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ATMIA refiles amicus brief in card settlement as states mull merchant surcharge bans

April 5, 2013

On March 29, the ATM Industry Association refiled its amicus brief in the U.S. District Court of Eastern New York, restating the association's opposition to the proposed class action settlement between merchants and MasterCard/VISA.

ATMIA reiterated its argument that the language of the agreement is so broad and vague that it might be construed to include ATM deployers, though the original claims were made by merchants. Besides the ATMIA, 10 of the 19 original plaintiffs have also stated their opposition to settlement.

ATMIA is not directly involved in the case, but as a party that could be affected by the settlement, the association is allowed to documents for judicial consideration as a "friend of the court." ATMIA filed its original brief last November before the settlement received preliminary approval; the refiling ensures that ATMIA concerns will be part of the court's considerations as it reaches a final decision in the case. A ruling is expected in midsummer.

In the proposed settlement, plaintiffs would share a $7 billion payout from the card companies and receive temporary interchange reductions. Merchants would also win the right to impose surcharges on credit card purchases.

However, between consumer opposition and state legislation, merchants might not get to avail themselves of that right. 

Eleven states ban the imposition of merchant surcharges and 18 more are in various stages of considering such bans, according to a recent CU Times report, which added that retailers opposed to the settlement have pointed to state bans as one of its more glaring flaws.

Additionally, retailers find the rules for implementing a surcharge cumbersome and limiting, CU Times said. In order to surcharge, the retailer must first inform the card companies and then adhere to specific rules for customer notification. Additionally, they may not charge more than the interchange rate or 4 percent of the transaction value.

*California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas and, as of April 1, Utah 

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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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