Judge rejects rejects Visa, Mastercard $30 billion swipe fee settlement

A U.S. judge overseeing a $30 billion preliminary swipe-fees settlement between Mastercard, Visa and leading retailers formally rejected the settlement on Tuesday.

Many retailers and retail trade groups had opposed the deal, which was announced in March and subject to court approval. They objected that the fees would remain too high, the savings not permanent and that Visa and Mastercard would still retain too much control over how card transactions are handled.

The settlement called for the average swipe fee to fall at least 0.04 percentage points for three years, and stay at least 0.07 percentage points below the current average for five years.

“The reduction of just a few basis points is within the range that swipe fees have fluctuated over the years and amounts to pennies on the dollar,” Stephanie Martz, chief administrative officer and general counsel, National Retail Federation, said in March. “The fact remains that these fees are an unfair business practice that harms merchants and consumers and benefits banks.”

The settlement would be among the largest in U.S. antitrust history and would resolve most claims in nationwide litigation dating back to 2005. The decision by U.S. Judge Margo K. Brodie to reject the proposed settlement could force Visa and Mastercard to negotiate a settlement more favorable to merchants, or go to trial, reported Reuters. The judge will issue a written opinion explaining her reasoning after letting merchants, Visa and Mastercard propose redactions.