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Walmart and Target have come out against the $6 billion settlement of a price fixing lawsuit against Visa and MasterCard that dates back to 2005, having been brought against them by a wide range of retailers.

In doing so, the two big box retailers join the National Association of Convenience Stores (NACS) in opposing the settlement.

According to the Associated Press coverage, "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, which have grown in popularity for small-value transactions ... The pact, which is being called by lawyers involved in the case the largest antitrust settlement in US 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 that they pay to banks for purchases made using plastic."

In opposing the deal, Walmart said that it does not prevent credit card issuers from "continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year.

"The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts. We encourage all merchants to put consumers first and reject the settlement."

Target also called the proposed settlement - which has to be approved by a judge - "bad for both retailers and consumers."

NACS has said that "this proposed settlement allows the card companies to continue to dictate the prices banks charge and the rules that constrain the market including for emerging payment methods, particularly mobile payments. Consumers and merchants ultimately will pay more as a result of this agreement — without any relief in sight.”

MasterCard spokesman James Issokson tells CNN that "the company recognizes that some merchants may have different opinions, [but that] 'the settlement represents a solution reached after years of litigation and months of negotiation'."
KC's View:
I'm not nearly smart enough to be able to make a definitive judgement on this issue, but my gut tells me that Walmart, Target and NACS are right on. First of all, the two big box stores and the convenience store association have little in common in terms of their business models, so they must be onto something. Plus, I'm suspicious of the banks for wanting to settle; I just don't trust them, and I suspect that the way the proposed deal is being described by the dissidents is pretty close to being the truth.

The problem, of course, is that what is happening now may be just what the banks would like to have happen - a splintering of the retail coalition that was remarkably cohesive up until now. Plus, there is enough talk from some retailers about charging consumers more for credit card transactions that it may create the impression - which the banks would love - that retailers are trying to gouge shoppers.

Retailers have to be careful on this. They've been on the side of shoppers all along, and they cannot and should not lose control of the narrative.