MasterCard wins switching fee suit
(12 June 2007 – USA) Credit card issuer Visa International will no longer be able to charge a settlement service fee to banks switching from its domestic debit card network, after MasterCard won a court ruling in New York.
The ruling started in the courts four years ago when Visa began to charge banks if they switched to issuing debit cards under the MasterCard brand.
MasterCard responded by filing a suit against Visa, saying the move was anti-competitive.
Visa ushered in the fee when it was charged US$2 billion as part of antitrust litigation brought by Wal-Mart and other US retailers.
"With this roadblock out of the way, financial institutions will not be deterred by this coercive fee and can make decisions based on their best judgment about quality of service, strength of brand and other competitive factors that benefit their cardholders," MasterCard said.
Visa said it may appeal against the ruling.
MasterCard responded by filing a suit against Visa, saying the move was anti-competitive.
Visa ushered in the fee when it was charged US$2 billion as part of antitrust litigation brought by Wal-Mart and other US retailers.
"With this roadblock out of the way, financial institutions will not be deterred by this coercive fee and can make decisions based on their best judgment about quality of service, strength of brand and other competitive factors that benefit their cardholders," MasterCard said.
Visa said it may appeal against the ruling.
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