More Retailers Join Credit Card Suit
Most of the nation’s retailers joined Monday to challenge Visa and MasterCard in a potentially multibillion-dollar antitrust suit.
The National Retail Federation, representing 1.4 million merchants, joined Wal-Mart Stores Inc., Limited Inc. and Sears, Roebuck & Co. to fight being forced to accept both credit and debit cards.
The bank card companies require merchants accepting their credit cards to also accept their debit cards, which the plaintiffs contend is costly and illegal.
The expanded suit, building on an original filing last fall, added MasterCard as a defendant, added new plaintiffs and combined several existing suits. The filing was made in federal court in New York.
The expanded suit is another headache for the bank card companies, which are facing a possible antitrust probe by the Justice Department over rules that bar most U.S. banks from doing business with competing credit card companies.
In dealing with the merchants, the bank card companies say the integrity of their brands requires that both debit and credit cards be accepted. If a merchant accepts any card bearing the MasterCard logo, it must accept all cards bearing the logo, a MasterCard spokeswoman said.
“You can imagine how the brand would be harmed if merchants were free to accept some cards and not others,” she said. In a statement, Visa said it, too, would “vigorously defend” its position.
The merchants argue that they have paid roughly $740 million in excess fees over the last two years and will pay an additional $900 million this year.
If the suit succeeds, MasterCard and Visa would face the triple damages required in antitrust cases, which might approach $5 billion.
The lead attorney for the merchants, Lloyd Constantine, said that handling cash, processing a check or using an ATM costs Wal-Mart only 7 to 15 cents for a $100 purchase, but debit cards cost far more.
“If you go in and make a $100 purchase at Wal-Mart and use a Visa check [card], it costs Wal-Mart no less than $1.10 in Visa interchange fees,” he said. “If you use MasterMoney, it costs Wal-Mart no less than $1.31.”
