11 December 2017
visit www.solutions.lexisnexis.com

MasterCard settlement expected to reach $1 billion; Visa in talks with retailers

30 April 2003  |  4235 views  |  0 Mastercard Point of Sale2

MasterCard is expected to pay US retailers $1 billion as part of an out-of-court settlement of a lawsuit protesting against high fees for debit card processing. The case against former co-defendant Visa, due to start today, has been adjourned pending the outcome of discussions between lawyers acting for the two sides.

Lawyers acting for up to 5 million retailers in a class action lawsuit brought against Visa and MasterCard began distributing details of the settlement with MasterCard yesterday. They have also begun talks with Visa in a bid to draw a line under the long-running dispute.

Notification of the details of the deal began circulating after the New York district judge presiding over the trial unexpectedly lifted reporting restrictions on the eleventh-hour settlement between MasterCard and the plaintiffs. As well as the $1 billion pay-out, MasterCard is also understood to have agreed to cut fees for processing debit card transactions.

The news is seen as a major blow for the banks that comprise the MasterCard network, as they stand to lose substantial annual revenues from the reduction in fees. Last year, merchants paid issuers of Visa and MasterCard $4.67 billion for signature-based debit transactions at the point-of-sale, compared with $715.3 million paid to banks that issued cards processed over cheaper PIN-based debit networks.

If the retailers force a similar agreement with Visa, analysts estimate that banks involved in the two card schemes stand to lose as much as $2 billion in revenues annually.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

MasterCard settles with retailers

MasterCard settles with retailers

28 April 2003  |  5589 views  |  0 comments
Visa and MasterCard ordered to repay consumers $800 million

Visa and MasterCard ordered to repay consumers $800 million

09 April 2003  |  5076 views  |  0 comments
Small businesses side with MasterCard and Visa in lawsuit

Small businesses side with MasterCard and Visa in lawsuit

04 April 2003  |  4207 views  |  0 comments
Judge throws out Visa/MasterCard motions in merchant suit

Judge throws out Visa/MasterCard motions in merchant suit

02 April 2003  |  5316 views  |  0 comments
MasterCard records double digit growth in debit

MasterCard records double digit growth in debit

20 March 2003  |  4551 views  |  0 comments

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.atos.netvisit http://info.nice.comvisit www.response.ncr.com

Who is commenting?

Top topics

Most viewed Most shared
Revolut lets customers buy Bitcoin, Litecoin and EthereumRevolut lets customers buy Bitcoin, Liteco...
18343 views comments | 26 tweets | 22 linkedin
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
11249 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
7451 views comments | 14 tweets | 21 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
6561 views comments | 8 tweets | 17 linkedin
Barclays, First Direct and Nationwide join FCA sandbox cohortBarclays, First Direct and Nationwide join...
5964 views comments | 5 tweets | 12 linkedin

Featured job

Competitive package
New York City, NY - USA

Find your next job