The U.S. Supreme Court had a chance to finally rule on the decades-long battle between retailers and banks over interchange, but decided to pass on the opportunity, leaving in place a lower-court decision to set aside a $5.7 billion settlement. Merchants have been fighting the settlement almost since the day it was approved in 2013 after nearly a decade of negotiations. The result, according to observers, is continued uncertainty over the cost of credit card acceptance and the continuation of a seemingly endless standoff between merchants and issuers.
“If this settlement had been approved, the structure of fees that drive up the prices of everything consumers buy would have been cemented into place forever,” said Mallory Duncan, senior vice president and general counsel for the Washington, D.C.-based National Retail Federation, in a statement. “Now something can finally be done to bring these fees under control.”
The settlement originally totaled $7.25 billion in July of 2012 when it was first negotiated, but merchants began opting out when they found they would be giving up their right to pursue further legal action forever. After the final approval, merchants still in the settlement appealed, as did the card networks. The case now goes back to federal court in Brooklyn where the parties will try to work out a new agreement.
- Reducing Payment Processing Costs