|Every time a Walmart customer swipes a Visa debit or credit card, the store has to pay a processing fee to Visa. Sometimes called interchange fees or swipe fees, these can reach as high as 15 cents, plus 1.65 percent of the total transaction.
Walmart is now suing Visa over these interchange fees, saying that the payment company “conspired with banks to illegally fix and inflate fees that retailers pay on card transactions” from 2004 to 2012, according to the The Associated Press.
Visa, MasterCard and Major Banks Have Already Faced Suits Over Swipe Fees
Visa, with MasterCard and major U.S. banks, has already faced off against 19 major retailers over similar claims. The credit card companies agreed in a July 2012 settlement to pay up to $7.25 billion to the plaintiffs. But some of the retailers backed out of the suit, including Walmart, which shrunk the actual payout to $5.7 billion, reports Reuters.
The previous suit would have barred Walmart from any future claims against the credit card company over swipe fees, such as the suit the retailer just filed against Visa.
Now Walmart is seeking at least $5 billion in damages, according to CNN Money – a much greater amount than the retailer would have received as part of the $7.25 billion joint lawsuit.
Walmart Claims Visa Forced Its Prices Up
Under the current model of payment in the United States, retailers cover the cost of swipe fees for customers using charge cards to pay. But while swiping a card is free for customers, Walmart argues that Visa’s interchange fees still end up costing customers and hurting businesses.
“The anticompetitive conduct of Visa and the banks forced Wal-Mart to raise retail prices paid by its customers and/or reduce retail services provided to its customers as a means of offsetting some of the artificially inflated interchange fees,” claimed Walmart in court documents, according to Reuters. ”As a result, Wal-Mart’s retail sales were below what they would have been otherwise.”