Walmart's (NYSE:WMT) U.K. grocery chain, Asda, has joined Morrisons and Arcadia in suing Visa (NYSE:V) over interchange fees for British retailers, Bloomberg reported on Friday (July 26).
Details of the lawsuit, which was filed in London on July 23, were not made public. Spokesmen for the chains would only confirm that the defendants are Visa and Visa Europe and that the subject is payment processing fees. Similar lawsuits were filed the same day by eight other U.K. retailers.
MasterCard (NYSE:MA) is already heading for U.K. trial after being sued over interchange fees by more than a dozen retailers, including Asda and Morrisons. A judge refused in May to delay that trial.
European Union courts have previously ruled that MasterCard's fees on cross-border card payments were anti-competitive and violated EU law. In addition, the European Union's financial services commissioner, Michel Barnier, said last week that the EU will cap interchange rates at 0.3 percent for credit card transactions and 0.2 percent for debit cards, saving retailers some $8 billion a year.
Meanwhile, both card brands are also in court in the U.S. amid the flurry of lawsuits surrounding the $7.25 billion interchange settlement. In May, Visa and MasterCard asked a federal court in Brooklyn to declare that their interchange fee structure and terms don't violate U.S. antitrust law.
If it seems like this is more legal fighting over interchange than ever before—well, it may be. Part of the cause is the coincidence of two court cases: the U.S. interchange settlement, with its never-sue-over-interchange-again terms; and a 2007 EU ruling that MasterCard overcharged for cross-border transactions, which is in the final stages of its appeals process. Another piece is the EU's planned interchange cap, which will likely generate more lawsuits.
But another element may be the recession, which has the U.S. in a painfully slow recovery and Europe still under water. While every other percentage in retailer-related finance seems to have dropped (growth, inflation, interest rates, revenues), there's been no similar decline in interchange. That may be pushing retailers who have simply bitten the bullet over interchange pain in the past to finally push back.
- See this Bloomberg story
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