MasterCard has reached an eleventh-hour settlement with large US retailers over a potentially crippling mass action debit card lawsuit, leaving Visa exposed as the remaining trial defendant.
US District Judge John Gleeson said the case against MasterCard had been settled out-of-court, but imposed a gagging order on details as motions began for jury-selection in the remaining suit against Visa.
The case against the credit card companies has been spearheaded by retailing giant Wal-Mart, which alleges that the major card schemes levy excessive fees for debit card payments which have to be passed on to consumers.
Merchants want the freedom to clear debit transactions on less expensive, independent networks that use personal identification numbers, or PINs.
Before the settlement, market watchers had speculated that an unfavourable result could push the bank-backed card schemes to the brink of bankruptcy.
It remains to be seen whether Visa will follow MasterCard's example and settle its differences with the merchants out of court.
Speaking before news of MasterCard's settlement had circulated, Visa vice president Daniel tarman, commented: "Visa USA will vigorously defend in court every consumer's right to choose how to pay at the checkout counter to stop Wal-Mart's assault on consumer choice. If Wal-Mart succeeds in this case, it will be able to reach into every consumer's wallet and dictate how they pay."