On June 30, a federal appeals court shook things up by overturning the multi-billion dollar lawsuit settlement involving Mastercard and Visa. The settlement initially occurred in 2012—seven years after merchants filed the lawsuit—and received final court approval at the end of 2013. It ushered in the U.S. surcharging era, even though surcharges have not infiltrated Commercial Card programs like many feared. Given the latest court action, we have to wonder, “What’s next?”   

Will the card networks revert back to the old “no surcharging” rules? I doubt it because the future is unknown. The card networks would not want to change something now if they might have to change it again later. More litigation is likely. Mastercard and Visa might initiate an appeal with a higher court. It could even reach the Supreme Court at some point. Alternatively, they could try to stay out of court by working out a new settlement with merchants.

Why Was the Settlement Repealed?

The settlement was opposed by many merchants, including big names like Walmart and Amazon. One point of contention was that merchants would not have the right to sue the networks over card fees in the future. The judge also noted that merchants were inadequately represented; their attorneys earned millions for getting a deal done. For details, visit the official settlement website.  

Speaking of the Supreme Court...

Last month, a group of merchants in Texas (a state that has outlawed surcharging) asked the U.S. Supreme Court to revisit the previous court decision that went against them and their claim that “no surcharge” laws violates their free speech rights. The outcome is pending.

For more information, see surcharge news past and present. 

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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