MasterCard pays out $61 million to settle Tesco interchange suit
31 July 2015 | 9985 views | 0
MasterCard has shelled out $61 million to UK supermarket chain Tesco in the first of an expected wave of settlements by card schemes over interchange fee lawsuits lodged by British retailers.
The pay-out to Tesco was revealed by MasterCard chief financial officer Martina Hund-Mejean during the company's earnings call.
“We have been settling with Tesco, which is the largest merchant claimant in this litigation,” she told investors. “We are pleased that that is behind us.”
Tesco was one of 20 UK retailers which filed suit against MasterCard in 2013 alleging historic overpayment of 'anti-competitive' interchange fees.
Wal-Mart Stores' Asda unit, William Morrison Supermarkets, Arcadia Group, Comet, Iceland and at least six other big nationwide chains have also commenced legal proceedings against Visa over payment-processing fees.
Earlier this month, EU anti-trust regulators issued a formal 'Statement of Objections' against MasterCard, accusing the card scheme of using its rules to artificially inflate fees and of over-charging retailers for purchases made by non-EU cardholders.
The UK Government has also commenced consultation on interchange fee caps which are set to come into force across the EU at the end of the year.
There were almost 10.7 billion credit and debit transactions in Britain in 2013, and the British Retail Consortium has estimated that the caps could save British businesses up to £480 million a year.
The Government would like to see this benefit passed on to consumers in the form of lower prices.