Restaurant association says proposed legislation is needed in the long term
Mastercard and Visa on Tuesday reached a nearly $30 billion settlement to limit credit and debit card fees for merchants by cutting their U.S. credit card interchange rates, or swipe fees, for at least five years.
The antitrust settlement would be one of the largest in U.S. history, and, if approved by the court, would resolve most claims in nationwide litigation that began in 2005.
The agreement, according to CSP Daily News, includes:
Interchange rate reduction. Payment networks, including Visa and Mastercard, will reduce the published and effective interchange rate on U.S.-issued consumer credit and commercial credit transactions at U.S. merchant locations.
Interchange rates will not go up. The agreement will cap the reduced credit interchange rates for five years, providing a level of cost certainty long sought by merchants.
New ways to manage costs. The settlement gives merchants greater flexibility at the point of sale, including the opportunity to steer to preferred payment methods and more options around surcharging. It also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.
The National Restaurant Association had joined with other retailers in seeking legislation to contain swipe fees and the ensuing costs.
Sean Kennedy, the group’s executive vice president of public affairs, said in a statement that the settlement “is a small reprieve, but wholly inadequate for restaurants suffering with record-breaking swipe fees.
“This temporary discount won’t have a lasting or significant impact on costs,” Kennedy said. “When you’re spreading out a settlement – even one this big – equally among millions of business owners over a few years, there will be a negligible impact on the costs restaurant operators pay to accept credit cards.”
He said the Credit Card Competition Act “remains the best solution to fixing the broken credit card processing market.”
A spokesperson said credit card swipe fees are the third-highest expense for many small business restaurants, eclipsed by cost of food and labor.
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