Businesses across the United States now have an extended opportunity to file claims for compensation against Visa and Mastercard over undue fees. This deadline extension applies to a settlement in a long-running legal battle between companies and the two credit card giants, providing relief for businesses affected by unfair payment processing charges.
The extension offers businesses more time to submit their claims, ensuring they don’t miss out on a substantial financial settlement. Here’s everything you need to know about this important development, including who is eligible, the history of the case, and how to file a claim.
Background of the Case: The Class-Action Lawsuit
The settlement in question stems from a class-action lawsuit initially filed in 2005, where businesses accused Visa and Mastercard of inflating the interchange fees (also known as swipe fees) that merchants are charged every time a customer pays with a credit or debit card. These fees, which are typically around 1-3% of the transaction amount, can be burdensome, particularly for small and medium-sized businesses that operate on thin margins.
Merchants argued that Visa and Mastercard had worked with banks to artificially inflate these fees and prevent competition, ultimately raising costs for both businesses and consumers. After years of litigation, a settlement was reached in 2019, where Visa and Mastercard agreed to pay an estimated $5.54 billion to $6.24 billion to affected businesses, making it one of the largest antitrust settlements in U.S. history.
Who Is Eligible to File a Claim?
Businesses that accepted Visa or Mastercard payments between January 1, 2004, and January 25, 2019, are eligible to file a claim. This includes a wide range of industries, from retail stores and restaurants to service providers and e-commerce platforms. Essentially, if your business processed credit or debit card payments during that period, you could be entitled to compensation.
Key points to check eligibility:
- The business must have accepted Visa or Mastercard credit or debit card payments during the eligible period.
- Businesses of all sizes can qualify, from small shops to large corporations.
Even if your business has undergone changes such as ownership transfers or name changes, you may still be eligible to receive compensation.
Why Has the Deadline Been Extended?
The original deadline for filing claims was set earlier, but in light of the massive scope of the settlement and the large number of businesses involved, the claims process has been extended. This extension allows businesses more time to gather the necessary documents and submit their claims, ensuring they don’t miss out on the settlement funds.
Additionally, many business owners were either unaware of the settlement or unsure if they qualified, prompting advocacy from trade groups and business organizations to raise awareness and extend the deadline. With the extension, affected businesses now have more time to review their credit card processing history and file claims.
How Much Can Businesses Expect to Receive?
The amount each business will receive depends on several factors, including:
- The total volume of Visa and Mastercard transactions processed by the business between 2004 and 2019.
- The number of claims filed by other businesses.
Since the settlement pool is estimated at $5.54 billion to $6.24 billion, businesses that processed a higher volume of credit and debit card transactions are likely to receive a larger share of the payout. However, even businesses with smaller transaction volumes can still expect a reasonable return based on the volume of their processed payments.
It’s worth noting that the settlement amount will be distributed after legal fees and other administrative costs are deducted, so the exact payout per business may vary.
How to File a Claim
Filing a claim is a straightforward process, but businesses will need to provide documentation proving that they accepted Visa and Mastercard payments during the eligible period. Here’s a step-by-step guide to submitting your claim:
- Visit the settlement website: Go to the official settlement claims website, where you can find detailed instructions and the necessary claim forms.
- Gather transaction records: Collect records of Visa and Mastercard transactions your business processed between January 1, 2004, and January 25, 2019. This may include monthly statements from your credit card processor or transaction summaries.
- Complete the claim form: Fill out the claim form with your business information, including contact details, transaction volumes, and any supporting documentation.
- Submit your claim: You can file your claim online or by mail, depending on your preference. Be sure to follow the submission instructions carefully to avoid delays or issues with your claim.
- Monitor the status: Once submitted, you can track the status of your claim through the settlement website. It may take some time for claims to be processed due to the large number of submissions expected.
If you’re unsure about how to gather the necessary documentation or need help navigating the process, consulting with a legal or financial advisor might be helpful.
Why This Settlement Matters for Businesses
The extended claims deadline offers businesses a significant opportunity to recoup some of the costs they’ve incurred over the years due to inflated swipe fees. For many companies, especially small businesses, the fees they’ve paid to process card transactions add up to a considerable sum. Being able to recover a portion of those costs can provide a financial boost, particularly during challenging economic times.
For large retailers and corporations, the amounts recovered could be substantial, given their high volume of card transactions over the years.
Moreover, this case has broader implications for the payment industry. The settlement has led to greater scrutiny of interchange fees and fostered discussions about potential reforms to make the system more transparent and competitive. Some experts believe that this legal outcome could lead to lower processing fees in the future, benefiting merchants and consumers alike.
Final Thoughts
With the deadline extended, businesses now have more time to file claims and benefit from the massive Visa and Mastercard settlement. Whether you’re a small business owner or part of a larger company, if you’ve processed credit or debit card transactions in the past 15 years, it’s worth exploring whether your business qualifies for compensation.
By taking advantage of this opportunity, businesses can recoup some of the costs incurred from unfair fees and contribute to shaping a more equitable payment processing system. Don’t wait—file your claim today and take advantage of this historic settlement.
