US Retailers Appeal US$5.7bn Interchange Fee Settlement
America’s National Retail Federation (NRF) is appealing the US5.7bn settlement with Visa and MasterCard over interchange fees paid between banks for the acceptance of card-based transactions, which District Judge John Gleeson approved in December.
The NRF filed an appeal with the 2nd US Circuit Court of Appeals, requesting that it overturn Judge Gleeson’s decision. The retail trade group is concerned that the ruling will do nothing to prevent hikes on interchange fees in the future.
At the time of the ruling, Judge Gleeson called the settlement an ‘important step forward’ as it allows merchants to surcharge credit cards at both the brand level and the product level. “For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees and use that information to influence their customers’ choices of payment methods,” he said.
However, Mallory Duncan, senior vice president (SVP) and general counsel of the NRF, countered by saying that surcharging is “absolutely the opposite of what retailers sought.”
The US retail community has largely been against the settlement since it was first announced in July 2012. “A majority of the original plaintiffs in the case repudiated the settlement as soon as they saw its terms, the nation’s largest retailers have spoken out against it, and close to 8,000 retailers and merchants have formally rejected the proposal,” said Duncan.