The National Grocers Association has joined other retailers including Wal-Mart (WMT) and Target (TGT) in voicing opposition to a recent agreement between merchants, Visa (NYSE:V) and MasterCard (MA) and a number of large banks over credit card swipe fees.
The trade group primarily represents independent grocers. It joined the lawsuit seven years ago "to bring about real reform of the anticompetitive credit card swipe fee system," Peter Larkin, the association's president and chief executive said in a statement Thursday.
"This proposed settlement agreement fails in this regard by allowing Visa and MasterCard to continue their dominant anticompetitive practices. Meanwhile, merchants and consumers will continue to pay exorbitant swipe fees with no hope of reform. NGA's members are also concerned about Visa and MasterCard's ability to use their dominance to prevent emerging and innovative lower cost payment options.
Supporters of the proposed settlement are downplaying concerns that the discontent will be enough to derail it.
"It's not unexpected that some will express disappointment with a settlement. It's nearly always the case with settlements that you have a compromise that isn't what anyone hoped for in the beginning. But it's the best that could be achieved with a lengthy, detailed negotiation process where all sides had to give up something," Trish Wexler, spokeswoman for the Electronic Payments Coalition, said in a statement responding to the NGA announcement.
"It is not rational to suggest that the judge — who has been witness to this intense process — would now suddenly have a change of heart and find the settlement to be unfair or inadequate, simply because a handful of individual organizations want more," Wexler said, also citing a recent Keefe, Bruyette & Woods analysis predicting that opposition will likely not be enough to overturn the settlement.
Walmart, Target, the National Association of Convenience Stores and now the Grogers Group are a small number of individual organizations? We're starting to get to a pretty significant portion of the national transaction volume stating that they'll likely opt out of the settlement, and it's got to be getting close to that 25% threshold that can put the entire deal at risk.
With the biggest retailers in the country stating they're against the terms, and Visa/MC stating that all major retailers have been involved all along and agreed to the terms, it leaves us outsiders and amateurs confused amidst the legal posturing.