Visa and MasterCard will pursue a multibillion-dollar price-fixing settlement over retailer swipe fees as opposition to the deal reached a level that would have allowed the card firms to walk away, according to one of the companies.
Ajaypal S. Banga, president and chief executive officer of Purchase, New York-based MasterCard, told investors last month that U.S. retailers accounting for more than 25 percent of total credit card purchase volume had decided to opt out of the settlement. Under the deal, which is subject to a judge's final approval Sept. 12 in Brooklyn, New York, federal court, the card firms and banks could have backed out if that threshold was reached.
"The defendants as a group had the right to terminate the settlement agreement because the volume threshold of 25 percent was exceeded, but elected not to do so," Banga said during a July 31 conference call with investors.
Paul Cohen, a spokesman for Foster City, California-based Visa, the world's largest payment network company, didn't immediately respond to a call today seeking comment. Visa CEO Charles W. Scharf said in a July 24 call with investors that the final figures for the opt-outs were still being calculated as of that date.
K. Craig Wildfang, a lead lawyer for the plaintiffs, didn't immediately respond to request for comment.
The case is In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 05-md-01720, U.S. District Court, Eastern District of New York (Brooklyn).