According to a Bloomberg report, Visa is being sued by Wal-Mart Stores Inc for fixing transaction fees with banks. The biggest retailer in the world is seeking a minimum of $5 billion in damages for violating federal antitrust laws that Walmart said could triple the amount. The lawsuit has been filed in Fayetteville, Arkansas on March 25 after dropping out of a class-action antitrust settlement with both Visa and MasterCard Inc which Bloomberg said is worth billions of dollars.
According to the complaint Wal-Mart filed, the conduct of the card company had caused the retailer enormous damage beginning 2004 until late November in 2012. Although there were no banks named as defendants in the suit, the allegations Wal-Mart made were pointed to Visa. One of them, was that retailers like Wal-Mart are required to honor all branded cards Visa has issued to customers if the retailers wanted the banks to process Visa payments.
Wal-Mart added, "There is no competition because merchants are prevented from realizing the price-reducing benefits that would result if issuers competed (over the fees they charged retailers who agreed to accept their cards for payment."
In June last year, Bloomberg said Visa tried to stop the Bentonville, Arkansas-based retailer from bringing its on case by filing a lawsuit against Wal-Mart in Brooklyn. Visa said the lawsuit it took out against the retailer was to stop the continuation of wasteful and endless litigation between the two companies.
When the two parties tried to settle the Brooklyn case, they reportedly have tried to come to an agreement wherein interchange fees should be less than 2% of credit-card purchased sales banks have imposed on the retailers. Majority of the retailers and trade associations believed that the accord was not sufficient in terms of damages paid and had blocked all future lawsuits from merchants who are contesting the high fees.
