How Does The Visa/Mastercard Settlement Affect Small Businesses?

There was much fanfare at the end of 2013 related to approval of the Visa and MasterCard antitrust settlement, the largest in history estimated at more than $7 billion.  While many of the largest merchants — Walmart, Best Buy, and Amazon.com to name a few — opted out of the class action lawsuit for various reasons, most small to medium-sized businesses remain.  These businesses will be eligible to receive a share of at least one of the two settlement funds, the Cash Fund or the Interchange Fund, once funds are distributed.
 

Many businesses are questioning how they can receive their share of the settlement.

The answer for now is you cannot — yet.  The additional litigation surrounding the settlement appears to have had an impact on the court releasing the claim document, which is the first concrete step a business needs to take to receive its share of a settlement. Unfortunately, there has been quite a bit of subterfuge in the merchant card industry, including processors who would enroll their merchants in programs in which they would handle the administrative tasks, and in turn take a 25% share of any proceeds without the consent of the business. Fortunately, this practice was struck down by the courts; however, there are companies trying to take advantage of the class action settlement by making the process seem extremely complex, when the reality is no one knows yet.
 
The forms and processes for businesses to submit a claim have not been defined by the court.  My recommendation to businesses is to wait until this information is released by the court. It may be a very simple process a business could undertake on its own, although some companies are apparently telling prospective clients that their existing clients are currently getting payouts. This is completely untrue. No business has been paid out of either settlement fund, and those who fall for this tactic will be obligated to a company that doesn’t really know much more than themselves.
 

Is there any action a business should take now to receive payment from the settlement?

Because the Interchange Fund payments will be awarded based on businesses’ VISA and MasterCard sales between July 29, 2013 and March 29, 2014, companies should gather that information now. Those statements are fairly recent and the effort should be minimal. However, for the Cash Fund, no action is needed at this point. Businesses should wait until the claims form is released, which will define the submission requirements.
 
There are many differing opinions about this settlement, and it is clear that some small and medium-sized businesses will benefit financially, some considerably. Like any large class settlement, there are companies who will try to take advantage of business owners, along with reputable ones who provide good value for their service. Business owners who stay informed about this settlement will be prepared to make the best decisions for their businesses, whether it’s engaging help to submit documentation for potential payment from this class action lawsuit, or doing it themselves.

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