Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , along with banks including JPMorgan Chase & Co. (JPM - Free Report) , Citigroup Inc. (C - Free Report) and Bank of America Corp. would pay merchants about $6.5 billion on account of Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.
The said litigation is a U.S. class-action lawsuit filed in 2005 by merchants and trade associations against Visa, MasterCard, and numerous financial institutions that issue payment cards. The suit was filed due to price fixing and other allegedly anti-competitive trade practices in the credit card industry.
The settlement is an amendment to the financial terms of the 2012 Class Settlement Agreement and will be filed with the court seeking approval.
A similar settlement was reached in 2016, which included charges of $5.7 billion. But the same was rejected by a federal appeals court.
The lawsuit was filed by more than 12 million merchants, who alleged that Visa, MasterCard, and major credit card issuers were engaged in a conspiracy to fix interchange fees, also known as swipe fees. These fees were charged to merchants for the privilege of accepting payment cards, at artificially high levels. The merchants also claimed that the card companies unfairly interfered with them from encouraging customers to use less-expensive forms of payment such as lower-cost cards, cash and checks.
However, the payment of this settlement money will not be enough for the merchants. There’s a separate class of merchants fighting for changes to Visa and Mastercard, as well as other card companies’ business practices.
Visa and Mastercard have prepared themselves well by building reserves to pay for this charge. Therefore, these companies should not feel much of a strain on their capital.
Visa and Mastercard have gained 40% and 54%, respectively, in a year’s time compared with the industry’s growth of 36%.
Currently, Visa and Mastercard both carry a Zacks Rank #3 (Hold).
You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Zacks Names "Single Best Pick to Double"
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Visa Inc. (V - Free Report) , Mastercard Incorporated (MA - Free Report) , along with banks including JPMorgan Chase & Co. (JPM - Free Report) , Citigroup Inc. (C - Free Report) and Bank of America Corp. would pay merchants about $6.5 billion on account of Payment Card Interchange Fee and Merchant Discount Antitrust Litigation.
The said litigation is a U.S. class-action lawsuit filed in 2005 by merchants and trade associations against Visa, MasterCard, and numerous financial institutions that issue payment cards. The suit was filed due to price fixing and other allegedly anti-competitive trade practices in the credit card industry.
The settlement is an amendment to the financial terms of the 2012 Class Settlement Agreement and will be filed with the court seeking approval.
A similar settlement was reached in 2016, which included charges of $5.7 billion. But the same was rejected by a federal appeals court.
The lawsuit was filed by more than 12 million merchants, who alleged that Visa, MasterCard, and major credit card issuers were engaged in a conspiracy to fix interchange fees, also known as swipe fees. These fees were charged to merchants for the privilege of accepting payment cards, at artificially high levels. The merchants also claimed that the card companies unfairly interfered with them from encouraging customers to use less-expensive forms of payment such as lower-cost cards, cash and checks.
However, the payment of this settlement money will not be enough for the merchants. There’s a separate class of merchants fighting for changes to Visa and Mastercard, as well as other card companies’ business practices.
Visa and Mastercard have prepared themselves well by building reserves to pay for this charge. Therefore, these companies should not feel much of a strain on their capital.
Visa and Mastercard have gained 40% and 54%, respectively, in a year’s time compared with the industry’s growth of 36%.
Currently, Visa and Mastercard both carry a Zacks Rank #3 (Hold).
You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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