For Immediate Release
Contact:  J. Craig Shearman, 202-626-8134, [email protected]

Merchants Laud Consolidated Complaint Against Visa and MasterCard

Washington, D.C. (April 25, 2006) -- The Merchants Payments Coalition (MPC) today said the amended filing of an antitrust, class-action lawsuit yesterday by merchant groups representing thousands of merchants across the country sends a clear signal to Visa and MasterCard that retailers will not tolerate unlawful price fixing of credit card interchange fees that harm retailers and pick the pockets of American consumers.

“The system is clearly broken,” said Mallory Duncan, chairman of the MPC and senior vice president and general counsel at the National Retail Federation. "In virtually every other market, competition results in lower prices for consumers, but that’s not the case with interchange fees. Instead Visa and MasterCard compete to charge the highest interchange fees in order to provide the banks that issue their cards with maximum profits.”

The amended consolidated complaint, filed in the Eastern District of New York updates an earlier complaint filed in September 2005 to include debit cards.  Duncan said the price fixing of interchange is equally problematic in debit cards as it is in credit cards.  “Whether debit or credit cards, the fact is that Visa and MasterCard charge Americans some of the highest interchange fees in the world," he said.

The MPC, a coalition of some 20 trade associations representing retailers, restaurant, supermarkets, drug stores, convenience stores, gas stations, on-line merchants and other businesses that accept debit and credit cards, is fighting for a more competitive card system.  In addition to a more competitive fee structure, the coalition is calling for more transparency as it relates to the hidden nature of the rules that govern interchange.

"It's not just that the fees are fixed, they’re also hidden," Duncan said.  "Credit card companies forbid merchants from disclosing the fees and – since they’re hidden -- can increase the fees by any amount any time they want.”

Several members of the MPC are litigants in the lawsuit, including the National Association of Convenience Stores, the National Grocers Association, the National Restaurant Association, and the National Association of Travel Plazas and Truckstops.