The Interchange Settlement: Three Things Merchants Must Know

Two months ago merchants were mailed a notice about the $7.25 billion proposed settlement of the class-action lawsuit brought by retailers against Visa Inc. and MasterCard. This notice outlined what merchants must do to opt in (or out) of the proposed settlement.

It is very important that merchants do not disregard this notice, because in doing so, they could miss out on thousands of dollars in settlement funds. If you did not read the notice thoroughly, please do so as soon as possible, and note three items below that you should know about the settlement.

1. Understand both parts of the settlement; The Cash Settlement Fund and the Interchange Fund. $6.05 billion Cash Settlement Fund is estimated to hold $6.05 billion – this money will be distributed once and if the settlement is approved in a hearing scheduled for September 12, 2013 in NY. The Interchange Fund is estimated to hold approximately $1.2 billion – the money will be distributed starting no later than July 29, 2013. The amount that each merchant will receive from that fund is calculated based on transaction volume during that eight-month period.

2. Know how to opt out of the settlement the correct way. The opt-out deadline is May 28, 2013. If merchants don’t want to take part in the proposed settlement they must officially opt out by filing the proper paperwork.

3. Assess the options and opportunities you have as a merchant from this settlement. If anything is unclear to you, do not hesitate to contact your merchant service provider for help or advice.