Visa, Mastercard and banks face new merchant fee lawsuit
A San Diego pizzeria’s proposed class action alleges network rules and interchange fees have constrained competition. The claims remain unproven, and the proposed class has not been certified.
A San Diego pizzeria has filed a proposed US class action accusing Visa, Mastercard and five major banks of keeping merchant credit card fees high through interchange fee schedules and rules that limit competition.
Filed on 30 September, the complaint names Bank of America, Capital One, Chase, Citibank and Wells Fargo alongside the card networks. It seeks to represent US individuals, businesses and other entities that accepted Visa or Mastercard credit cards from 25 January 2019 until the alleged effects of the conduct cease.
The complaint alleges merchants that accept cards from either network must accept all of its cards, regardless of cost, and cannot readily direct customers towards cheaper payment methods. It says those constraints reduce competition among banks and payment networks. These claims, including the lawsuit’s allegations about fee levels and market effects, have not been established in court.
The filing says a 2019 settlement in earlier litigation provided more than US$5 billion in monetary relief for transactions up to 24 January 2019. It argues that merchants have received no compensation for fees paid since 25 January 2019. A separate settlement seeking prospective rule changes has been preliminarily approved, according to the complaint.
The lawsuit’s proposed class period and scope remain subject to the court’s consideration. The case’s outcome is not yet known.
