July 24, 2012
The recent proposed multibillion-dollar settlement of a group of long-running lawsuits against Visa, MasterCard and some large financial institutions earned merchants some cash as well as concessions, including the right to impose a surcharge on credit card purchases. But some retailers say the deal doesn’t go nearly far enough in improving what they say remains an unfair relationship between merchants and card networks and leaves networks free to raise interchange fees in the future. Walmart is adding its voice to the chorus of merchants that are unhappy with the pact. The retail giant said in a release today that it was “disappointed in the proposed credit card interchange fee settlement,” which the company says “would not structurally change the broken market.”
Last week, the National Association of Convenience Stores, a trade group representing some 3,700 convenience stores and other merchants, announced it has hired law firm Constantine Cannon LLP to challenge the settlement, which the group says doesn’t address the core issue of how much control Visa, MasterCard and card-issuing banks have over merchants. Target has also rejected the proposed settlement, which it said would protect Visa and MasterCard from future litigation related to fees. Walmart agreed, noting, “The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts.” It remains to be seen if the pushback by retailers could jeopardize judicial approval of the settlement, which is still pending.