Lawsuits Filed Against MasterCard and Visa

Lawsuits have been filed against payment processors Visa and MasterCard for having “unlawful agreements” with banks which result in high ATM fees for consumers. Large retail banks JPMorgan Chase, Wells Fargo, and Bank of America are also included in one of the suits. It is alleged that the aforementioned companies joined forces in a “conspiracy to fix the prices” that consumers must pay, in order to use an out-of-network ATM.

"The ATM restraints prevent ATM operators from offering their customers a discount or benefit for completing a transaction over a network that is less costly to the ATM operator, so consumers cannot be rewarded for using a lower cost and more efficient network," the most recently-filed suit said, according to The Wall Street Journal.

Independent ATMs are the stand-alone ATM terminals that can be found in places like gas stations, hotel lobbies, and delis. These machines account for roughly half of the estimated 400,000 ATMs that are in service across America. Operators of these independent ATMs are the plaintiffs in one of the suits. So far, suits have been filed in New Jersey, California, and Washington, D.C. None of the suits are seeking specific monetary damages.

"Visa and MasterCard are the ringleaders, organizers, and enforcers of a conspiracy among U.S. banks to fix the price of ATM access fees in order to keep the competition at bay," said Jonathan Rubin, a managing member of the Washington, D.C.-based Rubin PLLC, according to marketwatch.com The antitrust law firm will be providing representation for the plaintiffs in one of the lawsuits. "Were it not for these anticompetitive rules, Visa and MasterCard would face real competition for ATM services, consumers would pay lower prices for using ATMs, and more ATMs would be deployed.”

While Visa and MasterCard are the two big payment processors, there are many smaller networks available for debit card transactions such as Star and NYCE as well as the Discover-owned Pulse.

Visa and MasterCard are being accused of having rules in place so that ATM operators are forced to charge all consumers the same out-of-network fees every time, even in the instances where their particular card is able to access a less expensive network, which in turn prevents independent operators from having the ability to offer discounted fees which would benefit consumers.

According to The Washington Post, MasterCard released a statement via email defending their policies, claiming they were “put in place to protect consumers from ATM operators seeking to impose discriminatory surcharges on our cardholders.”

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.