the retail giant. 

Visa is quoted as saying, “Wal-Mart has opted out of the settlement and has publicly opposed and denigrated the swap settlement at every opportunity, apparently preferring to remain litigating with Visa, seemingly forever. Upon information and belief, Wal-Mart intends to bring a third lawsuit for the alleged antitrust violations against Visa, continuing seventeen years of seriatim litigation over the same issues.”

Author Bio:

Blair Thomas is an electronic payment expert, who loves all things finance and planning.  He is also the co-founder of, the #1 high risk credit card processing company in the country. But when he’s not running his business he’s exploring his other passions; mountain biking and camping.  If you would like to see what he's up to, “like” on Facebook.

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