Retailer opposition to the $7.25 billion class action settlement reached with Visa and MasterCard earlier this month over credit card interchange fees has grown after Walmart joined its rival Target in rejecting the settlement.
The settlement was supposed to finally put an end to a legal dispute over interchange fees that has been dragging on for seven years in the US, with retailers set to share the $7.25bn and Visa and MasterCard agreeing to reform their rules and business practices.
The promised reform obviously isn’t enough for Walmart, however, which said it was “disappointed” with the deal in a prepared statement, saying that it “would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year".
As the largest retailer in the US, the addition of Walmart to the other retailers already voicing concern about the deal is likely to add weight and strengthen opposition. Rival retailer Target had already said the settlement would merely “perpetuate a broken system” and others fear it could restrict innovation in the payments field, particularly surrounding mobile payments and loyalty schemes. Merchants would have to waive their rights to any future comeback or recompense if the settlement is agreed.