Visa Inc (V), Mastercard Inc (MA): Credit Card Giants, Big-Box Retailers Prepare for Battle

A long-standing dispute between credit card issuers Visa Inc (NYSE:V) and MasterCard Inc (NYSE:MA) and the businesses that accept consumer payments via those instruments is heating up again, as a flurry of lawsuits filed on both sides over a prior settlement regarding interchange fees jump-start the hostilities all over again.

What once seemed settled, really is not
The settlement reached last summer over swipe fees at first looked like a win for all, putting to bed scores of existing lawsuits on the issue, once and for all. But, soon after the announced pact, retail behemoths Wal-Mart Stores, Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) began to voice their opposition to the terms.

Now, both retailers have joined with other businesses that have opted out of the settlement in filing their own lawsuit against Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). A little over one week ago, Wal-Mart Stores, Inc. (NYSE:WMT), Costco Wholesale Corporation (NASDAQ:COST), and Starbucks Corporation (NASDAQ:SBUX) filed suit with 16 others alleging that the settlement abridges their rights to bring future actions against card issuers for colluding on the setting of interchange fees, and does nothing to prevent fee hikes by the card companies and banks that issue the cards.

Last Friday saw Target Corporation (NYSE:TGT) and a slew of others, such as J.C. Penney Company, Inc. (NYSE:JCP) and Office Depot Inc (NYSE:ODP), file their own lawsuits, citing the same complaints as the Wal-Mart Stores, Inc. (NYSE:WMT) crew. In response, Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA) have sued right back, requesting a judge to rule in favor of the card issuers’ fee structure and implementation practices.

A big headache for card issuers
Big banks like Bank of America Corp (NYSE:BAC) and Wells Fargo & Co (NYSE:WFC) were also listed, along with the card companies, since they are the actual recipients of these disputed swipe fees. Settlement of this issue would be nice for the banks, of course, but the whole conflict has become a gargantuan pain in the neck for the card issuers. Getting a court to make moot the very foundation upon which the two retailer groups are suing would take a great weight off of their shoulders, and allow a much tidier resolution to a problem that has been an annoying sideshow for the past several years.