Wal-Mart sues Visa over interchange fees
B. Dan Berger
March 31, 2014 – Wal-Mart Stores last week sued Visa for $5 billion over credit and debit card swipe fees, which, according to reports, the retail giant says are too high.
In December, a federal judge approved a $5.7 billion class action settlement between merchants and Visa and MasterCard. The settlement requires a reduction of 10 basis points in the interchange rate fee for eight months. Reuters reported that Wal-Mart, along with Amazon.com and Target Corporation, opted out of the settlement in order to seek damages on their own.
Reuters further reported that in Wal-Mart’s lawsuit the retailer claims, Visa, along with financial institutions, “sought to prevent retailers from protecting themselves against those swipe fees, eventually hurting sales.”
NAFCU President and CEO Dan Berger previously pointed to the “breathtaking” hypocrisy of retailers in this case as merchant data breaches are being continually reported in the news. Credit and debit card interchange fees cover the costs of facilitating card transactions and help defray some of the costs of fraud when breaches occur. Credit unions and other financial institutions are working right now to help their members and customers replace credit cards that were exposed in the Target Corporation breach.
Furthermore, the Federal Reserve’s debit interchange rule was recently upheld by the U.S. Appeals Court for the District of Columbia, overturning Judge Richard Leon’s rejection last July of the rule. The ruling averts potentially disastrous impacts on credit unions, NAFCU’s Carrie Hunt said in a recent video to credit union members.
"Retailers get $5.7B settlement from Visa, MasterCard" 12/17/13
"Berger points to ‘breathtaking’ hypocrisy from NRF" 1/6/14
"Hunt, in video, notes interchange win, next steps" 3/24/14