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Monday, June 19, 2017

Visa, MC settle surcharging suit with Canadian merchants

Visa Canada and Mastercard issued brief statements, June 12 and 13, 2017, respectively, heralding the settlement of a lawsuit over surcharging rules brought against the card brands by Canadian merchants in 2011. The settlement is subject to court approval in the provinces in which the claims were brought ‒ British Columbia, Alberta, Saskatchewan, Ontario and Quebec.

Among the terms agreed upon, the card brands will:

  • Pay financial settlements of $19.5 million CAD, pre-tax, apiece
  • Revise their no-surcharging rules in a manner similar to their modified U.S. surcharging rules.

(Basic information on Visa's current U.S. surcharging rules, along with links to more detailed information can be found here: usa.visa.com/support/small-business/regulations-fees.html#2)

"We believe that an amicable resolution is in the best interests of our stakeholders," Mastercard stated. "Although we have strong defenses to the claims, a settlement avoids the continued costs and uncertainties that are inherent in litigation."

Visa expressed similar sentiments, stating, "Visa has settled without admission of any wrongdoing and remains of the view that it had strong defenses to all of the allegations advanced in the class proceedings."

Both companies emphasized protections would be in place for consumers. "The agreement to revise Visa's no-surcharge rule and allow merchants to impose checkout fees on credit card transactions includes consumer protections, such as a maximum surcharge limit and requirements for merchants to disclose their surcharging practices," Visa said.

In addition to mentioning a surcharge cap and requirement that merchants disclose surcharging practices, Mastercard stated there would also be "provisions to ensure a level playing field with cardholders of competing payment networks."

Revised rules are expected to come into effect 18 months after court approval of the settlement. end of article

Editor's Note:

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