Some of the largest financial institutions in the world recently settled a case with retailers around the country, resulting in a payout of $7.25 billion to some 7 million merchants.
Bloomberg reports that MasterCard, Visa and major banks in the United States will make major payout to retailers that accept the aforementioned credit cards. The suit alleges that the two firms collaborated to charge high fees for payment processing. Under the terms of the agreement, merchants will have rates reduced as well.
Those who are expected to receive funds from the settlement said that the merchant services fees had damaged their bottom lines.
“We’ve paid more in credit card fees than we’ve made in profits in our entire company in recent years,” said business owner Michael Schumann in an interview with the source. “Overall we probably pay, depending on how good the business is, between $50,000 and $100,000 a year in credit card payments.”
While the settlement will hurt the credit card firms, some banks are stepping in to ease any potential damage accrual. The Wall Street Journal reports that Bank of America, Chase and Wells Fargo will cover part of MasterCard’s anticipated payout.Back To Blog