MasterCard wins court ruling against Visa debit fee

MasterCard wins court ruling against Visa debit fee

MasterCard has won a court ruling that forces its rival Visa International to stop charging a settlement service fee (SSF) to banks switching to its domestic debit card network in the US.

The ruling by US District Court Judge Barbara Jones in New York dates back to 2003 when Visa began charging fees to any large financial institution that switched to issuing debit cards under the MasterCard brand.

Visa originally introduced the fee to cover part of a $2 billion settlement in 2003 of an antitrust litigation brought by Wal-Mart and other US retailers. But MasterCard subsequently filed suit against Visa, claiming that the move was anti-competitive.

In a statement MasterCard says in addition to repealing the SSF, Judge Jones has issued an order allowing banks that signed debit agreements with Visa when the SSF was in place to terminate the contracts if they decide to switch to MasterCard's debit network.

Noah Hanft, MasterCard general counsel, says: "With this roadblock out of the way, financial institutions will not be deterred by this coercive fee and can make decisions based on their best judgment about quality of service, strength of brand and other competitive factors that benefit their cardholders."

Visa vice president Rosetta Jones told reporters that the card association is studying the ruling and may launch an appeal.

Comments: (0)