Visa and Mastercard have reached a settlement to cap credit card fees for retailers, resulting in an estimated $30 billion of savings over five years.
The antitrust settlement announced on Tuesday is one of the largest in U.S. history, and upon court approval would resolve claims in litigation that began in 2005.
Retailers had accused Visa and Mastercard of overcharging them on interchange fees, or swipe fees, when shoppers used credit or debit cards, and barring them through “anti-steering” rules from directing customers toward cheaper means of payment.
The settlement would lower interchange rates by four basis points (0.04 percentage points) in the United States for three years, and cap rates for five years.
It would also remove anti-steering restrictions and enable competitive pricing, lawyers for retailers said.
Ghana
Meanwhile, in Ghana, Visa recently signed a partnership agreement with the payment switch, Ghana Interbank Payments and Settlements Systems (GhIPSS) for all Visa Card transactions to be processed locally. This will enable banks, merchants and customers to make some amount of savings, and also deepen financial inclusion.
At the signing, the representative of Visa West Africa assured Ghanaians of the company’s commitment to strategies and models aimed at cutting cost for stakeholders. For one, domestic processing of Visa transactions means banks are spared the dollar payments to processing entities abroad.
Indeed, GhIPSS is gearing up to sign a similar partnership deal with Mastercard soon, all in the interest of cost saving and deepening financial inclusion.
