A federal judge in Brooklyn is poised to reject a $30 billion settlement involving Visa Inc., Mastercard Inc., and a group of retailers aimed at capping credit-card swipe fees. Judge Margo Brodie from the U.S. District Court of the Eastern District of New York expressed skepticism about the deal during a recent hearing, based on court records. Although Brodie has yet to issue an official ruling, indications suggest she may not approve the settlement. More details are available in the Bloomberg Law report.
For over two decades, retailers have been challenging the interchange fees, which largely benefit the banks issuing the credit cards, such as JPMorgan Chase & Co. and Citigroup Inc. The settlement, announced in March, sought to give merchants the ability to charge consumers extra for transactions involving Visa or Mastercard credit cards and to push consumers towards lower-cost cards. Bloomberg Intelligence analyst Justin Teresi highlighted the issues Judge Brodie noted, including provisions about digital wallet acceptance rules and state bans on surcharges.
Mastercard expressed disappointment, stating that the settlement would have provided business owners more flexibility in handling card acceptance. Visa declined to comment immediately. The Retail Industry Leaders Association, representing major merchants like Target Corp. and Home Depot Inc., criticized the settlement as insufficient, arguing that it was merely a “drop in the bucket.” A more detailed statement from the association can be found here.
The final decision from Judge Brodie is anticipated in the coming days.