Visa, MasterCard and merchant settlement, who should ultimately pay for it?

Source: On June 29,《The Wall Street Journal》 quoted a report that US credit card companies Visa and MasterCard reached a settlement with a merchant on a protracted antitrust lawsuit about credit card fees.

Visa and mastercard, including jpmorgan chase, citigroup and bank of America, will pay merchants about $6.5 billion for issuing debit and credit CARDS under the settlement.

Image from pixabay
It is unclear how credit card merchants and card-issuing banks will share the $6.5 billion.

According to reports, in 2016, a $5.7 billion settlement agreement between Visa and MasterCard was vetoed by the court. The US court overturned the 2013 old case and ruled that the $7.25 billion antitrust settlement agreement involving Visa, MasterCard and merchants was invalid.

The lawsuit was filed 10 years ago and the plaintiff was 1,200 US domestic businesses. The two parties reached the above settlement agreement in 2012, and the initial settlement amount was US$7.25 billion. However, some merchants withdrew from the agreement, resulting in a corresponding reduction in the final transaction amount.

In 2013, the original trial judge approved the settlement agreement, which is the largest antitrust agreement in US history.
In 2016, the US Court of Appeals overturned the previous ruling. The court held that the lawyer representing the original lawsuit did not guarantee the interests of the opposing merchants, and the court finally decided to veto the agreement.

There are five major credit card brands in the world. In addition to visa and master, there are also DinersClub, JCB (JapanCreditBureau) and American Express.

According to earlier reports, the American government is accusing Visa, mastercard, improper manipulation of the credit card fees, that is when consumers use a credit card or debit card, Visa and mastercard limit merchants to customers is recommended to use a cheaper means of payment, the stakeholders “exclusive competition” illegal activities.

For US users, even when paying through new online and mobile platforms such as Apple Pay and PayPal, US consumers still have a strong incentive to bind their credit cards to these platforms. This is an important difference between the United States and other markets such as China. In China, mobile payment systems such as Alipay have developed rapidly, and the fees charged to merchants are much lower, only about 0.6%.
The ruling is the largest antitrust agreement in U.S. history.

Since January 2004 to November 2012, the first type of access businesses can share Visa, mastercard, as much as $7.25 billion claims, but after the second category of the businessman with rules changing situation not enjoy compensation.

Amazon, target and many other businesses in the second category have been forced to drop lawsuits because of policy measures.