Us Retailers Unite In Bank Card Suit

Most of the US retailers combined to challenge Visa and MasterCard in a potentially multibillion dollar antitrust suit.

The National Retail Federation, representing 1.4 million merchants, joined Wal-Mart Stores, The Limited and Sears, Roebuck and Co to fight against being forced to accept both credit and debit cards.

The bankcard companies require merchants accepting their credit cards to also accept their debit cards, which the plaintiffs contend is costly and illegal.

The expanded suit, building on an original filing last fall, added MasterCard as a defendant, added new plaintiffs and combined several existing suits. The filing was made in Federal District Court in New York.The expanded suit is another headache for the bankcard companies, which are already being investigated by the Justice Department in an unrelated case involving American Express.

 

In dealing with the merchants, the bankcard companies say the integrity of their brands requires that both debit and credit cards be accepted.

You can imagine how the brand would be harmed if merchants were free to accept some cards and not others, she said. In a statement Visa said it, too, would vigorously defend its position.

The merchants argue that they have paid roughly $740 million in excess fees over the past two years and will pay another $900 billion this year. If the suit succeeds, MasterCard and Visa would face the triple damages required in antitrust cases, which might approach $5 billion.

The lead attorney for the merchants, Lloyd Constantine of Constantine & Partners in New York, said that handling cash, processing a check or using an ATM costs WalMart only 7 cents to 15 cents for a $100 purchase, but debit cards cost far more.