Visa agrees to settle suit for $2.1 billion

Visa, the world’s largest credit card network, has agreed to settle a 3-year-old antitrust lawsuit with rival American Express Co. for about $2.1 billion, Visa said Wednesday.

The settlement stems from a 2004 suit American Express filed against Visa, MasterCard and eight banks that claimed the card associations’ “anticompetitive practices” prevented 20,000 U.S. banks from using its credit card products.

The settlement must be approved by Visa’s members. It would be funded by members of Visa USA, not Visa Inc., which is preparing for an initial public offering, the company said.

Under the agreement, American Express will receive $945 million in March from Visa and an additional payment from the banks named in the case under a judgment-sharing agreement. The rest, up to $1.12 billion, will be paid in installments of up to $70 million per quarter over four years, Visa said.

The settlement also resolves American Express’ claims against US Bank Trust National Corp., Wells Fargo & Co., Washington Mutual Inc., JPMorgan Chase & Co. and Capital One Financial Corp., which also were named in the suit.

The lawsuit was filed in U.S. District Court in Manhattan, just one month after the U.S. Supreme Court rejected appeals by Visa and MasterCard of a ruling that the two credit card associations violated antitrust law by barring banks from issuing credit cards for rival networks.

The banks were named in the suit because they had been members of one or both credit card associations’ boards of directors.

MasterCard is still planning to pursue the case in court, a company spokeswoman said.