$6 Billion Visa, MasterCard Settlement Final; How to File for

Last month, the U.S. District Court for the Eastern District of New York approved a settlement in a class-action lawsuit involving merchants (as plaintiffs) and Visa, MasterCard and other defendants.

The case started in 2005 by retailers that flocked to the processing rates set by Visa, MasterCard, and others. The ensuing lawsuit asserted that merchants paid extra charges for accepting Visa and MasterCard due to an alleged conspiracy among the defendants.

In a 55-page judgment, U.S. District Judge John Gleeson said the settlement will promote competition. I don’t believe the payoff went far enough in adding transparency, preventing speed creep, and policing the deceptive tactics employed by some providers.

Who Can File a Claim?

The monetary part of the settlement is broken down into two funds.

  • For your first finance, any individual, organization, or other entity that approved Visa or MasterCard debit or credit cards at the U.S. between January 1, 2004 and November 28, 2012 could be eligible to receive a payment. The preliminary settlement (in November 2012) called for the defendants to pay an estimated $7.25 billion. The settlement is currently valued at $5.7 to $6.0 billion as a number of the biggest merchants in the U.S. decided to opt out possibly because accepting the settlement could place constraints on future lawsuits against the defendants.
  • The next fund relies on a part of interchange fees incurred by particular merchants that accepted Visa or MasterCard for an eight-month period which started July 29, 2013.

Official Settlement Website

The purpose of this guide is to briefly provide Practical Ecommerce readers with advice on the settlement. But, I encourage you to see the official site setup with this settlement — PaymentCardSettlement.com — often to find out more about the settlement and how to submit a claim.

Go to the official settlement site for upgrades and claim information.

The claim forms haven’t yet been approved by the court nor has the deadline for submitting them been determined. But, claim forms will be sent when the court approves it and decides when the claim form has to be sent to settlement participants. The official site is your very best source of advice going forward.

Supplier and Third Party Offers to File Your Claim

Some merchant account providers have told their merchants that they’ll automatically file the claim for the merchant unless the merchant tells them differently. I’ve seen some supplier notices and their charges range from 15 to 25 percent of the merchant’s settlement percentage. Moreover, I’ve seen some supplier finds state that they’ll charge a fixed fee (say $25) along with the percentage they take.

There might be a convenience in getting the supplier file the claim. But a number of the supplier notices I read felt like the supplier was interested in receiving windfall earnings than in servicing their merchants. I suggest that merchants determine how hard the claim process will be before permitting their supplier or any third party process the claim for a fee.

Another Important Note

Included in the preliminary settlement in November 2012, Visa and MasterCard were required to permit merchants to surcharge particular credit card transactions starting January 27, 2013. The surcharge was known as a”Checkout Fee.”

The checkout fee is a surcharge of around 4%, which merchants can increase the sale to pay credit card processing costs. The checkout fee can’t be added to debit card or prepaid card transactions.

Now that the settlement is finalized, merchants will need to be careful as some salespeople and providers may use the checkout fee for a means to manipulate savings investigations or convince merchants to change suppliers. I don’t feel that surcharging will benefit most merchants. In actuality, it can cause more damage than good for merchants. Also, bear in mind that surcharging isn’t permitted in most countries and Visa and MasterCard have very strict rules on surcharge signage and other aspects connected with surcharging. Read my January 2013 article “U.S. Merchants Can Now Charge for Credit Card Transactions” for additional information.


  • The lawsuit against Visa, MasterCard, others has been finalized.
  • You have to submit a claim to be compensated.
  • Use the official site as the origin of information.
  • Know the claim process before allowing a third party to document for you.
  • Be cautious with surcharging.

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