Interchange Settlement on Track for Sept. Decision
Aug. 26, 2013
While most of the attention on the interchange battle has been on the debit side recently , the long-running litigation saga of credit-card interchange will be heating up over the next few weeks. Recently, MasterCard’s CEO told analysts and media that, even though the percentage merchants that have chosen to opt out exceeds the threshold under which they, as defendants in a class-action suit (along with Visa and many top U.S. issuers), could choose to abandon a $7.25 billion settlement proposal that was struck more than a year ago , the defendants have decided to stick with the deal.
U.S. retailers accounting for more than 25 percent of total credit-card volume in the U.S. have officially chosen to opt out of the settlement. A hearing is scheduled for Sept. 12 in New York where a federal judge will render his final decision on whether or not to approve the proposal, which has faced stiff opposition from many top retailers .
“The defendants, as a group, have the right to terminate the settlement agreement because the volume threshold of 25 percent was exceeded, but elected not to do so,” said MasterCard CEO Ajay Banga. “We expect most of the larger merchants who opted out will file separate actions to recover damages and many of them have already started to do so. We remain confident that the settlement will be approved.”