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Small businesses side with MasterCard and Visa in lawsuit

04 April 2003  |  4183 views  |  0 cheque book

US small businesses have spoken out in support of MasterCard and Visa in a forthcoming class action lawsuit spearheaded by WalMart and other retailers over debit card charges.

The Small Business Survival Committee (SBSC) says the decision earlier this week by District Court Judge John Gleeson to proceed with the case was "unfortunate for consumers and small businesses in the debit marketplace" and that the future of small businesses could be adversly impacted by the outcome.

The retailers accuse both MasterCard and Visa of stifling competition and imposing large fees for debit card payments, which are then passed on to customers.

Karen Kerrigan, chairman and founder of the commitee, says small businesses are benefiting from the popularity of debit cards and costs associated with processing debit products are less expensive than for most credit cards, paper cheques and American Express.

"These are costs that directly come out of the bottom-line of many struggling small businesses. When consumers choose to use debit products, small businesses save money," she adds.

SBSC says if Wal-Mart and other giant retailers prevail in the suit, it will be a severe blow to the ability of small businesses to compete against the "behemoths".

"The big retailers are attempting to use the courts to assert more control over how consumers pay for their goods, and at the same time squeeze small businesses.

"This case is an attempt to dismantle consumer choice and uproot a payments system that consumers and small businesses have come to depend upon," says Kerrigan.

The trial is set to begin on 28 April 2003.

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