Wal-Mart Stores, Inc. (NYSE:WMT) Is Taking Visa To Court Over Card Swipe Fees
Denver, CO, 04/07/2014, (Avauncer.com) – Wal-Mart Stores, Inc. (NYSE:WMT) filed a lawsuit against credit/debit card giants Visa, on grounds that the financial company was charging excessive card swipe fees. Wal-Mart has based the case on the $5.7 billion settlement agreed upon by both the companies on the same matter, and is now asking for $5 billion.
Behind the scene
A 2% on the total amount is charged by the card company as interchange fee every time a shopper chooses to pay with a debit/credit card. Merchants had earlier filed a class-action against card networks, accusing them of charging excessive fees. In this case, a settlement of $5.7 billion, between Wal-Mart Stores, Inc. (NYSE:WMT) and Visa was approved by a federal judge.
The merchants had been protesting that the settlement wasn’t enough for restitution for them and that it prevented them from filing cases in the future, with regard to claiming of fees. However, the settlement was approved but any merchant unhappy with still, was free to reject the settlement and file an individual claim.
This is exactly what Wal-Mart and other merchants have been doing. They have rejected the settlement and want Visa to pay individually.
Wal-Mart has filed a lawsuit against Visa, Inc. in Fayetteville, in the U.S. District Court for the Western District of Arkansas. This federal court has jurisdiction over several cases filed by the company, from their home Bentonville, Arkansas.
Wal-Mart has accused Visa of violating trust, and stated that Visa’s monopoly power allows them to dictate price terms and inhibit competition. They have also stated that there is no competition as merchants are not allowed to realize the price reducing benefits, if issuers competed.
Wal-Mart Stores, Inc. (NYSE:WMT) probably has the earlier class-action working in their favor. However, courts are generally to not award free rein to plaintiffs who refuse class action settlements and then return with another lawsuit. Furthermore, there are many others waiting in this case to take on Visa and the courts are probably not going to allow such a free fall.
The lawsuit will probably drag on. Till then, it is likely, that both these parties would look at agreeing to another settlement.DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. - Contact us at support @ avauncer dot com if you have any questions or comments.