NEW YORK – Another key merchants group weighed in Friday against the Visa and MasterCard antitrust settlement, putting increasing pressure on the landmark deal that must still be approved by a federal judge.
The National Cooperative Grocers Association joined the National Grocers Association, the National Association of Convenience Stores and the National Community Pharmacists Association, as well as retail giants Walmart and Target in opposing the deal, which would settle civil antitrust charged against the two cards giants.
"This settlement falls short of providing true reform in the system by continuing to allow credit card issuers and credit card networks to exploit retailers and consumers without risk of repercussion,” said Robynn Shrader, head of the cooperative grocers group, one of the named plaintiffs in the antitrust suit.
“NCPA joined this lawsuit to achieve meaningful, long-term reforms to the current swipe fee system,” said Douglas Hoey, CEO of the pharmacists group. “This proposed settlement came woefully short by not imposing necessary fundamental changes to the structure of the industry and the rules affecting merchants, particularly small business community pharmacies.”
The proposed settlement call for Visa and MasterCard to pay seven million retailers $6 billion and a dozen banks another $1.2 billion to settle charges the card networks violated the Sherman Antitrust Act by conspiring to set interchange fees for credit card transactions. The settlement also calls for a $1.2 billion reduction in fees over the next eight months and allow retailers to encourage other forms of payment by assessing consumer surcharges for paying with Visa or MasterCard.
But several of the retail groups reject the proposal. “The practice of surcharging is an inadequate solution to the broader problem of swipe fees,” the cooperative grocers association said Friday.
The settlement also does not limit credit card issuers and credit card networks from hiking related fees in the future, the grocers group said, and would protect credit issuers from future lawsuits.
The cooperative grocers said it urges other retailers to reject the proposed settlement and push for a revised settlement that “holds credit card issuers accountable, ensures competition in the market and encourages innovation in payment systems.”