September 26, 2005

Retail groups sue Visa, MasterCard

NEW YORK (Reuters) - Several retail groups have filed an
antitrust lawsuit against Visa USA, MasterCard International
and dozens of major U.S. banks, saying they acted together to
set excessive credit card fees.

The lawsuit, filed Friday with the U.S. District Court for
the Eastern District of New York, concerns interchange fees,
which retail merchants pay to issuing banks to receive payments
for transactions involving the banks' cards.

It is similar to a lawsuit filed in July by Kroger Co.,
Walgreen Co. and other retailers accusing Visa of setting fees
too high.

The plaintiffs include the National Association of
Convenience Stores, the National Association of Chain Drug
Stores, the National Community Pharmacists Association and the
National Cooperative Grocers Association. These groups
collectively represent hundreds of thousands of U.S. stores
that accept Visa and MasterCard as a form of payment.

Among the defendant banks are Bank of America Corp.,
Citigroup Inc. and JPMorgan Chase & Co., the largest U.S.
credit card issuers.

Bank of America was not immediately available for comment.
Visa, MasterCard, Citigroup and JPMorgan did not immediately
return calls.

Interchange fees make up the largest component of credit
card fees and have long been a source of friction between
retailers and card companies.

In 2003, Visa agreed to pay about $2 billion and MasterCard
$1 billion to settle a lawsuit by retailers claiming they were
forced to accept higher-cost, signature-verified debit cards.

(Additional reporting by Chris Sanders)