Wal-Mart, the world's largest retailer, is asking all merchants to reject the proposed $7.2 billion settlement between credit card issuers and millions of merchants over swipe fees.
Retailer Target also spoke out against the deal last week, saying the proposed swipe fee is bad for both consumers and retailers.
Earlier this month MasterCard, Visa and major financial institutions agreed to pay merchants for damages related to an alleged price-fixing charge for the credit card processing fees. That settlement involves a payment to a class of stores of $6 billion from Visa, MasterCard and more than a dozen of the country's largest banks who issue the companies' cards. The card companies also agreed to reduce swipe fees for eight months, that was valued at about $1.2 billion.
The class-action settlement between retailers and the two biggest credit card companies, which is subject to court approval, is intended to resolve stores' claims that Visa and MasterCard conspired with major banks to fix swipe fees. Neither Target nor Wal-Mart were part of the class action suit that involves an estimated 7 million merchants.
Wal-Mart said Tuesday (July 24) it’s against the proposed settlement because it doesn’t stop credit card networks from "continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year."
"The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts.We encourage all merchants to put consumers first and reject the settlement," the Bentonville-based retailer noted.
The proposed settlement also gives merchants the choice of adding a surcharge of their own for customers who pay with credit.
The National Association of Convenience Stores also rejected the settlement. Jeff Lenard, spokesman for the convenience stores' group, said in an CNBC report the proposed deal "offers temporary relief to merchants at best.”
The Arkansas Oil Markets Association that oversees convenience stores and gas stations in the Natural State has not yet reached a position on the settlement.
“We will discuss it thoroughly at our Aug. 16 meeting but my gut tells me it’s not gonna fly,” said Ann Hines,spokeswoman for the trade group, based in Little Rock.
The National Retail Federation recently released this statement on the proposed settlement: "The money is significant but money is only temporary – it’s here today and spent tomorrow. What we need are changes in the rules that bring about transparency and competition that would be here for years to come. The test will be whether the injunctive relief is meaningful. Unless it is, the card market will stay broken and neither merchants nor their customers will achieve a long-term benefit. In that case, it would be a missed opportunity," said NRF General Counsel Mallory Duncan.