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Table of Contents

Lead Story

Checks have staying power, paper not so much

Patti Murphy
ProScribes Inc.

News

Industry Update

Public, private effort to secure systems, reduce cyber crime

Appeals court revives ATM price-fixing case

Appeals court gives green light to CFPB challengers

First Data opens new chapter

Features

Bridging the EMV divide

The Mobile Buzz: Diners' technology wish list

Views

The very point of sale: Think big, go bold

Dale S. Laszig
DSL Direct LLC

Impact of scale on cost and margin in the U.S. merchant acquiring industry

Brooke Ybarra
First Annapolis Consulting

Education

Street SmartsSM:
The power of residual income - Part 1

Jeffrey I. Shavitz
TrafficJamming LLC

Who wins with AmEx full-service acquiring program?

Ken Musante and Jon Shipley
Eureka Payments LLC, Select Bankcard LLC

Legal ease: Choosing a lawyer for your payment business

Adam Atlas
Attorney at Law

Endemic lack of protection for card data in stores

Brand Barney
SecurityMetrics

Company Profile

AP Technology

New Products

Free online security learning center

SecurityMetrics Learning Center
SecurityMetrics

Business-driven video storytelling

Video Storytelling
Board Studios Inc.

Inspiration

The 'do' in the doldrums

Departments

Readers Speak

Letter from the editors

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

August 24, 2015  •  Issue 15:08:02

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Appeals court revives ATM price-fixing case

A U.S. appeals court on Aug. 4, 2015, reversed a lower court decision to throw out a lawsuit alleging MasterCard Worldwide, Visa Inc. and three large banks conspired to fix ATM charges. The class action suit was filed in 2011 in the U.S. District Court for the District of Columbia by a group consisting of consumers and ATM owners, operators and ISOs.

Plaintiffs were challenging card brand rules that prohibit ATM operators from taking advantage of better interchange rates and offering lower cardholder fees for transactions processed over PIN-debit networks that are not affiliated with Visa or MasterCard. Those rules are said to benefit major banks, which are equity shareholders of Visa and MasterCard, specifically Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., the plaintiffs argued. What's more, the rules amount to price fixing, raise the cost to consumers using ATMs, and violate Sherman Antitrust Act prohibitions against unreasonable restraints of trade, they claimed.

The suit, Sam Osborn, et al. vs. Visa Inc., et al., requests an injunction preventing MasterCard and Visa from further enforcing their rules and seeks damages for the higher prices cardholders paid to access ATMs.

"The anti-competitive rules have protected Visa and MasterCard from competition for network services with the result that consumers have been paying inflated prices for using ATMs, and fewer ATMs were deployed than otherwise would have been the case," said Jonathan Rubin, Managing Member of Rubin PLLC, a Washington, D.C., law firm. Rubin is lead counsel representing the National ATM Council (NAC) and independent ATM operators in the case.

Case returns to district court

A District Court judge dismissed the complaints in February 2013, contending the complainants' "standing," that is, the consumers and ATM owners, were not considered directly affected by Visa's and MasterCard's policies. The appeals court ruling rejects the lower court's findings and sends the case back to be litigated and ruled upon by the district court.

"The decision today affirms that our claims should be heard on their merits," said Steve Berman, Managing Partner at the law firm Hagens Berman Sobol Shapiro LLP, which is representing consumers in the lawsuit. Visa, MasterCard and the three banks involved declined to comment on the decision in the case.

Financial institutions dominated the ATM business throughout the 1980s. With the advent of ATM surcharging – fees paid by cardholders to ATM owners when accessing their bank accounts using ATMs not owned by their banks – free standing ATMs began popping up in all manner of nonbank locations. NAC estimates that 415,000 to 425,000 ATMs are situated in the United States today, more than two-thirds of which are operated by nonbanks.

NAC, headquartered in Jacksonville, Fla., champions the interests of independent (nonbank) ATM operators, owners and suppliers. "This is the first major initiative undertaken by the National ATM Council since it was formed," said Bruce Renard, the group's Executive Director. "We are trying to address some challenges facing independent ATM operators."

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

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