Walmart Stores Inc sued Visa Inc for over $5 billion claiming it was charged by the card network unreasonably high fees when its customers paid by credit or debit card.
Visa as well as other card networks charge retailers fees each time a customer chooses to pay via a debit or credit card. Walmart in the suit alleges that how the swipe fees were setup violated antitrust regulations. Walmart also said that over a period of nine years, the company had generated over $350 billion for card issuers in part at the expense of the customers and the retailer.
Visa would not comment on the suit. The company repeatedly has denied that fees it charges are not competitive.
Walmart helped win a class-action settlement of $3 billion with MasterCard Inc and Visa in 2003. That suit was over the requirement by the networks’ that their merchants, whom accepted the credit cards, must also allow debit cards.
Interchange fees, the term used in the industry for fees for card swiping have become another contention point between the two companies.
The fees are set by Visa as well as the other networks and collected by JP Morgan Chase the card-issuing bank. Retailers are saying the fees have been too high because of a lack of competition between the two largest payment industry behemoths.
Smaller size retailers settled over the same type of issue during July of 2012, but dozens of larger merchants, which included Walmart, Macy’s and Target opted to not enter the suit, as they wanted to pursue their own suits.
Companies opting to not accept the deal said it would not prohibit card networks from increasing the fees for card processing down the road and required merchants to waive any rights of suing the payment networks on all present or future methods of payment, ranging from mobile phones to credit cards.
The first settlement was approved in December by a federal judge but some retailers have made an appeal.
