In opposition to the recent agreement reached between Visa, MasterCard and retailers, the National Retail Federation (NRF) announced that it is prepared to go to court to fight and hopefully block the settlement, which the organization argues will negatively impact merchants across the country. The NRF has been authorized by its board of directors to go to court if necessary. The organization is hoping that several aspects about the settlement will be brought to light that were left out beforehand, such as the fact that consumers are charged hundreds of dollars each year through the swipe fees.

NRF argues settlement not fair to retailers, consumers

The agreement with MasterCard and Visa states that retailers can no longer sue the companies over swipe fees. This includes merchants who do not even exist yet. The NRF argues that this provision is unfair and can only result in further violations by the firms, as they can raise swipe fees at any time.

"The National Retail Federation categorically opposes the proposed settlement," NRF President and CEO Matthew Shay said. "It does nothing to curb the anticompetitive behavior of Visa and MasterCard, and instead ensures that swipe fees paid by retailers and their customers will continue to rise while barring any future legal challenges. The proposal is a lose-lose-lose for merchants, consumers and competition. NRF will take any and all steps necessary to oppose the settlement as it is currently proposed and will work toward real reform of the swipe fee system."

Swipe fees cost merchants and customers billions

Swipe fees are collected by Visa and MasterCard from each transaction that is made, whether at brick-and mortar locations or online. In total, these fees come to approximately $50 billion each year. This accounts for the third highest expense paid for by retailers, behind workers' salaries and benefits. For online merchants, swipe fees can be as much as three times higher than those paid by other merchants.

The NRF also states that the suggestion by Visa and MasterCard for retailers to charge credit card paying shoppers more for these transactions is pointless, as businesses want to decrease fees for consumers.

"A key question for the judge is whether this settlement is fair to the nation’s retailers," Shay said. "From what we have heard, it unequivocally is not. NRF's membership reflects the vast majority of retailers from Main Street small businesses to some of the nation’s best-known brands."

This entry was posted by Retail Pro on Thursday, September 13th, 2012 at 2:05 am .