Visa Inc. and MasterCard Inc. are set to pay out about $1.1 billion to merchants across the United States as part of an antitrust settlement.
The settlement was the largest of its kind in the United States and will see payments going out by mail to about 634,000 retailers, lawyers said Tuesday.
"This is likely the largest single payment to businesses in a class action in history, and it comes at a time when banks have all but stopped lending to the smaller retailers that make up the backbone of the class," said Jeffrey Shinder of the Constantine Cannon law firm in New York.
Constantine Cannon negotiated an overall $3.4 billion settlement in 2003 after seven years of litigation. The $1.1 billion payout is the last installment.
In addition to financial compensation, the settlement bars Visa and MasterCard from forcing merchants to accept their branded signature debit card products as a condition of accepting the companies' credit cards.
The settlement also stipulated clear marking of cards to differentiate between debit and credit.
"The timing of these checks couldn't be better. They come during a difficult holiday season and will help retailers position themselves to participate in the economic recovery that lies ahead," said Tracy Mullin, the president and chief executive of the National Retail Federation.
Small retailers were in the majority, but the plaintiffs included the giant discount retailer Wal-Mart Stores Inc.
In April, the European Commission dropped an antitrust case against MasterCard Europe after it reduced fees on cross-border payments.
Europe's top competition watchdog had threatened to fine the company if it did not make the change.
MasterCard agreed to cut fees on consumer credit card transactions by more than half, to 0.3% of the purchase amount.
