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Table of Contents

Lead Story

Winning the high-stakes holiday shuffle

News

Industry Update

New ROAM CEO focusing company

Happy complicated first birthday, Durbin

Visa, MasterCard settlement has support

A window into Global Payments

Trade Association News

Features

What you need to know before launching a new product

Marc Beauchamp
Performance Training Systems Inc.

A rewards app that 'burns'

Selling Prepaid

Prepaid in brief

MasterCard reloads with Western Union

How to drive a positive customer experience – and silence critics

Views

Is there a kiosk in your pocket?

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
Formal sales training or OJT?

Jeff Fortney
Clearent LLC

Fraud alert: Threat level rises

Nicholas Cucci
Network Merchants Inc.

Shifting to insight-selling

Dale S. Laszig
Castles Technology Co. Ltd.

Tighten merchant inventory control, boost the bottom line

Rick Berry
ABC Mobile Pay Inc.

Implementing 3-D Secure

Chandan Mukherjee
PayCube Inc.

Company Profile

Washington Bancard Merchant Services LLC

New Products

Next-gen POS doubles as fundraiser

V8 by Dejavoo Systems
Unified Payments LLC

E2EE protection for EMV, too

SAFE-T Suite
Elavon Inc.

Inspiration

Strategic honesty

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

October 22, 2012  •  Issue 12:10:02

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Visa, MasterCard settlement has support

Retailers should know early in 2013 if the proposed preliminary settlement of retailer claims that Visa Inc. and MasterCard Worldwide interchange rates violate U.S. antitrust laws will be accepted by the Brooklyn Federal Court. So said Patrick Coughlin, one of the attorneys who negotiated the settlement on behalf of retailers, in an interview with The Green Sheet.

A number of national interests led by retail associations and some of the nation's largest retailers, including Wal-Mart Stores Inc. and Target Corp., are urging rejection of the settlement. Nonetheless, Coughlin said the preliminary approval will be filed with the court Oct. 12, 2012, and opponents will have 30 days following the filing to make formal opposing arguments. He said the "settlement agreement is the product of long negotiations," and he expects Judge John Gleeson, the presiding judge, to approve it.

Settlement context

According to Coughlin, his confidence in the deal needs to be understood in context, and the first thing to note is that the litigation was brought after the 2004 settlement of similar claims brought by a coalition of retailers led by Wal-Mart.

"It's interesting that in 2004, Wal-Mart didn't get any changes to the interchange system, it got a lot less money, and it left Visa/MasterCard in the control of the banks," he said. He pointed out that in the proposed settlement merchants would, among other benefits, divide $7.25 billion, have more freedom to disclose card fees, and be able to impose surcharges to recapture those fees and steer customers to less expensive payment options. Visa and MasterCard will also have to negotiate in good faith with significant bargaining groups, he added.

Coughlin said a number of large retailers agree with his analysis. Among the plaintiffs supporting the settlement are nationally known grocers, such as The Kroger Co. and Pathmark Stores Inc., and pharmacies, such as Rite Aid Corp. and Walgreen Co., he added. "People don't really understand how many large merchants support this settlement," he said. "That's a story that hasn't gotten out yet."

Impact of settlement limited

Coughlin believes the changes brought by the settlement, if approved, would be significant. The litigation pushed Visa and MasterCard to "undertake IPOs and get out from under control of the banks," he said. The decision to make the card companies public corporations, coupled with the changes outlined in the proposed settlement, should change the options available to retailers, offer more competition and result in lower interchange rates, he noted.

As to retailers opposed to the proposed settlement, Coughlin said he respects their right to want change, but it takes legislation not litigation to limit interchange rates. "You have to look at who it is that opposes this settlement and what they are trying to do," he said. "Wal-Mart and Target are trying to get their own credit systems up and going. We have 8 million merchants out there who won't have their own credit card system. We welcome more competition for Visa and MasterCard."

Until Congress decides to change interchange rules, people will at least know they are paying 2.5 percent to 3 percent more when they use certain card products if the settlement is approved, according to Coughlin. "As a result of this transparency you will see more competition than ever before," he said.

For additional news stories, please visit www.greensheet.com and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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