Visa and MasterCard rates violate anti-trust laws, retailers tell Senate
Visa’s and MasterCard’s practices in setting credit and debit card interchange rates violate federal antitrust laws and need to be addressed by Congress, a representative of the Merchant Payments Coalition told the Senate Judiciary Committee today.
Interchange is the percentage of each transaction that Visa and MasterCard banks collect from retailers every time a consumer uses a credit or debit card. The fee varies based on the type of card, merchant size and other factors, but averages about 2% for credit card transactions.
“The collective setting of interchange fees represents on-going antitrust violations by the two leading payment card associations—Visa and MasterCard—that cost merchants and American consumers tens of billions of dollars annually,” antitrust attorney W. Stephen Cannon testified on behalf of the coalition.
The banks that make up the Visa and MasterCard networks engage in price-fixing when each network sets it interchange rates, and in effect, operate as a cartel, a practice long recognized by antitrust courts as anticompetitive, Cannon said.
“MPC is fighting for a more competitive and transparent card system that works better for consumers and merchants alike,” he said.
Attorneys for the two card associations, however, denied that the setting of interchange rates violates anti-trust laws. “The fight about interchange fees is not a legal issue, antitrust or otherwise,” Joshua R. Floum, Visa USA’s general counsel and secretary, told the committee. “It is a business dispute, and it should be and, I believe, will be resolved at the negotiating table.”
Back...
