Many small business owners charge that the settlement deal with Visa and Mastercard does little to reduce swipe fees.
About 1,200 merchants and trade associations who object to the terms of a settlement made with Mastercard and Visa this summer are filing court papers this week to overturn it, according to Bloomberg on Friday.
The settlement, which returns $7.2 billion in fees to card accepting merchants and temporarily lowers the interchange rate they must pay, caps more than seven years of litigation between Visa and Mastercard and the merchants who accept their cards. District Court Judge John Gleeson, who adjudicated the case in Brooklyn, is expected to approve the agreement this month.
Among the merchants who object to the settlement are The Neiman Marcus Group, Saks, 7-Eleven, Dollar General, Expedia, Gap, and Limited Brands, Bloomberg reported.
Trade associations such as the National Association of Convenience Stores, the National Community Pharmacists Association and the National Restaurant Association have also joined the petition. Those associations have thousands of small business members.
The merchants and the trade associations are covered in the settlement agreement. But they allege the settlement does little to make swipe fees charged by the card companies more transparent or competitive, Bloomberg reported.
In August, The National Association of Conveniences Stores, which represents 148,000 conveniences stores in the United States with nearly $700 billion in sales annually, told Inc. the settlement will do little for merchants, who pay about $50 billion annually in interchange fees. The settlement also allows merchants to add a surcharge to consumer credit card transactions, up to about three percent.
"We are expressing our displeasure and we reject the settlement; this does not do anything to fix the broken system and it could possibly make things considerably worse for retailers and their customers," Jeff Lenard, a NACS spokesman, told Inc.
The case, which represents 7 million merchants nationally, is the largest class action in history.