Visa and MasterCard threaten billions in payments to large companies


This is not the first time that payment systems have become parties to high profile litigation

Visa and MasterCard threaten billions in payments to large companies. Photo:

Companies Asda, Sainsbury’s, Argos and Morrisons are expected to receive billions as compensation from Visa and MasterCard for violations of antitrust laws by payment systems.

On Wednesday, the UK Supreme Court unanimously rejected three separate appeals, Visa and MasterCard, which have been in operation since 1992 and related to interbank commissions charged by retailers when customers use payment cards. All five judges found that the fees imposed by the payment system violated competition laws.

The damages recoverable by retailers can amount to billions of pounds, although the exact amount of compensation will be determined by the courts in further litigation. According to the Financial Times, other retailers have also filed lawsuits against payment systems.

The Court of Appeal previously ruled that the litigation between Argos, Asda, Morrison and MasterCard should be reviewed by the Competition Appeal, the tribunal. However, this is not necessary after the Supreme Court’s decision, the publication notes.

Support payspace magazine

Paypal magazine help

In 2018, several US banks including VP, MasterCard, as well as JP Morgan Chase, Bank of America and Citigroup confirmed their willingness to pay approximately $ 6.2 billion to settle the largest class lawsuits in EntrustTrust litigation. The agreement concerns a long-standing case in which retailers charged payment systems, as well as banks issuing plastic cards, paying more than the amount of fees charged to them.

A lawsuit against the largest banks issuing Visa, MasterCard and plastic cards was first filed in 2005. A court ruling on the issue, which provided for payment of an amount of $ 7.25 billion by payment systems and banks, was adopted in 2012. This amount later decreased as many retailers refused to participate in the class action.

In April this year, Visa and MasterCard announced plans to increase fees for operations with payment cards. In particular, we are talking about the Interbank Commission. The decision to increase fees was made even before the proliferation of coronaviruses in the United States, so companies could postpone them or abandon such plans altogether if the situation in the economy worsened. Therefore, the two companies have postponed the July changes related to the commissions, which were to come into force in April.

Read: Prepaid or Credit Card: which card to choose

According to the content


Source link

Leave a Reply