Washington: Major US banks as well as payment network giants Visa, Mastercard are set to shell out more than six billion dollars to settle a lawsuit brought by retailers who accused them of price fixing.
Retailers had alleged that the two largest payment networks conspired with banks to fix fees they charge retailers for processing customer credit-card transactions.
The dispute began in 2005, when merchants accused the companies of violating antitrust laws, by fixing the swipe fees, which average of about 2 percent of the purchase price, proceeds which generate more than 40 billion dollars a year for US banks.
According to the Los Angeles Times, the agreement follows a 2010 settlement with the US Justice Department in which the two payment networks agreed to allow four million merchants that were accepting only their branded cards to accept other credit-card brands as well and will now enable the merchants to put pressure on Visa and MasterCard to limit or reduce the fees.
Other banks in the case included Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Capital One Financial Corp. and Barclays.