According to AS, Mastercard and Visa recently reached a settlement in a class action lawsuit alleging that these global payment leaders violated antitrust laws to exploit merchants. The lawsuit claimed that millions of businesses were compelled to incur high fees for processing transactions with Visa or Mastercard. As a result of the settlement, some businesses may be eligible for compensation to address the adverse effects on their operations.
However, the settlement has faced significant criticism, particularly from major retail corporations. These critics argue that the settlement negotiations did not adequately address the needs of large national retailers, who account for a substantial portion of Visa and Mastercard transactions.
Why is the credit card called “𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐩𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐥𝐞 product in banks”?
How does VISA/Mastercard make money?
The diagram below shows the economics of the credit card payment flow. pic.twitter.com/K8AfEqCEU7
— Alex Xu (@alexxubyte) August 1, 2024
$5.5 Billion Visa-Mastercard Settlement: Eligibility and Claim Process
Eligible parties have until August 30, 2024, to submit their claims via the Payment Cards Settlement website. The online claims process is accessible for those with a client ID who received a claim form by mail. Those without the form can still submit their claim using their Taxpayer Identification Number. Claim form distribution began in early December 2023 and has continued on a rolling basis.
The class action covers “all individuals, businesses, and other entities that accepted Visa-Branded Cards and/or Mastercard-Branded Cards in the United States from January 1, 2004, to January 25, 2019.” The settlement website outlines certain exceptions, known as “Dismissed Plaintiffs,” and advises those uncertain about their eligibility to contact 1-800-625-6440 or consult the published list. This is the final opportunity to seek compensation.
Settlement Compensation Details
Merchants who processed transactions with Visa and Mastercard and were affected by the alleged corporate collusion will receive compensation. The case revolves around Visa and Mastercard’s implementation of “interchange fees,” which are fees charged between banks for card-based transactions. This collusion allegedly led to market consolidation. According to the FAQ section of the settlement, these fees typically range from 1% to 2% of the purchase price.
Compensation amounts will vary based on the actual or estimated interchange fees attributable to Visa and Mastercard transactions during the specified period.
FAQ: Mastercard and Visa Settlement
1. What is the Mastercard and Visa settlement about?
The settlement resolves a class action lawsuit in which Mastercard and Visa were accused of violating antitrust laws by exploiting merchants. The lawsuit claimed that millions of businesses were forced to pay high fees to process transactions with these payment networks.
2. Who is eligible for compensation under this settlement?
Eligibility includes all individuals, businesses, and other entities that accepted Visa-Branded Cards and/or Mastercard-Branded Cards in the United States between January 1, 2004, and January 25, 2019.
3. How can I submit a claim?
Eligible parties can submit their claims through the Payment Cards Settlement website. If you received a claim form by mail and have a client ID, you can use the online claims process. If you did not receive a form, you can still file a claim using your Taxpayer Identification Number. Claims must be submitted by August 30, 2024.
4. What if I did not receive a claim form?
If you did not receive a claim form but believe you are eligible, you can still submit a claim online using your Taxpayer Identification Number. The online submission process is available on the Payment Cards Settlement website.
5. How do I know if I am eligible or if there are any exceptions?
You can check your eligibility and any potential exceptions by reviewing the list of “Dismissed Plaintiffs” published on the settlement website. If you are unsure about your eligibility, you can contact the settlement support line at 1-800-625-6440 for assistance.
6. What are interchange fees and how do they relate to the settlement?
Interchange fees are charges imposed between banks for processing card-based transactions. The lawsuit alleges that Visa and Mastercard’s corporate collusion led to higher interchange fees and market consolidation. The typical fee ranges from 1% to 2% of the transaction amount.
7. How much compensation can I expect to receive?
Compensation amounts will vary based on the actual or estimated interchange fees attributable to your Visa and Mastercard transactions during the specified period. The settlement details will provide more specific information on how compensation is calculated.
8. When did the claim form distribution start?
Distribution of the claim forms began in early December 2023 and has been ongoing on a rolling basis.
9. What should I do if I need more information?
For additional information, visit the Payment Cards Settlement website or call the support line at 1-800-625-6440.
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