John Furner President and CEO | Official website
The National Retail Federation has spoken out against a proposed settlement of a class-action antitrust lawsuit over “swipe” fees charged to merchants by Visa and Mastercard. NRF Chief Administrative Officer and General Counsel Stephanie Martz criticized the settlement, saying, “This ‘settlement’ is a backroom deal struck without the input of major retailers or the trade associations that protect the interests of small Main Street merchants. It fails to address anticompetitive practices that lead to ever-rising swipe fees.”
In a letter to U.S. District Judge Margo Brodie, NRF's attorneys argued that the proposed settlement does not adequately address the issues at hand, particularly the central setting of swipe fees by Visa and Mastercard and the requirement for merchants to accept all cards from each network regardless of fees. The attorneys stated, “The proposed settlement does not even approach the type of relief that is required.”
The proposed settlement includes a temporary reduction in swipe fees, which NRF deems as insufficient, with the attorneys pointing out that the reduction is merely a “drop in the bucket” compared to the overall amount of fees paid by merchants. The settlement would save merchants an average of $6 billion a year, but with swipe fees totaling $100 billion last year, the relief is considered minimal.
Additionally, NRF raised concerns about the settlement's provisions, such as the limited impact of allowing merchants to impose surcharges on customers using premium cards, which may not be feasible in certain states. The settlement also includes a ban on future merchant litigation over swipe fees, which NRF argues could violate the Sherman Antitrust Act.
Despite the proposed settlement, NRF continues to advocate for the passing of the Credit Card Competition Act in Congress. The bipartisan bill aims to introduce competition over fees, security, and service by requiring large banks to enable an alternative processing network on Visa and Mastercard credit cards.
NRF emphasized the importance of addressing the ongoing issue of swipe fees in the retail industry. As the settlement falls short of providing significant relief to merchants, NRF maintains its stance that further legislative action is necessary to promote fair competition and pricing in the credit card market.
