Visa, MasterCard and the US banks such as JPMorgan Chase, Bank of America, Citibank, Wells Fargo and Capital One have settled the Credit Card Interchange Fee Case by offering to establish $7.25bn fund to pay merchant claims.
Filed by the US retailers against the card issuers and their respective issuer banks in 2005, Visa and MasterCard were accused for conspiring directly and indirectly to keep merchants from finding ways to diminish credit-card costs.
Under the proposed settlement, which has to be cleared by the respective court, Visa, MasterCard and over a dozen of the US largest banks will pay approximately $6bn to the retailers.
The card companies also agreed to reduce swipe fees by the equivalent of 10 basis points for eight months for a total consideration to stores valued at about $1.2bn.
As part of the settlement, Visa and MasterCard to modify their merchant rules so that retailers can encourage consumers to use cheaper forms of payments.
Robbins Geller senior trial counsel Patrick Coughlin said, "These new rules will give merchants the tools they need to put pressure on the credit card networks to lower interchange or ‘swipe’ fees, which are the second or third highest cost of doing business for many retailers."
"Reducing these fees will reduce costs, ultimately resulting in lower prices for consumers," Coughlin added.