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And finally… ‘fee’ fi fo fum, judge smells a ‘derisory’ amount
A US district judge has rejected Visa and Mastercard’s “massive” $30 billion settlement with merchants.
The agreement aimed to temporarily reduce and cap credit interchange rates until 2030.
The District Judge of the U.S. District Court for the Eastern District of New York, Margo Brodieissued an order stating that the court found it unlikely to grant final approval to the settlement. It was argued that the settlement unfairly favored small traders over larger ones.
Consequently, Plaintiff’s request for preliminary approval of the settlement was denied.
In the court filing, the judge wrote that “the estimated $6 billion in annual savings to merchants pales in comparison to the $100 billion that merchants paid in interchange fees on Visa and Mastercard transactions in 2023,” adding that the payment services giants could “withstand a substantially larger judgment.” Bloomberg News reports.
The rejected settlement would have allowed retailers to charge more for Visa or Mastercard transactions and steer consumers to cheaper cards. Now, the parties involved must negotiate a better deal or proceed to trial.