Mastercard and Visa Agree to Pay $167.5 Million to Settle Class Action Lawsuit Over ATM Access Fees

In a significant development, Mastercard and Visa have agreed to pay a combined total of $167.5 million to settle a class action lawsuit that accused the two credit card companies of conspiring to artificially keep ATM access fees high.

Background

The lawsuit, which was filed in 2019, claimed that Mastercard and Visa had engaged in a price-fixing conspiracy that artificially inflated ATM access fees, also known as interchange fees. These fees are charged by banks and credit card companies to other financial institutions for processing transactions.

The plaintiffs alleged that Mastercard and Visa had agreed to maintain artificially high ATM access fees through a complex scheme involving secret meetings, industry reports, and coordinated marketing efforts. They claimed that this conspiracy prevented them from negotiating fairer fees with their merchants and resulted in excessive costs being passed on to consumers.

Settlement Terms

The proposed settlement, which was announced in March 2023, would provide compensation to a group of class members who purchased credit cards issued by Mastercard or Visa between 2010 and 2019. The settlement also includes measures aimed at preventing similar price-fixing schemes in the future.

Under the terms of the settlement, Mastercard and Visa will pay $167.5 million over several years. Class members can submit claims to receive their share of the settlement funds. The companies have agreed to cooperate with regulatory authorities and implement new compliance measures to prevent future misconduct.

Impact on Consumers

The proposed settlement has significant implications for consumers who use credit cards issued by Mastercard or Visa. If approved, it would provide compensation to those who were affected by the alleged price-fixing scheme.

Consumers can expect to receive a share of the $167.5 million settlement fund, which will be distributed according to their individual claims. The amount each person receives will depend on the value of their claim, which will be determined by the court.

Regulatory Response

The Federal Trade Commission (FTC) and other regulatory authorities have been investigating Mastercard and Visa's business practices for several years. While the proposed settlement does not necessarily resolve all allegations against the companies, it provides a significant victory for consumers and regulators alike.

"The FTC is pleased that these two major payment networks have agreed to settle this antitrust litigation," said a spokesperson for the agency. "This settlement provides relief to affected consumers and demonstrates our commitment to enforcing federal antitrust laws."

Conclusion

The proposed settlement between Mastercard, Visa, and class action plaintiffs marks an important milestone in the company's efforts to address consumer concerns over ATM access fees.

While the terms of the settlement are still being finalized, it is clear that Mastercard and Visa have agreed to take responsibility for their actions and implement new compliance measures to prevent future misconduct.

As regulatory authorities continue to monitor the payment processing industry, consumers can expect greater transparency and accountability from companies like Mastercard and Visa.

Timeline

• 2019: Class action lawsuit filed against Mastercard and Visa alleging price-fixing conspiracy
• March 2023: Proposed settlement announced, with combined payments of $167.5 million to settle the lawsuit

Key Players

• Mastercard
• Visa
• Federal Trade Commission (FTC)
• Class action plaintiffs