The National Grocers Association (NGA), an original plaintiff in the Visa and Mastercard class action suit filed in 2005, has expressed concerns about the proposed settlement.
While NGA is reviewing the text of the proposal filed Nov. 10, it noted the revised deal fails to address the underlying problem of anticompetitive price-setting in the credit card industry.
The proposed settlement offers only small, temporary reductions in swipe fees and limited rule changes while preserving the centralized system that allows the duopoly of Visa and Mastercard to dictate fees across the economy, eliminating incentives for competition and preventing merchants from negotiating lower fees.
As a result, small businesses and consumers will continue to pay the price, with the expense of card acceptance built into every grocery bill, regardless of whether a shopper uses a card.
“Independent grocers, operating on net margins of less than 2 percent, have been hit hardest by rising swipe fees, which grow faster than inflation and cost consumers and businesses over $100 billion annually,” said Chris Jones, NGA’s chief government relations officer and counsel.
“This settlement leaves Visa and Mastercard’s price-fixing structure fully intact, to the detriment of Main Street businesses and Americans everywhere.”
NGA continues to advocate for reform that introduces genuine competition and lowers costs for merchants and consumers. Meaningful progress will come from ending the price-fixing of interchange fees and from Congress reintroducing and passing the bipartisan Credit Card Competition Act, which would foster issuer-level competition and give retailers a choice in how payments are routed and processed.
“Independent grocers and their customers deserve genuine reform, not short-term concessions,” Jones said. “NGA has been at the forefront of this issue for over two decades, and we will always oppose weak settlements like this that fail to restore fair competition and deliver real relief for community grocers and working families.”
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