Merchants to Get $1B Left from Visa/Mastercard Settlement

Gallery.shop2Checks totaling more than $1 billion will be mailed this week to more than a half million merchants in the final payouts from Visa and Mastercard stemming from a 2003 lawsuit settlement, said the National Retail Federation.
The class-action lawsuit was brought by the NRF and about 20 of the nation’s largest retailers in 1996 against the two dominant electronic payment processors, Visa and Mastercard.
The retailers alleged that Visa and Mastercard violated federal anti-trust law by requiring merchants who accept their credit cards to also accept their signature debit cards. Retailers objected to the “signature-based cards” in part because they carry higher transaction fees than independent bank debit cards activated by a PIN number, the NRF said.
The suit was settled in 2003 for $3.1 billion.
Most of the funds received have been distributed to merchants represented in the suit. But the remainder of the settlement going out this week had been scheduled to be paid out in installments through the end of 2012, the NRF said.
Visa and MasterCard agreed this fall to pay the remaining $1.1 billion at once, opting out of the installment plan, the group said. The payments will go to about 635,000 merchants, with each share “based on their volume of signature debit card transactions” during the period covered by the lawsuit, the retail group said.
“The agreement means retailers will receive slightly less than originally agreed on, but the money will come in time to help with the current economic situation,” the NRF said in a  statement.
U.S. District Court Judge John Gleeson initially approved the plan on November 6, but distribution was delayed by a court challenge regarding interest payments, the NRF said.
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