RILA says swipe fee settlement fails retailers

WASHINGTON — The Retail Industry Leaders Association (RILA) criticized a federal court’s preliminary approval of a proposed settlement in the long-running antitrust litigation over Visa and Mastercard swipe fees, arguing that the agreement fails to address the payments market’s underlying lack of competition.

NRF opposes swipe fee settlement

NRF stated the proposed agreement doesn’t address retailers’ concerns about limited competition in payments and fails to curb rising transaction costs.

Mass Market RetailersMMR

The U.S. District Court for the Eastern District of New York granted preliminary approval of the proposed settlement in the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, a case that has challenged the card networks’ interchange-fee practices for years.

In a statement, RILA said retailers remain burdened by “excessive and ever-increasing” swipe fees and contended that the settlement provides no meaningful relief for merchants.

“Retailers are disappointed by yesterday’s preliminary approval of the proposed Visa and Mastercard settlement,” the association said. “Retailers continue to face excessive and ever-increasing swipe fees in a broken payments market that lacks competition. The proposed settlement offers no meaningful relief and leaves intact the underlying system that enables Visa and Mastercard to dictate the rules and costs that merchants and consumers must bear.”

RILA previously filed objections to the settlement, arguing that it does not adequately address what retailers view as anticompetitive practices in the card payments market. The association said the agreement would preserve Visa and Mastercard's dominant positions while limiting future legal challenges to the current pricing model.

“Rather than changing the fundamentals of this monopolistic market, the proposed settlement enshrines them,” retailers wrote in their objection. “It locks in Visa’s and Mastercard’s dominant position and, via its release and waiver provisions, cuts off the legal rights of any other merchant or group to challenge the credit card cartel pricing model.”

Monica Welt, RILA’s general counsel, said the court’s action is only an initial step and that the organization will continue opposing the agreement.

“While disappointing, this decision is merely preliminary approval. It is not the final word in this case,” Welt said. “RILA intends to continue to advocate on behalf of retailers to obtain a different resolution, one that delivers lasting competition, meaningful fee relief, and a fairer payments marketplace for retailers and the customers they serve.”

The preliminary approval follows similar criticism from other retail industry groups, which argue that rising interchange fees continue to raise operating costs for merchants and ultimately contribute to higher prices for consumers. The litigation will now move to its next phase before any final approval is considered.