Heartland Suit Accuses Mercury of Inflating Interchange Fees

Feb. 3, 2014

Heartland Suit Accuses Mercury of Inflating Interchange Fees Heartland Payments Systems has accused Mercury Payment Systems of false advertising and unfair competition in a suit filed recently in federal court in California. The suit alleges that the Colorado-based ISO has built an illegal markup into “interchange plus” pricing. Princeton, N.J.-based Heartland said it introduced interchange plus pricing, which requires merchants to pay interchange to its processor at cost and then lists other fees separately for better transparency.

Heartland charges Mercury gets around interchange plus pricing by inflating the interchange fee. The suit seeks to stop the practice and “recover full value for each merchant and prospect Mercury has wrongfully taken from Heartland by deceptively falsifying pass-through interchange costs.”

Heartland said it has reviewed hundreds of monthly statements from Mercury for different merchants throughout the U.S., which indicate that Mercury has regularly charged inflated interchange fees without disclosure.

Late last week, Mercury issued a statement in response to the lawsuit:

“Mercury will vigorously defend against the lawsuit filed by Heartland. Mercury Payment Systems’ rapid growth in the electronic payments market is directly attributable to the value and flexibility we provide our merchants and partners, and we stand by our business and pricing practices. We are proud of our consistently high satisfaction rates and low merchant attrition rates among merchant acquirers over the past 10 years.”