BDO Knows Retail & Consumer Products Alert: Interchange Fee Settlement Continues

Back in December 2013, a U.S. District Judge approved a $5.7 billion antitrust settlement with Visa and MasterCard. This massive settlement—the largest of its kind in U.S. history—was aimed at reconciling years of angry complaints from retailers surrounding their inability to negotiate interchange fees, or the percentage of sales they must pay to banks to accept credit cards, with these two companies. Retailers claimed that, in addition to cutting into their revenues, agreements from the banks prevented them from incentivizing customers to use alternative forms of payment.

As it turns out, however, the settlement is not over quite yet. Following the December approval, a federal court dismissed an appeal lodged by the National Retail Federation (NRF) that the settlement was inadequate. As a result, the NRF and the National Association of Convenience Stores announced June 2 that they will petition the Supreme Court to hear the case and finally provide closure to this drawn-out debate. Depending on the Supreme Court’s ruling, the situation could shift dramatically, and every retailer’s fate regarding interchange fees could be cemented or renegotiated altogether. To learn more about the background of the case and the potential ramifications of the settlement, read our latest BDO Knows Retail & Consumer Products Alert, and let us know your thoughts in the comments section below.