Retailers and their trade organizations urged an appeals court on Monday to overturn a judge’s approval of a settlement over Visa and MasterCard’s interchange—or swipe—fees, saying the settlement would not achieve its intended purpose.
“The truth is that there is no settlement with the retail industry, only an agreement with a handful of merchants who do not represent the industry as a whole,” National Retail Federation (NRF) Senior Vice President and General Counsel Mallory Duncan said. “Given that the judge knew this backroom deal was opposed by a broad range of small and large retailers alike and allows these fees to continue to skyrocket, it clearly should never have been approved. This is a serious mistake the appellate court needs to correct.”
Merchants first sued Visa and MasterCard in 2005, and a settlement deal was reached in 2012, but thousands of merchants dropped out of the suit. The deal shrank from the initial $7.2 billion to $5.7 billion, International Business Times reports.
According to retailers, the settlement would not adequately reimburse merchants, and retailers would be prohibited from filing future cases over fees in the future.
Swipe fees are charged by banks to merchants to cover the costs of processing credit card purchases—according to the NRF, they average approximately two percent of the transaction but have tripled over the past 10 years.