Will Interchange Settlement Actually Settle Anything?
Dec. 16, 2013
Headlines over the weekend hailed a federal judge’s final approval of a negotiated settlement as the end of a decade-long odyssey between merchants constantly seeking to reduce credit-card acceptance costs and card networks and issuing banks looking to maximize revenue as electronic payments continue to grow. But, according to at least one long-time industry observer, the matter is anything but settled.
While the settlement included a provision prohibiting merchants from suing over interchange-related matters in the future, the continuing appeals of the current case—successful or not—are not the end of merchants seeking redress through the legal and regulatory system, according to Mark Horwedel, CEO of the Merchant Advisory Group (MAG), a trade organization representing merchant interests. The MAG has merchant members that favor the settlement and those that oppose it. And, while Horwedel said the latter outnumber the former, the MAG does not have an official position on the settlement. What is clear to him, however, is that interchange will end up in the courts again someday.
“Contrary to the views expressed by the card networks, as well as the many public commentators who regularly express sentiments on their behalf, this case will not close the ongoing dispute with the networks by merchants,” he told CardNotPresent.com. “Merchants will continue to seek relief in the courts, through legislation, with regulators charged with enforcing existing laws addressing unfair competition and by creating alternate payment schemes to compete directly with the card networks.”