[HEADLINE]
Businesses Have Limited Time to Claim $5.5 Billion Visa and Mastercard Settlement: Implications for US Merchants
[EXECUTIVE SUMMARY]
– US businesses have until February 4 to file a claim in a $5.5 billion class-action settlement related to alleged fee overcharges by Visa and Mastercard.
– The settlement stems from a long-running antitrust case where the credit card giants were accused of overcharging merchants through excessive interchange fees.
– Any US nonprofit or business that accepted Visa and/or Mastercard payments between January 1, 2004, and January 25, 2019, is eligible to file a claim, including those that have since closed or gone bankrupt.
– The extension of the deadline was intended to ensure that merchants who were allegedly overcharged have enough time to submit their claims.
– Most merchants will find it worthwhile to file a claim, as the amounts they receive will depend on the size of their business and the number of valid claims submitted.
[MAIN STORY]
The $5.5 billion class-action settlement between Visa, Mastercard, and US merchants is nearing its deadline for businesses to claim their share of the settlement. This settlement is the result of a long-running antitrust case in which the two credit card network giants were accused of overcharging merchants through excessive interchange fees, also known as swipe fees. Merchants pay these fees, often a percentage of the sale amount, to bank card issuers and the networks each time a card is swiped.
Attorneys involved in the case have emphasized the importance of the extended deadline, which was moved from August 30 to February 4. The goal of the extension is to ensure that merchants who were allegedly overcharged over a long period of time have the opportunity to claim their portion of the settlement. Alexandra “Xan” Bernay, a partner at Robbins Geller Rudman & Dowd LLP, one of the co-lead counsel firms, stated, “We want to make sure people have the time to get their claim in.”
Eligible US businesses, including nonprofits, can file a claim online at the official website, where they need to enter and submit their business details, transaction data, and proof of Visa/Mastercard payment processing during the eligible period. It is not necessary for businesses to hire a lawyer to file a claim. If a merchant changed its business name or structure over the 15-year period covered by the settlement, there would be multiple entries grouped under the same taxpayer ID.
The settlement administrator plays a crucial role in verifying and assessing claims. Ryan Marth, a partner at Robins Kaplan, highlighted the administrator’s access to credit card and bank data, which simplifies the claim process for many merchants. Merchants can create an account with a taxpayer ID, and the administrator’s data will pre-populate their information. In cases where the administrator does not have the necessary records, businesses have the option to request additional resources to help search for sales data.
The amounts received by merchants will vary depending on the size of their business and the number of valid claims submitted. Despite the varying amounts, Bernay believes that most merchants will find it worthwhile to file a claim. However, there is currently no specific date for when checks will be sent to claimants, as the claims administrator needs to vet and audit claims to ensure their accuracy.
It is important to note that this class-action settlement is separate from the ongoing battle between merchants and Visa and Mastercard over credit card swipe fees. Merchants allege that Visa and Mastercard, who control more than 80% of the card purchase market, constitute a duopoly that sets swipe fees. They have been advocating for the passage of the Credit Card Competition Act, which would require merchants to have a choice of at least one card network other than Visa or Mastercard to process their transactions. However, credit card payment groups oppose the legislation, arguing that the fees support fraud prevention technology and consumer rewards programs. Retailers also benefit from accepting credit cards as customers tend to spend more.
This settlement case originated in 2005 when Visa and Mastercard were bank associations owned and governed by groups of banks. The fees were collectively set by these banks, leading to the antitrust case. Since then, both Visa and Mastercard have become standalone public companies.
[US CONTEXT]
To understand the significance of this class-action settlement, it is important to consider the historical context of credit card fees in the United States. The dominance of Visa and Mastercard in the card purchase market has long been a concern for merchants who argue that the lack of competition allows these companies to set high swipe fees. The current battle between merchants and the credit card giants mirrors previous attempts to address this issue.
Over the years, merchants have consistently sought regulatory intervention to lower swipe fees. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act introduced regulations that capped debit card swipe fees. However, credit card swipe fees remained unregulated, leading merchants to continue their fight for fair pricing.
The class-action settlement provides an opportunity for merchants to seek restitution for alleged overcharges. While the settlement does not address the broader issue of swipe fees, it serves as a reminder of the ongoing struggle between merchants and credit card networks over fee regulations.
[US MARKET/INDUSTRY ANALYSIS]
The $5.5 billion settlement has significant implications for the US economy and businesses across the nation. The payment card industry plays a crucial role in facilitating transactions in various sectors, including retail, e-commerce, and services. Excessive interchange fees imposed by credit card networks can have a substantial impact on the profitability of businesses, particularly small and medium-sized enterprises.
The settlement presents an opportunity for US businesses, including those that have closed or gone bankrupt since January 1, 2004, to recoup some of the financial losses incurred through alleged overcharges. The varying amounts received by merchants will depend on factors such as the size of the business and the number of valid claims submitted.
For businesses that have managed to survive or thrive despite the alleged fee overcharges, receiving a portion of the settlement could provide a financial boost. This could potentially enable them to invest in expansion, innovation, or debt repayment. On the other hand, for businesses that have closed or gone bankrupt, the settlement could provide some compensation for the losses suffered.
However, it is important to note that the settlement is not a solution to the broader issue of credit card swipe fees. The ongoing battle between merchants and credit card networks highlights the need for comprehensive regulatory measures to address fee structures and promote fair competition in the payment card industry.
[EXPERT PERSPECTIVES]
Experts in the field have weighed in on the implications of the class-action settlement and the broader issue of credit card swipe fees in the United States. Their insights provide valuable analysis of the impact on businesses and the need for regulatory intervention.
Chad Anglin, owner of San Diego-based Pigment, commented on the benefits of the extended deadline, stating that it has given him time to review his records and submit a claim. This sentiment is echoed by Alexandra “Xan” Bernay, partner at Robbins Geller Rudman & Dowd LLP, who believes that most merchants will find it worthwhile to file a claim.
Ryan Marth, partner at Robins Kaplan, emphasized the role of the settlement administrator in simplifying the claim process for merchants. He highlighted the administrator’s access to credit card and bank data, which allows many merchants to find their information pre-populated in the database. Marth also mentioned that businesses have the opportunity to request additional resources from the administrator to help search for sales data if necessary.
These expert perspectives provide valuable insights into the practical aspects of filing a claim and the potential benefits for US merchants.
[INTERNATIONAL RELATIONS]
While the class-action settlement primarily focuses on US merchants and the alleged fee overcharges by Visa and Mastercard, it is important to consider the implications for international relations. Visa and Mastercard are multinational companies with a significant global presence.
The settlement could have broader implications for US-China relationships and US-EU connections, as these regions are major players in the global payment card industry. Any significant financial impact on Visa and Mastercard resulting from the settlement could affect their international operations and relationships with foreign markets.
Furthermore, the ongoing battle between merchants and credit card networks over swipe fees has implications for global trade. The outcome of this settlement and the broader issue of fee regulations could influence the way businesses engage in international transactions and the costs associated with accepting credit card payments.
[FUTURE OUTLOOK FOR AMERICA]
In the short term, it is expected that the class-action settlement will result in a significant influx of claims from US businesses seeking restitution for alleged fee overcharges. The claims administrator will need to carefully vet and audit these claims before distributing the settlement funds.
In the long term, the settlement serves as a reminder of the ongoing battle between merchants and credit card networks over fee regulations. While the settlement provides some relief for affected businesses, it does not address the broader issue of swipe fees. Moving forward, it is crucial for policymakers to consider comprehensive regulatory measures that promote fair competition and protect the interests of businesses and consumers in the payment card industry.
[POLICY IMPLICATIONS]
The class-action settlement raises important policy considerations for the US government and regulatory bodies. It highlights the need for comprehensive regulations that address fee structures and promote fair competition in the payment card industry.
Legislative measures, such as the Credit Card Competition Act, have been proposed to lower swipe fees and provide merchants with more options for processing transactions. However, these proposals have faced opposition from credit card payment groups who argue that fees support fraud prevention technology and consumer rewards programs.
The settlement itself is not a result of legislative action but rather a legal resolution to address alleged fee overcharges. However, it underscores the importance of ongoing policy discussions surrounding fee regulations and the need for regulatory bodies to monitor and address issues of antitrust in the payment card industry.
[KEY TAKEAWAYS FOR US AUDIENCE]
– US businesses have until February 4 to file a claim in a $5.5 billion class-action settlement related to alleged fee overcharges by Visa and Mastercard.
– Eligible US businesses that accepted Visa and/or Mastercard payments between January 1, 2004, and January 25, 2019, can file a claim, including those that have closed or gone bankrupt.
– The settlement provides an opportunity for businesses to seek restitution for alleged overcharges, but it does not address the broader issue of swipe fees.
– The settlement highlights the ongoing battle between merchants and credit card networks over fee regulations and the need for comprehensive regulatory measures.
– The implications of the settlement extend beyond US borders, with potential effects on US-China relationships, US-EU connections, and global trade in the payment card industry.
[SOURCE ATTRIBUTION]
Source: USA Today
URL: https://www.usatoday.com/story/money/small-business/2024/12/18/deadline-claim-visa-mastercard-settlement/76948117007/
Published: 2024-12-18T10:10:03Z
[HEADLINE]
Businesses Have Limited Time to Claim Their Share of $5.5 Billion Visa and Mastercard Settlement
[EXECUTIVE SUMMARY]
Businesses in the United States still have a limited amount of time to claim their portion of a $5.5 billion class-action settlement resulting from alleged fee overcharges by Visa and Mastercard. The deadline to file a claim has been extended to February 4th, allowing eligible businesses that accepted Visa and/or Mastercard credit or debit payments between January 1, 2004, and January 25, 2019, to participate. This settlement stems from a long-running antitrust case in which the two credit card network giants were accused of overcharging merchants with excessive interchange fees. While the goal of the extension is to ensure that merchants who were allegedly overcharged have the opportunity to claim their share, the settlement also has broader implications for the US business landscape, consumer protection, and the relationship between merchants and credit card networks.
[MAIN STORY]
The $5.5 billion class-action settlement between Visa, Mastercard, and merchants is the result of an antitrust case that dates back to 2005. In this case, the credit card network giants were accused of overcharging merchants through excessive interchange fees, also known as swipe fees. Merchants are required to pay these fees, typically a percentage of the sale amount, to bank card issuers and the networks each time a card is swiped. The alleged overcharging occurred over a 15-year period from January 2004 to January 2019.
The extension of the claim filing deadline to February 4th is intended to ensure that eligible businesses have sufficient time to submit their claims. The settlement is open to any nonprofit or business that accepted Visa and/or Mastercard payments during the specified period, including businesses that have since closed or gone bankrupt. To file a claim, eligible businesses can visit the official website and provide their business details, transaction data, and proof of Visa/Mastercard payment processing. While hiring a lawyer is not necessary, businesses may need to upload supporting documents and provide additional resources to help search for sales data if their records have changed over the 15-year period.
The settlement administrator plays a crucial role in verifying and assessing claims. They have access to credit card and bank data, allowing many merchants to find their information pre-populated in the database. However, in cases where the administrator does not have the records, businesses are given the opportunity to provide available data to support their claims. The settlement amount received by each business will vary based on their size and the number of valid claims submitted.
While the settlement provides an opportunity for merchants to recover some of the alleged overcharged fees, the process of vetting and auditing claims can delay the distribution of checks. Attorneys involved in the case advise businesses to remain patient until the claims administrator completes the necessary procedures to ensure the accuracy and validity of submitted claims.
[US CONTEXT]
The antitrust case against Visa and Mastercard highlights the ongoing battle between merchants and credit card networks over swipe fees in the United States. Merchants argue that Visa and Mastercard, which control over 80% of the card purchase market, form a duopoly that sets swipe fees. They have been advocating for the Credit Card Competition Act, a proposed legislation that would require merchants to have a choice of at least one card network other than Visa or Mastercard to process their transactions. The Act aims to lower fees by introducing competition among card networks.
Credit card payment groups, however, oppose the legislation, claiming that the fees support fraud-prevention technology and consumer rewards programs. They also argue that retailers benefit from accepting credit cards because customers tend to spend more when using this payment method. The antitrust case against Visa and Mastercard, originally filed in 2005, was based on the collective fee-setting practices of the banks that owned and governed both networks at the time. Since then, Visa and Mastercard have become independent public companies.
This settlement serves as a reminder of the ongoing issues surrounding swipe fees and the complex dynamics between merchants, credit card networks, and consumers in the United States. It also raises questions about the need for regulatory measures to ensure fair competition and protect businesses from potential overcharging by dominant players in the market.
[US MARKET/INDUSTRY ANALYSIS]
The $5.5 billion settlement has significant implications for the US economy and businesses. The refund of allegedly overcharged fees can provide financial relief to affected merchants, especially those that have since closed or gone bankrupt. The settlement amount received by each business will vary depending on their size and the number of valid claims submitted. This injection of funds into the business sector could potentially stimulate economic growth and investment.
The settlement also highlights the importance of transparency and fair competition within the payment processing industry. The ongoing debate over swipe fees and the need for legislation to introduce competition among card networks reflects the broader challenges faced by businesses in navigating the costs associated with accepting credit and debit card payments. As technology continues to shape the payment landscape, it is essential to strike a balance between protecting merchants from excessive fees and ensuring the sustainability of fraud-prevention measures and consumer rewards programs.
[EXPERT PERSPECTIVES]
According to Alexandra “Xan” Bernay, a partner at Robbins Geller Rudman & Dowd LLP and co-lead counsel on the case, most merchants will find it worthwhile to file a claim and participate in the settlement. While the exact amount each business will receive is uncertain, the potential financial benefit makes the filing process worthwhile.
Chad Anglin, the owner of San Diego-based Pigment, expressed gratitude for the extension of the claim filing deadline. The additional time allowed him to thoroughly review his records and ensure that he can file a complete and accurate claim.
Ryan Marth, a partner at Robins Kaplan, highlighted the role of the settlement administrator in facilitating the claims process. The administrator’s access to credit card and bank data simplifies the filing process for many merchants, as their information is pre-populated in the database. Marth also emphasized that businesses have the opportunity to request additional resources from the administrator if their records are not readily available.
[INTERNATIONAL RELATIONS]
The Visa and Mastercard settlement primarily focuses on the relationship between the credit card networks and US merchants. However, it indirectly impacts international relations, particularly in terms of global trade and economic diplomacy.
Visa and Mastercard are multinational corporations with a significant presence in various countries. Any changes to their business practices resulting from this settlement could potentially influence their operations and relationships with merchants across the world. Additionally, the ongoing debate over swipe fees and competition in the US payment processing market may prompt discussions and debates in other countries grappling with similar issues.
[FUTURE OUTLOOK FOR AMERICA]
In the short-term, the Visa and Mastercard settlement will provide a financial boost to eligible businesses, potentially stimulating economic growth. However, the long-term implications of this settlement extend beyond the immediate financial relief. The ongoing debate over swipe fees and competition among card networks may lead to legislative and regulatory changes in the United States. These changes could impact the payment processing landscape, influence business practices, and shape the relationship between merchants and credit card networks in the future.
[POLICY IMPLICATIONS]
The Visa and Mastercard settlement highlights the need for ongoing discussions and potential legislative action to address the issue of swipe fees and fair competition in the payment processing industry. The battle between merchants and credit card networks over fees is likely to continue, with potential legislative considerations to introduce more competition among card networks. Regulatory authorities may also explore measures to ensure transparency and protect businesses from potential overcharging by dominant players in the market.
[KEY TAKEAWAYS FOR US AUDIENCE]
– Eligible businesses still have time to file a claim and participate in the $5.5 billion Visa and Mastercard settlement until February 4th.
– The settlement stems from a long-running antitrust case in which the credit card networks were accused of overcharging merchants through excessive interchange fees.
– This settlement has broader implications for the US business landscape, consumer protection, and the relationship between merchants and credit card networks.
– The ongoing debate over swipe fees and competition among card networks reflects the challenges faced by businesses in navigating the costs associated with accepting credit and debit card payments.
– The settlement provides an opportunity for eligible businesses to recover some of the allegedly overcharged fees, potentially stimulating economic growth.
– The long-term implications of this settlement may lead to legislative and regulatory changes in the payment processing industry, shaping the relationship between merchants and credit card networks in the future.
[SOURCE ATTRIBUTION]
Source: USA Today
URL: https://www.usatoday.com/story/money/small-business/2024/12/18/deadline-claim-visa-mastercard-settlement/76948117007/
Published: 2024-12-18T10:10:03Z
[HEADLINE]
Businesses Face Deadline to Claim Their Share of $5.5 Billion Visa and Mastercard Settlement
[EXECUTIVE SUMMARY]
Businesses in the United States have a limited amount of time to file claims and receive compensation from a $5.5 billion class-action settlement related to alleged fee overcharges by Visa and Mastercard. The deadline to file a claim has been extended to February 4th, providing an opportunity for eligible businesses, including nonprofits and those that have closed or gone bankrupt since January 2004, to seek restitution. This settlement is the result of a long-running antitrust case in which the two credit card network giants were accused of overcharging merchants through excessive interchange fees. The extension of the filing deadline aims to ensure that merchants allegedly overcharged during the extended period have ample time to submit their claims and receive compensation.
[MAIN STORY]
The $5.5 billion class-action settlement between Visa, Mastercard, and merchants in the United States is the outcome of a protracted antitrust case. The case centered around allegations that the credit card networks imposed excessive interchange fees, also known as swipe fees, on merchants. These fees, often a percentage of the sale amount, are paid by merchants to bank card issuers and the networks each time a card is swiped. The settlement allows any eligible nonprofit or business that accepted Visa and/or Mastercard credit or debit payments between January 1, 2004, and January 25, 2019, to file a claim and potentially receive compensation.
Attorneys involved in the case, including Alexandra “Xan” Bernay, a partner at Robbins Geller Rudman & Dowd LLP, emphasize the importance of the filing extension. The goal is to ensure that merchants allegedly overcharged over the 15-year period have enough time to submit their claims and receive their share of the settlement. Eligible claimants can file their claims online through the official website, providing business details, transaction data, and proof of Visa/Mastercard payment processing during the specified period. The opportunity to upload supporting documents is also available, and hiring a lawyer is not necessary.
Chad Anglin, the owner of Pigment, a San Diego-based business, acknowledges the benefits of the filing extension. It has given him enough time to meticulously go through his records and gather the necessary information for his claim. Ryan Marth, a partner at Robins Kaplan, highlights the role of the settlement administrator, who verifies and assesses the claims. The administrator has access to extensive credit card and bank data, which simplifies the process for many merchants. Merchants can create an account with their taxpayer ID and find their information pre-populated in the database. If necessary, they can also request additional resources from the administrator to locate missing sales data.
The compensation amounts will vary depending on the size of the businesses and the number of valid claims submitted. Bernay assures that most merchants will find it worthwhile to file their claims. However, the timeline for when the checks will be sent has not been determined yet. The claims administrator needs to conduct a thorough vetting and auditing process to ensure the legitimacy of the claims and that all documents are in order. The attorneys advise businesses to remain patient during this process.
It is important to note that this settlement is separate from the ongoing battle between merchants and Visa and Mastercard over credit card swipe fees. Merchants argue that Visa and Mastercard, as the dominant players in the market, hold a duopoly that allows them to set swipe fees. They have been advocating for the passage of the Credit Card Competition Act, which would require merchants to have alternative card networks to process their transactions, reducing fees. Credit card payment groups oppose this legislation, claiming that the fees support fraud-prevention technology and consumer rewards programs. Retailers also benefit from accepting credit cards as it tends to increase customer spending.
The antitrust case against Visa and Mastercard, filed in 2005, stemmed from the fact that both entities were bank associations at the time, owned and governed by groups of banks. These banks collectively set the fees, eliminating competition and leading to the antitrust allegations. Since then, both Visa and Mastercard have become independent public companies.
[US CONTEXT]
In the United States, the issue of excessive interchange fees charged by credit card networks has long been a concern for merchants. The antitrust case against Visa and Mastercard is just one example of the ongoing battle between businesses and these dominant players. Similar cases have arisen in the past, highlighting the need for regulatory oversight and legislation to protect merchants from unfair practices. The outcome of this settlement will have implications for future legal battles and regulatory actions related to interchange fees in the US.
[US MARKET/INDUSTRY ANALYSIS]
The $5.5 billion settlement will have a significant impact on the US economy and businesses. The compensation received by merchants will provide financial relief and potentially stimulate economic activity. The settlement also serves as a reminder of the need for fair competition and regulation in the credit card industry. As merchants continue to advocate for lower interchange fees, the outcome of this settlement could influence the direction of future negotiations and potential legislative changes in the US market.
[EXPERT PERSPECTIVES]
American legal experts and industry insiders have weighed in on the significance of the Visa and Mastercard settlement. They emphasize the importance of providing businesses with ample time to file their claims and receive compensation. The settlement administrator’s access to extensive credit card and bank data has simplified the process for many merchants, ensuring that they can easily locate their transaction information and supporting documents. Furthermore, experts highlight the potential impact of this settlement on future legal battles and the need for regulatory measures to address interchange fees in the US.
[INTERNATIONAL RELATIONS]
The Visa and Mastercard settlement has broader implications for international relations, particularly in the context of US-China relationships and US-EU connections. The dominance of these credit card networks in the global market raises questions about competition and fair practices. The outcome of this settlement may influence discussions and negotiations regarding global trade and financial regulations involving the US, China, and the EU.
[FUTURE OUTLOOK FOR AMERICA]
In the short term, the deadline for filing claims and the subsequent distribution of compensation will provide relief to eligible businesses and potentially stimulate economic activity. In the long term, the outcome of this settlement may lead to changes in the credit card industry. Merchants will likely continue to push for lower interchange fees, and policymakers may consider introducing legislation to promote fair competition and protect businesses from excessive charges.
[POLICY IMPLICATIONS]
The US government’s response to the Visa and Mastercard settlement will be crucial in determining the policy implications. Legislative considerations may arise regarding the regulation of interchange fees and the need for increased competition in the credit card industry. Regulatory bodies may also review the practices of credit card networks to ensure fair treatment of merchants and consumers.
[KEY TAKEAWAYS FOR US AUDIENCE]
– Eligible businesses have a limited time to file claims and receive compensation from the $5.5 billion Visa and Mastercard settlement.
– The outcome of this settlement will have implications for future legal battles and regulatory actions related to interchange fees in the US.
– The settlement will provide financial relief to businesses and potentially stimulate economic activity.
– The settlement highlights the need for fair competition and regulation in the credit card industry.
– The outcome of this settlement may influence discussions and negotiations regarding global trade and financial regulations involving the US, China, and the EU.
– Policymakers may consider introducing legislation to promote fair competition and protect businesses from excessive charges in the credit card industry.
[SOURCE ATTRIBUTION]
Source: USA Today
URL: https://www.usatoday.com/story/money/small-business/2024/12/18/deadline-claim-visa-mastercard-settlement/76948117007/
Published: 2024-12-18T10:10:03Z
Source: USA Today | Originally published: 2024-12-18T10:10:03Z | Read more: https://www.usatoday.com/story/money/small-business/2024/12/18/deadline-claim-visa-mastercard-settlement/76948117007/
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