"We would like to help the merchant community increase the claims rate for the upcoming settlement by providing them with tools and a forum to become engaged and educated,” notes Anand Goel, Founder of Optimized Payments Consulting.
Atlanta, GA (PRWEB) May 07, 2013
On June 22, 2005, Photos Etc. Corporation, Traditions Ltd., CHS Inc., and other plaintiffs filed a class action complaint in Photos Etc. Corp., et al. v. Visa U.S.A. Inc., et al., No. 05-CV-01007 (D. Conn.), alleging, among other things, that the card networks artificially inflated interchange rates charged for credit and debit cards.
The settlement still requires Judge Gleeson’s final approval (anticipated in September 2013). Despite the long arc of this battle, it is important for merchants to educate themselves and participate in the claims process. Here are the four key provisions as stated in the Notice of Class Action Settlement:
1. Cash Settlement Fund – Visa, MC, and their issuing partners will make a $6.05 billion cash payout to merchants to compensate them for previous interchange charges.
2. Interchange Fund – Visa & MC will lower interchange fees for U.S. issued credit cards by 0.10% for 8 months, providing a total of $1.2 billion in additional relief.
3. Surcharging - merchants will be allowed to surcharge or charge higher prices on transactions paid with a credit card
4. Buying Groups – merchants will be allowed to band together to try to negotiate better interchange fees for their members.
U.S. Merchants who processed Visa and MasterCard credit and/or debit cards between January 1, 2004 and November 28, 2012 are members of $7.25 billion Visa and MasterCard settlement and eligible to participate in the claims process. “The claims rate for the $3.05 billion Visa/MC ‘honor all cards’ settlement in 2003 was 50-60% (based on card sales). We would like to help the merchant community increase the claims rate for the upcoming settlement by providing them with tools and a forum to become engaged and educated,” notes Anand Goel, Founder of Optimized Payments Consulting.
In terms of the claims payouts, each claimant’s payment will be paid in proportion to all claimants’ damages or interchange paid over the nine years. OPC’s settlement calculator will help a merchant estimate the monetary value from two settlement funds - the $6.05 billion Cash Settlement Fund and the $1.2 billion Interchange Settlement Fund. “So a merchant who averaged $1 million in Visa/MC sales over the last nine years could be entitled to $2,000 to $3,000 in a settlement claim…this is not a trivial amount,” notes Mr. Goel. The calculator can be found at: http://www.optimizedpmts.com/resources/calculators/settlement_calculator/.
To read more about the payment card interchange fee settlement or to access the settlement documents, go to https://www.paymentcardsettlement.com/en, the Official Court-authorized settlement website.
Optimized Payments Consulting (http://www.optimizedpmts.com) is an Atlanta, Ga.-based consulting firm that leverages its associates' broad payment industry experience and proprietary software to help businesses reduce their card processing costs.
(1) “Visa, MasterCard $7.25 Billion Fee Deal Wins Approval,” Bloomberg News, November 10, 2012. Business Week website, http://www.businessweek.com/news/2012-11-09/visa-mastercard-fee-deal-falls-too-short-retailers-claim