Publix has sued both Visa and MasterCard, charging that the two companies and their member banks engage in deceptive practices and restrict competition by not being willing to negotiate the transaction fees they charge merchants.
"In a time when more than 60 percent of our customers prefer to pay by debit or credit card, it is astonishing that interchange rates continue to rise," Maria Brous, Publix's spokeswoman, said in a statement. "As a result of Visa and MasterCard's business practices, there is no competition between banks, and ultimately every consumer pays the price when these credit card companies and their member banks impose 'hidden fees' on retailers."
In a statement released by Visa spokesman Paul Cohen, the company maintained that it "remains confident in its ability to defend interchange, a practice that not only provides a fair mechanism for fueling growth and sharing system costs, but has been upheld as legal in federal court” and that its system "creates enormous value for merchants, through increased sales, guaranteed payment, and faster, easier transactions."
It was just a week ago that four trade associations - the National Association of Convenience Stores (NACS), the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), and the National Cooperative Grocers Association (NCGA) – filed an antitrust and class action lawsuit against Visa USA, MasterCard and a number of their member banks, charging them will colluding to set artificially high fees. The suit charges the credit card companies with fixing transaction fees at anticompetitive levels, and the banks with conspiring to set interchange fees at what they call “supracompetitive levels.” The suit seeks both financial damages and injunctive relief.
The trade associations say that these fees cost the average American household $232 last year, and are substantially higher than the fees charged in any other industrialized country.
"In a time when more than 60 percent of our customers prefer to pay by debit or credit card, it is astonishing that interchange rates continue to rise," Maria Brous, Publix's spokeswoman, said in a statement. "As a result of Visa and MasterCard's business practices, there is no competition between banks, and ultimately every consumer pays the price when these credit card companies and their member banks impose 'hidden fees' on retailers."
In a statement released by Visa spokesman Paul Cohen, the company maintained that it "remains confident in its ability to defend interchange, a practice that not only provides a fair mechanism for fueling growth and sharing system costs, but has been upheld as legal in federal court” and that its system "creates enormous value for merchants, through increased sales, guaranteed payment, and faster, easier transactions."
It was just a week ago that four trade associations - the National Association of Convenience Stores (NACS), the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), and the National Cooperative Grocers Association (NCGA) – filed an antitrust and class action lawsuit against Visa USA, MasterCard and a number of their member banks, charging them will colluding to set artificially high fees. The suit charges the credit card companies with fixing transaction fees at anticompetitive levels, and the banks with conspiring to set interchange fees at what they call “supracompetitive levels.” The suit seeks both financial damages and injunctive relief.
The trade associations say that these fees cost the average American household $232 last year, and are substantially higher than the fees charged in any other industrialized country.
- KC's View:
- Roast ‘em.
