The $7 billion settlement in a retail industry lawsuit over Visa and MasterCard swipe fees announced over the weekend was initially reported as a victory for retailers. But as NRF and retail companies have begun to look more closely at the proposed deal, it’s not clear that there would be much long-term impact on the skyrocketing fees.
“The money is significant but money is only temporary – it’s here today and spent tomorrow,” NRF Senior Vice President and General Counsel Mallory Duncan said in a statement NRF released after the settlement was announced. “What we need are changes in the rules that bring about transparency and competition that would be here for years to come.”
Duncan told the CBS Evening News on Saturday that the settlement included one such rule change that appeared to be helpful — a provision allowing retailers to impose a surcharge when customers use a credit card. The provision wasn’t intended to result in actual surcharges but rather to be used as a tool to help retailers negotiate with card companies to reduce the fees.
But Duncan told American Public Media’s radio program Marketplace this morning that closer examination shows that restrictions on the surcharge provision make it “fall really short” of what was intended. In the absence of other significant changes in the settlement, “fees are going to start going right back up again because the tools are ineffective.”
NRF is continuing to work with retailers to assess the impact of the proposed settlement. In the meantime, the deal is not effective unless approved by a federal judge.