Credit card fees deal: $6 billion

NEW YORK – Visa, MasterCard and major banks agreed to pay retailers at least $6 billion to settle a long-running lawsuit that alleged the card issuers conspired to fix the fees that stores pay to accept credit cards. As part of the settlement, announced late Friday, stores from Rite Aid to Kroger will be allowed to charge customers more if they pay using a credit card.

The pact, which is being called by lawyers involved in the case the largest antitrust settlement in U.S. history, is seen as a major victory for merchants that have long complained about the billions of dollars in so-called “swipe” or “interchange” fees they pay to banks for each purchase made using plastic. But at a time when shoppers increasingly are using credit and debit cards, merchants face the dilemma of how to charge shoppers extra without angering them.

“These new rules will give merchants the tools they need to put pressure on the credit card networks to lower interchange or swipe fees, which are the second- or third-highest cost of doing business for many retailers,” said Patrick J. Coughlin, one of the lawyers for the plaintiffs.

According to the National Retail Federation, the nation’s largest retail group, credit card swipe fees cost retailers about $20 billion per year.

As part of the settlement, credit card companies have agreed to reduce swipe fees for eight months. The temporary reprieve on fees is valued at $1.2 billion. The settlement does not apply to debit cards.