Retailers have filed a credit card lawsuit against major banks. The interchange fee lawsuit pits nearly 5 million retailers against prominent financial institutions including Visa and MasterCard as well as 13 other large banks.
The primary concern is the 2% interchange fees -- also known as swipe fees -- which retailers are saddled with.
The retailers allege that the banks illegally colluded with each other. They claim the high credit card transaction fee would not exist in a competitive market.
The litigation hasn't drawn much media attention. In fact, The Street published a comment that it "slipped under the radar of many analysts and investors who follow these companies."
Yet the implications of the suit could be financially profound. If retailers prevail banks may need to pay billions of dollars. Some even estimate a judgment in the hundreds of billions.
Even more worrisome for banks is the potential that a court judgment could alter the current 2% interchange fees. If these are lowered, banks may see their profits dry up.
Plaintiffs include national chains and organizations, reports The Street. Payless ShoeSource, the National Association of Convenience Stores, and the National Restaurant Association are all part of the class. Several retail chains have opted out of the class.
Small business owners may want to keep abreast of any further developments in the case.
The interchange fee lawsuit could change how many fees you will need to pay to process credit card transactions. The lawsuit is set to go to trial in September, reports Inc.
Related Resources:
- This Mother Of An Anti-Trust Lawsuit Could Slam Bank Of America, Major Banks, Credit Card Companies (Business Insider)
- Retailers Sue Federal Reserve Over Swipe Fees (FindLaw's Free Enterprise)
- Swipe Fee Limit Raised, Retailers to Take Hit (FindLaw's Free Enterprise)
