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Proposed card settlement continues to raise concerns
October 7, 2013 by David Tente — Executive Director, USA, ATM Industry Association
Ever since the details of a proposed class action settlement between merchants and MasterCard/Visa were released last year, support for the deal has rapidly eroded.
There are two major components to the settlement: one awards about $7.3B in damages to merchants; another that grants injunctive relief in perpetuity to MasterCard and Visa.
Merchants may opt out of the damages settlement and pursue their own claims. But no merchant is permitted to opt out of the injunctive component of the settlement.
A growing number of merchants, including Target and Walmart, are uncomfortable with granting MasterCard and Visa a release from all present and future claims — including those resulting from rules that have yet to be written.
The ATM Industry Association filed an amicus brief last October in support of opponents and requesting that the settlement language be revised to specifically exclude ATM operators. That brief was re-filed in May in conjunction with final arguments on the proposed agreement.
The agreement defines the injunctive class as "all persons, businesses, and other entities that as of the Settlement Preliminary Approval Date or in the future accept any Visa Branded Cards and/or MasterCard-Branded Cards in the United States."
Since most ATM withdrawal transactions are initiated by "Visa Branded Cards and/or MasterCard-Branded Cards," the agreement would appear to include ATM operators — even though other language precludes them from participating in the class settlement.
Because statements were made during the course of proceedings that only merchants were meant to be included in the class action, ATMIA sought to have that language revised — or other language added — that specifically carved out ATMs from the agreement. So far, no such changes have been made.
More recently, a number of state attorneys general also have been in discussions with MasterCard and Visa amid concerns that the release could inhibit their ability to bring future enforcement actions.
They, too, are seeking a change in the injunctive language that would make it clear that the release covers the states only insofar as they act as merchants accepting credit cards. The court was informed on Sept. 9 that no agreement on language changes had been reached.
It is this perceived lack of interest in reasonable negotiations that raises serious concerns about the future intentions of these global card brands. Based on current actions, it appears likely that they would like to envelop as many parties as possible in the release — whether or not they are part of the original settlement class.
ATMIA continues to oppose the proposed agreement, unless changes are made to address these inadequacies.
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About David Tente
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ATM Industry Association (ATMIA)
The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.
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