Visa Mastercard Settlement: How Much Will I Get?

[Stanleyfinn]

As a small business owner who's been accepting credit cards for years, I've been closely following the Visa Mastercard settlement. Like many merchants, I've been wondering about the potential payout.​

It's a question that's been on the minds of millions of business owners across the United States, from mom-and-pop shops to large retail chains.
The answer isn't straightforward, but I've done the research to break it down for you. Let's examine the details of this massive $5.54 billion settlement and figure out what it might mean for your wallet.

Background of the Settlement​

In 2005, a group of merchants filed a class action lawsuit against Visa and Mastercard. They alleged that these payment giants were violating antitrust laws by forcing merchants to pay excessive fees for accepting their credit and debit cards.

After years of legal battles, a preliminary settlement was reached in 2019.

Understanding Your Potential Payout​

The settlement uses a claims-made process, which means you must file a valid claim to receive your share. The amount you'll receive isn't a one-size-fits-all deal.

It depends on several factors:

1. Transaction Volume​

The total dollar value of Visa and Mastercard transactions you processed between January 1, 2004, and January 25, 2019, plays a significant role in determining your payout. Generally, the higher your transaction volume, the larger your potential compensation.

2. Merchant Category​

Different industries have different interchange rates, which affects your claim. For example, a restaurant might have a different rate than a retail store or an online business.

Your specific merchant category code (MCC) will be taken into account when calculating your share of the settlement.

3. Total Value of Approved Claims​

Remember, you're sharing this settlement with millions of other merchants. The total number of approved claims and their added value will impact person payouts.

If the total claims exceed the settlement fund, payouts will be reduced proportionally.


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The Calculation Process​

The settlement administrator uses a formula that considers the interchange fees you paid during the class period. They estimate this based on your total Visa and Mastercard transaction volume and the applicable interchange rates for your merchant category.

Keep in mind that the actual payout could be less than the estimated amount. Administrative costs and attorneys' fees will be deducted from the settlement fund before distribution.
Additionally, if the total value of approved claims exceeds the available settlement fund, payouts will be reduced proportionally.

Estimating Your Share​

While I can't give you an exact figure, I can provide some ballpark estimates. For small businesses, payouts might range from a few hundred to several thousand dollars, depending on transaction volume.

Larger retailers with higher transaction volumes could potentially receive millions.
The official settlement website offers calculators to help you estimate your potential recovery. However, remember that these are just estimates, not guarantees.

Beyond the Money: Rule Changes​

The settlement includes rule changes that could benefit merchants in the long run:

Surcharging Ability​

Merchants now have the ability to surcharge credit card transactions, with some limitations. This means you can pass on some of the processing costs to customers who choose to pay with credit cards.

Merchant Negotiating Groups​

The settlement allows for the formation of merchant negotiating groups. This could give businesses more bargaining power when dealing with payment networks in the future.

Transparency in Pricing​

Visa and Mastercard will be required to provide more transparent pricing information, making it easier for merchants to understand and compare costs.

The Claims Process: Don't Miss Out​

To get your share of the settlement, you need to file a claim, and there's a deadline. The claims process can be complex, so don't wait until the last minute.

Steps to File a Claim​

1. Gather your transaction data for the class period (January 1, 2004, to January 25, 2019).
2. Visit the official settlement website and access the claim form.
3. Fill out the form with your business information and transaction data.
4. Submit any supporting documentation required.
5. File your claim before the deadline.

For larger merchants with significant transaction volume, consider getting professional assistance in preparing your claim. The complexity of the process and the potential size of the payout may justify the cost of expert help.

Potential Challenges and How to Overcome Them​

One of the biggest challenges you might face is gathering all the necessary documentation to support your claim. If you're like me, you might not have detailed records going back to 2004.

Here are some strategies to overcome this:

Contact Your Payment Processor​

Reach out to your current and past payment processors. They may be able to provide historical transaction data.

Some processors have set up special services to help merchants with this settlement claim process.

Use Tax Returns​

If you don't have exact figures, your tax returns can help estimate your card transaction volume. Look for line items related to credit card sales or total revenue, and use these to make educated estimates.

Be Conservative in Your Estimates​

When in doubt, it's better to underestimate than overestimate. Overestimating could risk having your claim rejected or reduced. A conservative estimate is more likely to be approved and paid out.

Utilize Available Resources​

The settlement website offers tools and guidance for estimating your transaction volume. Take advantage of these resources to confirm your claim is as accurate as possible.

Adapting to the New Landscape​

While this settlement is significant, it's not going to alter the payment industry overnight. Visa and Mastercard will still set interchange fees, albeit with some new restrictions.

Here's how you can adapt:

Consider Surcharging​

Now that it's allowed, you might want to pass on some of the credit card fees to customers who choose to pay with cards. However, be cautious with this approach.

Consider your customer base and competitive landscape before implementing surcharges.

Negotiate with Your Processor​

Use this settlement as leverage to potentially negotiate better rates with your payment processor. The increased transparency and competition resulting from the settlement may give you more bargaining power.

Educate Your Customers​

If you do decide to surcharge, be transparent about why you're doing it. Educate your customers about the costs associated with credit card processing and how it affects your business.

Explore Alternative Payment Methods​

Look into other payment options that might offer lower fees, such as ACH transfers or newer fintech solutions. Diversifying your payment acceptance methods could help reduce overall processing costs.


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Building on the Basics​

Understanding this settlement is just the beginning. It's a stepping stone to becoming more savvy about payment processing in general.

Here are some ways to build on this knowledge:

Stay Informed About Interchange Rates​

Regularly review the interchange rates published by Visa and Mastercard. Understanding these rates and how they apply to your business can help you make informed decisions about payment acceptance.

Join a Merchant Association​

Consider joining a merchant association or trade group related to your industry. These organizations often provide valuable resources and advocacy on payment processing issues.

Regularly Review Your Merchant Services Agreement​

Don't set it and forget it. Annually review your agreement with your payment processor.

Look for any changes in fees or terms that might affect your bottom line.

Keep an Eye on Industry Trends​

The payment industry is constantly evolving. Stay informed about new technologies, regulations, and market trends that could impact your business.

Long-Term Impact on Your Business​

While the immediate focus might be on the potential payout, the long-term impact of this settlement could be even more significant for your business:

Reduced Processing Costs​

The rule changes and increased competition resulting from the settlement could lead to lower processing fees over time. This could have a substantial impact on your bottom line, especially if you process a high volume of card transactions.

More Negotiating Power​

The ability to form merchant negotiating groups gives businesses, especially smaller ones, more leverage when dealing with payment networks and processors. This could lead to better terms and rates in the future.

Increased Flexibility in Payment Acceptance​

The new rules around surcharging and the ability to steer customers to preferred payment methods give you more control over your payment strategy. You can now make decisions that best suit your business model and customer base.

Greater Transparency​

The settlement needs Visa and Mastercard to provide more transparent pricing information. This increased transparency should make it easier for you to understand your processing costs and make informed decisions.

Preparing for Future Changes​

The payment industry is dynamic, and this settlement is likely to spur further changes. Here's how you can prepare:

Stay Educated​

Continuously educate yourself about payment processing. Understand the different fee structures, emerging technologies, and regulatory changes that could affect your business.

Be Proactive​

Don't wait for changes to happen to you. Regularly review your payment acceptance strategy and be proactive in seeking better terms or exploring new options.

Leverage Technology​

Invest in point-of-sale systems and payment technologies that give you flexibility and detailed reporting. This will help you make data-driven decisions about your payment strategy.

Build Relationships​

Cultivate relationships with your payment processor, industry associations, and even other merchants in your field. These connections can be valuable sources of information and support as the industry evolves.

People Also Asked​

How much money will I get from the Visa Mastercard settlement?​

The amount varies based on your transaction volume and merchant category. Small businesses might receive hundreds to thousands of dollars, while large retailers could get millions.

When is the deadline to file a claim for the Visa Mastercard settlement?​

The deadline for filing claims is typically set by the court. Check the official settlement website for the most up-to-date information on deadlines.

Can I still accept Visa and Mastercard after participating in the settlement?​

Yes, participating in the settlement does not affect your ability to continue accepting Visa and Mastercard payments.

How do I prove my transaction volume for the Visa Mastercard settlement?​

You can use records from your payment processor, tax returns, or financial statements to support your claim. If you don't have exact figures, conservative estimates are acceptable.

What changes will the Visa Mastercard settlement bring to credit card processing?​

The settlement allows merchants to surcharge credit card transactions, form negotiating groups, and provides more transparency in pricing from Visa and Mastercard.

Are online businesses eligible for the Visa Mastercard settlement?​

Yes, both online and brick-and-mortar businesses that accepted Visa or Mastercard payments during the class period are eligible to file a claim.

How long will it take to receive payment from the Visa Mastercard settlement?​

The timeline for payments can vary depending on the claims process and any potential appeals. It could take several months to over a year after the claims deadline.

Will accepting the settlement payment affect my future relationship with Visa and Mastercard?​

No, accepting a settlement payment does not affect your future ability to work with Visa and Mastercard or your standing with these companies.

What if my business has closed since the class period?​

Former business owners may still be eligible to file a claim if they accepted Visa or Mastercard payments during the class period, even if the business is no longer operating.

Can I opt out of the Visa Mastercard settlement?​

Yes, merchants had the option to opt out of the settlement by a specified deadline. However, this deadline has likely passed. Check the official settlement website for specific details.

Key Takeaways​

1. Your potential payout from the Visa Mastercard settlement depends on your transaction volume, merchant category, and the total claims filed.
2. File your claim before the deadline and consider professional help if needed, especially for complex or high-value claims.
3. Look beyond the monetary payout to the long-term benefits of the rule changes, including the ability to surcharge and form negotiating groups.
4. Use this settlement as an opportunity to reassess and improve your overall payment processing strategy.
5. Stay informed about ongoing changes in the payment industry to make the most of this settlement and future opportunities.

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