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Visa & Mastercard Fee: The ongoing dispute between retailers in America with Visa and Mastercard is now on the verge of resolution. Both the companies have offered to reduce duty, which will result in savings of about $200 billion.
New Delhi. Visa and MasterCard Inc., two leading companies providing credit and debit card facilities across the world, have decided to resolve a 20-year-old controversial issue. This will benefit lakhs of retailers who are fighting a legal battle regarding the charges levied on these cards. If this issue is resolved, the merchant will save about $ 200 billion (about Rs 17 lakh crore) in the form of settlement.
Joseph Stiglitz and Keith Leffler, who are serving as economist experts on behalf of retailers, say that this matter regarding settlement of card fees has been going on for many years. If it is resolved, it will be the largest settlement case in America’s antitrust history. Under the card agreement, whenever a customer uses the card, the retailers have to pay a fee under the interchange rate.
What are the terms of the agreement?
According to the information given to the stock exchange by both the companies, the agreement will reduce the average effective interchange rate for the card network. When customers in America make payments to retailers through cards, they will have to pay a fee of 0.10 percent for 5 years under American credit card rules. However, the standard fee in America is 1.25 percent. MasterCard said in an email that this is the best solution for all parties. In this solution, along with clarity, flexibility and consumer safety has also been kept in mind. Small businessmen will benefit greatly from this.
How much has this fee reached?
People associated with the matter say that till last year the figure of this duty had reached 187 billion dollars, which by this year would have reached more than 200 billion dollars. Retailers have been complaining about fees for a long time. On the other hand, Visa and MasterCard want to make big money by setting the size of interchange rates. A large part of the revenue generated from this is given to the banks that issue the cards. However, the group of retailers has alleged that both the companies have talked about reducing only the fees that they pay to the banks and not the fees that the companies themselves keep.
Earlier an offer of 30 billion dollars was given
Last year also, talks on an agreement had started between the two parties. Under this, an offer was made to save about 30 billion dollars in 5 years. High interchange fees are charged on both these cards and businessmen have been facing problems with this fee for a long time. Under the new agreement, merchants will also be given the freedom to refuse to accept the cards of anyone among commercial, premium consumers and standard consumers. There was a dispute going on on this issue for 20 years, on which now a consensus seems to be emerging.
