NEW YORK Independent ATM operators called on a federal court here Friday to reject final approval of the landmark antitrust settlement between Visa and MasterCard and millions of merchants because the deal lumps them in with the merchants class of plaintiffs and could bar them from pursuing other claims in the future against the credit card networks.
The ATM Industry Association, in a brief filed with the U.S. District Court for the Southern District of New York, asserts that the proposed $7.25 billion settlement fails to distinguish between the millions of merchants involved in debit transactions who brought the antitrust challenge and ATM operators, which “are inherently different.” As a result, the provisions of the settlement which would bar plaintiffs from bringing additional or different claims against Visa and MasterCard would prevent the ATM operators from suing the card networks over other issues, claims the group.
Members of the group include Cardtronics, Triton, Fiserv, NCR, Diebold, Wincor Nixdorf and others.
The brief comes as the ATM operators’ separate antitrust suit against Visa and MasterCard over transaction fees has been dismissed by a federal court and the group is considering an appeal. Their suit claims that Visa and MasterCard force independent ATM operators to charge consumers the same fee all the time, even when their cards can access smaller networks that are cheaper for the ATM operators to use.
The brief notes that the Federal Reserve has distinguished between the merchants, who pay debit fees, and the ATM operators, who do not. “Despite these clear distinctions, the Settlement Class definitions are so broad that they could be read to include ATM Transactions,” argue the operators.
“Unlike merchants, ATM Operators do not pay interchange fees but rather receive them through a completely different type of transaction,” argues the group. “If the current class definitions remain in place, ATM Operators could be deemed to have released their claims without being entitled to the benefits of the settlement.”
Under the terms of the landmark settlement, an estimated seven million merchants are supposed to share a $7.25 billion to be paid by Visa, MasterCard and a handful of banks, and in more than $1 billion of rebated debit fees, and the card networks are supposed to drop their bylaws preventing the merchants from offering discounts to consumers who use cash for transactions. The court has granted preliminary approval of the deal and will rule on final approval later this year, even as hundreds of merchants groups and major retailers have lined up against it.
