Visa and Mastercard, the two giants in the card payment space, have agreed to pay a total of $197 million to settle a class action lawsuit brought by millions of consumers for allegedly keeping cash access fees artificially inflated, Reuters reported.
Overcharging by Payment Giants
The settlement involved Visa and Mastercard consumers who withdrew cash from bank-operated ATMs since 2007. According to the plaintiffs’ attorneys, the settlement will “deliver immediate and assured relief.”
The proposed accord in the class action lawsuit was revealed on Wednesday, when the plaintiffs' legal representatives filed a petition in federal court. However, the proposed settlement still needs the court’s final approval.
Under the settlement agreement, Visa agreed to pay $104.6 million, while Mastercard will pay $92.8 million. Notably, both payment processors denied all wrongdoing.
More Settlements to Come?
Visa and Mastercard are two top card providers in the United States. While Visa had a market share of 61 percent in 2023, according to Statista, Mastercard followed with 25.4 percent. The next competitor, American Express, only had an 11.3 percent market share.
While the settlement has been reached for the class action lawsuit related to the bank-operated ATMs, two other similar class actions, one from consumers using non-bank ATMs and another from businesses that own independent ATMs, are still pending in the same federal court in Washington D.C.
All three class action lawsuits accuse Visa and Mastercard of charging artificially higher access fees. The three class action lawsuits combined are seeking damages of more than $9 billion from the two payment giants. The proposed settlement class action is estimated to have at least 175 million members, the report outlined.
Earlier, both Visa and Mastercard approached the US Supreme Court to challenge the ruling of a lower court that allowed the class action lawsuits. However, the apex court turned down the appeal of the payment giants.
Meanwhile, Visa and Mastercard entered into an estimated $30 billion settlement earlier this year for limiting credit and debit card fees for merchants, who accused the two companies of charging inflated swipe fees or interchange fees. It was one of the largest anti-trust settlements in the US.
