TL;DR
Get your next haul delivered free — and shop member deals
- Fast, free delivery on millions of items
- Access to Prime Big Deal Days deals on October 6–7
- Prime Video, Amazon Music and more included
A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of restricting competition and keeping merchant credit card fees high. The allegations are unproven, and the filing seeks to cover merchants that accepted the networks’ cards from Jan. 25, 2019, onward.
A San Diego pizzeria has filed a proposed class action accusing Visa, Mastercard and five major banks of maintaining rules that limit competition and keep merchants’ credit card fees high. The 134-page complaint seeks to represent U.S. merchants that accepted the networks’ cards from Jan. 25, 2019, onward; its allegations have not been proven in court.
The complaint names Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo alongside Visa and Mastercard. It alleges that the networks and banks have coordinated for decades to set uniform interchange fees—charges merchants pay to banks that issue the cards—and used rules that made those fees difficult to avoid or negotiate. The case also challenges network fees charged by Visa and Mastercard to merchants.
According to the filing, merchants that accept one Visa or Mastercard credit card must accept all cards on that network, regardless of the fees attached. The plaintiff says that arrangement prevents merchants from turning away higher-cost cards and weakens incentives for issuing banks to compete by lowering fees. The suit also alleges that restrictions limit merchants’ ability to steer customers toward cheaper payment methods, including through card-specific surcharges.
The complaint says merchants now pay more than $100 billion a year in fees to accept Visa and Mastercard credit cards. That figure is an allegation cited in the filing, not a finding by a court. The plaintiff argues that the challenged rules have allowed fees to rise without effective competitive pressure and seeks relief for merchants whose transactions fall within the proposed class period.
How the Fee Claims Affect Merchants
Card acceptance fees affect the cost of processing sales for businesses that take credit cards. If the plaintiff’s allegations were established, restrictions on refusing costly cards or steering customers to alternatives could limit merchants’ ability to respond to those costs. The case could also seek compensation for a period not covered by the earlier monetary settlement described in the complaint.
For consumers, the filing does not establish that card prices will change or that merchants will pass fees on to customers. It does put renewed attention on who sets the costs of card payments and what options businesses have when negotiating or managing those charges. Any changes would depend on the litigation and on the outcome of separate proceedings over proposed rule changes.
merchant credit card fee processing devices
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Earlier Settlement Covered Earlier Fees
The complaint points to a prior, long-running multidistrict case over Visa and Mastercard merchant fees. A court approved a monetary class action settlement in December 2019, providing more than $5 billion in relief, according to the source report. That settlement covered a class period ending on Jan. 24, 2019; the new suit seeks damages for a later period beginning the next day.
A separate settlement seeking changes to network rules has been preliminarily approved, the complaint says. Its benefits would apply prospectively, and the plaintiff argues that it does not compensate merchants for fees paid after Jan. 24, 2019. The new action therefore targets alleged continuing harm during the years after the earlier damages period, rather than reopening the period already covered.
““a deadweight toll on virtually every credit card purchase in America””
— The complaint
As an affiliate, we earn on qualifying purchases.
Claims Await Court Review
The filing presents allegations, not findings. The defendants’ responses, any ruling on whether the case may proceed, and whether a class will be certified are not provided in the source material. The proposed class definition may change as the case develops, and the alleged conduct and its effects remain disputed unless established through the legal process.
It is also unclear how the new case will relate procedurally to the earlier litigation and the separate settlement concerning prospective rule changes. The source report does not provide a hearing date, a requested damages total for the proposed class, or a timetable for the next court decision.
As an affiliate, we earn on qualifying purchases.
Court Decisions Will Set the Course
The case must proceed through court before any alleged liability or compensation is determined. Key steps will include the defendants’ responses and decisions about whether the lawsuit can move forward and whether the proposed merchant class can be certified. The source material does not identify scheduled dates for those steps.
Merchants and other readers should distinguish this filing from a settlement or a ruling: no payment or fee change follows automatically from the complaint. Further developments will depend on court orders, any motions by the parties, and the status of the separate prospective-relief settlement.
As an affiliate, we earn on qualifying purchases.
Key Questions
Who filed the lawsuit?
A San Diego pizzeria filed the proposed class action on behalf of itself and other merchants that accepted Visa- or Mastercard-branded credit cards in the United States.
Which companies are named?
The complaint names Visa and Mastercard and Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo.
What fees does the complaint challenge?
It challenges interchange fees paid by merchants to card-issuing banks and network fees charged by Visa and Mastercard. The plaintiff alleges that rules restricted competition and merchants’ ability to avoid or respond to those costs.
What period does the proposed class cover?
The proposed class period begins Jan. 25, 2019 and runs until the alleged anticompetitive effects of the defendants’ conduct cease. The court has not certified that class.
Does the lawsuit mean merchants will receive money?
No. The case is a proposed class action, and the claims have not been proven. A court would need to allow the case and class to proceed before any resolution could provide compensation.
Source: hn
Fall Picks
fall essentials
As an affiliate, we earn on qualifying purchases.
