As any business that offers credit card services to its customers knows, there has been a long standing rift between businesses and the two major credit card companies, MasterCard and Visa, over transaction fees. In 2012, there was a class action settlement valued in excess of $7 billion over the alleged excessive fees charged by MasterCard and Visa.
With the new EMV-enabled credit cards, also known as chip cards, disputes have arisen anew. Some major retailers, including Home Depot and Walmart, have sued Visa and MasterCard claiming that the credit card companies are playing games that are detrimental to the retailers’ businesses (and, implicitly, consumers). The basis of the allegations is that the credit card companies are allegedly refusing to make EMV transactions available to these retailers, requiring them to use the traditional signature transactions instead. Those signature transactions now charge higher fees due to the security risks associated with this less secure method.
Businesses that offer credit cards to customers need to be aware of the reported claims involving their merchant accounts and should track this litigation closely.