The decades-long battle between merchants and card networks over interchange fees charged to accept payment cards has been renewed—with a twist.
Intuit, provider of QuickBooks accounting software and other financial products for consumers filed a lawsuit against Visa and Mastercard in federal court on Feb. 19 accusing the card networks of “price fixing” regarding their interchange pricing models and of subverting the Durbin Amendment of the 2010 Dodd-Frank Financial Reform Act.
While Intuit is a merchant, and the company contends its damages over a 17-year period total in the billions of dollars, the company is also suing the card brands as an independent sales organization and a payment facilitator—highlighting the convoluted relationships among companies in the payments space.
Interchange rates typically are set by the card networks, charged by issuing banks, paid by payment processors and providers and passed through to merchants, which bear the brunt of the cost. The burden on CNP merchants is even greater because the interchange rates set by the networks for e-commerce transactions are higher than for in-store transactions.
Companies have been litigating interchange fees for decades and this case will likely not be adjudicated for years, but bears watching for its differences.