If you process card payments, you might’ve heard about the recent Visa MasterCard class action settlement related to the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. If you accepted a Visa or MasterCard between January 1, 2004, and January 25, 2019, the $5.54 billion settlement potentially covers you, and Host Merchant Services is available to help!
Host Merchant Services values you as a customer and recognizes your hard work. That is why, as your loyal service provider, we have made your work easier after consulting and decided to work with Brownstone Recovery, which has extensive experience in class action settlements and interchange fees, to help you file your claim.
What Is the $5.5 Billion Visa MasterCard Class Action Settlement?
To address antitrust complaints about card transaction fees and pricing, Visa, MasterCard, and merchants reached a large legal agreement totaling more than $5.5 billion. After a protracted court struggle, the lawsuit that resulted in this settlement was filed in 2005.
Visa and Mastercard allegedly broke the law by imposing interchange fees on retailers and companies accepting Visa or MasterCard debit or credit cards. Due to these costs, which range from 1% to 2% of the overall transaction value, many shops encouraged customers to utilize alternative payment methods.
As a result of the settlement, terms will change for businesses, impacting chargeback policies and transaction fees. These changes aim to create a more equitable setting for companies handling credit card complaints. These adjustments will specifically affect small business owners, affecting their pricing policies and sales figures. Their income stream management and product pricing may also change as a result of the changes.
Lead counsel negotiated the settlement on the merchants’ behalf, ensuring their interests were fairly represented. This legal counsel greatly influenced the agreement’s terms. Along with lead counsel, member banks contributed significantly to the settlement by working to negotiate its terms.
As of December 1, 2023, the lawsuit—pending for almost ten years—had been settled for $5.54 billion. Nevertheless, since both parties decided to settle, it was not decided whether Visa or MasterCard was correct or incorrect. The claim administrator will send out email claim notices in December 2023 and January 2024. May 31, 2024, is the deadline for submitting a claim for the $5.54 billion Visa MasterCard settlement.
A Brief Overview of the Settlement
1. Swipe Fee Limits:
The settlement aims to curb the steady increase in swipe fees, delivering an estimated $29.79 billion in savings to merchants over the next five years through three key measures:
- As early as April 2025, the interchange rates for domestic credit programs offered by Visa and MasterCard will decrease by four basis points (bps) for a period of three years.
- Beginning in April 2025, system-wide credit interchange rates for Mastercard and Visa will drop by 7 basis points over five years.
- A five-year ban on increases to applicable credit interchange fees, starting from December 31, 2023, as the baseline. Fees may go up after this time.
2. Competitive Pricing:
The settlement removes restrictions that hinder competitive pricing:
- Merchants can charge for using Visa or MasterCard, even if they cannot charge for American Express.
- Merchants can offer discounts at the issuer level, steering consumers toward preferred cards and promoting competition among credit card networks.
- Merchants can adjust prices based on costs associated with different cards, promoting transparent pricing.
- Merchants can provide customers with truthful information about why a charge for card use is being applied.
3. Negotiating Power for Small Merchants:
The settlement strengthens small merchants’ ability to negotiate swipe fees:
- Visa and MasterCard must negotiate with merchant buying groups in good faith, with a streamlined process for resolving disputes.
4. Merchant Education Program:
$15 million will be allocated for an independent merchant education program, free to all merchants. This program aims to advise merchants on the settlement and help them utilize the new rules effectively.
Learn more about the Visa MasterCard Class Action SettlementHow Does This Affect You?
With the formal approval of the Visa and MasterCard Class Action Settlement, claiming your share has advanced significantly. To oversee the settlement funds’ administration and distribution, the Courts appointed a Special Master and announced a final enrollment period from December 1, 2023, to May 31, 2024.
This class action lawsuit, which resulted in a more than $5.5 billion settlement, includes all retailers who used Visa or MasterCard between 2004 and January 2019.
Despite reservations voiced at the Fairness Hearing on July 11, 2019, the decision upheld the proposed settlement’s fairness and sufficiency. Now that the last administrative matters have been resolved, the Court can establish an enrollment deadline for the claim form and reveal the official details of the form, which still need to be made public.
Host Merchant Services has partnered with Brownstone Recovery Group to streamline the process for filing a claim for eligible merchants. Host Merchant Services has negotiated a favorable rate for its clients and collaborated with Brownstone to simplify enrollment.
What Are Your Options?
- Option 1:
Take no action, and you will not receive your portion of the settlement. Note: Participation in this class action is necessary to obtain compensation.
- Option 2:
Take immediate action by Retaining our partner – Brownstone Recovery Group – who will work in your stead to recover your portion of the settlement. Their areas of expertise include interchange fees and class action settlements. They only charge fees once the claim is paid, so you can concentrate on running your business while they handle your claim.
Host Merchant Services has negotiated a favorable rate for our clients and worked with Brownstone to simplify enrollment through the form below:
Brownstone Recovery Group
- Option 3:
You can file your own claim by working with the official settlement administrator. Visit this page for information and contact details for no-cost assistance. Claim forms are available online.
Why Choose Host Merchant Services and Brownstone?
Host Merchant Services has partnered with Brownstone, a class action settlement expert, to help our eligible merchants recover potential cash from this settlement. You can skip the hassle of gathering, analyzing, and submitting claim forms by joining us. If you’re a Host Merchant Services merchant, you can register now.
Choosing Host Merchant Services and Brownstone is a strategic decision for businesses seeking compensation from the Visa and MasterCard class action settlement. Brownstone Recovery’s experience and focus on settlement recovery offer significant advantages, including expertise in handling interchange fees and class action cases, particularly the Visa and MasterCard settlement. This background equips them to understand the intricacies of the legal proceedings, track potential changes, and streamline the claim filing process.
Understanding the basics, staying informed, and exploring your options is essential to make decisions that best serve your business. If you need help, Host Merchant Services is here to assist.
Frequently Asked Questions
Who is eligible for the settlement?
Any business that accepted Visa or MasterCard transactions from January 1st, 2004, to January 25th, 2019, is part of the class action lawsuit and may be eligible for compensation from the $5.5 billion settlement fund.
How much money will businesses receive from the settlement?
The total settlement fund is $5.5 billion, distributed to eligible merchants who have not excluded themselves and file a valid claim. The amount each business receives will depend on the number of participating merchants and the estimated interchange fees they incur.
How can businesses claim their share of the settlement?
To receive compensation, eligible merchants must file a valid claim. Claim forms began mailing out in December 2023 and are also available online. The filing process closes on May 31, 2024.
What changes are included in the settlement beyond monetary compensation?
In addition to monetary relief, the settlement includes provisions to reduce interchange fees by 4-7 basis points for five years. It also includes changes to network rules, providing more flexibility for merchants in managing payment card transactions.
