The U.S. Supreme Court declined to hear appeals from Visa and MasterCard, letting stand a lower court ruling that said retailers would not have to pay a $5.7 billion settlement to the credit card companies over swipe fees.
The initial settlement, one of the largest in the country, was approved by Judge Gleeson of the Eastern District of New York in December 2013 over the objections of thousands of retailers, including the National Association of Convenience Stores (NACS), Food Marketing Institute, Merchant Advisory Group, National Restaurant Association, National Retail Federation, and the Retail Industry Leaders Association
Accepting the settlement would have ended the case for retailers and, subsequently, permitted Visa, MasterCard and the banks to continue to price-fix swipe fees, using rules to block competition in the payment card market.
NACS officials said that the Supreme Court’s decision ensures that retailers will continue to be able to challenge the card networks’ price fixing of credit card fees.
Retail trade associations are urging Congress not to repeal debit card swipe fee reforms. A delegation of representatives from the various associations went to Capitol Hill in February to tell legislators that the reforms have introduced competition and transparency into a market.
“By repealing debit swipe fee reform, Congress is standing with card companies and big banks on the backs of Main Street retailers,” Austen Jensen, vice president of Financial Services for the Retail Industry Leaders Association, said. “These reforms have saved retailers and our consumers billions. Repealing these reforms would harm merchants and our customers. The electorate has spoken and they do not want to bailout big banks for providing another bonus check for Wall Street.”
A repeal would mark a return to anti-competitive practices that cost retailers and their customers billions of dollars a year, Mallory Duncan, senior vice president of and general counsel for the National Retail Federation, said.
“If that happens, the fees will go nowhere but up and the opportunity for competition will be lost. Retailers are on Capitol Hill today to tell lawmakers that debit reform needs to be preserved for the sake of American consumers and our nation’s economy,” Duncan said.