Visa and Mastercard Agree to Pay $167.5 Million to Settle Decade-Long ATM Fee Class Action Lawsuit

Visa (V) and Mastercard (MA), the world’s two largest payment networks, have agreed to a significant financial settlement, committing to pay $167.5 million to resolve a long-running class action lawsuit. The legal action centered on allegations that the companies conspired to artificially boost fees associated with accessing cash through automated teller machines (ATMs).

Background of the ATM Fee Litigation

The class action lawsuit, which was first filed in October 2011, accused the payment giants of anti-competitive practices that resulted in inflated ATM access fees for consumers. The core of the complaint was that Visa and Mastercard allegedly worked together to maintain and increase the fees charged when cardholders used their networks for ATM transactions.

The settlement, confirmed by court documents, brings an end to a legal battle that has spanned more than a decade. The resolution provides compensation for a broad class of consumers, potentially including anyone who used an ATM since 2007, according to details related to the case.

The Material Impact of the $167.5 Million Settlement

The $167.5 million figure represents the total amount earmarked for the settlement fund, which will be distributed to affected customers after legal fees and administrative costs are deducted. While the settlement is substantial, it represents a fraction of the annual revenue generated by both Visa and Mastercard, which process trillions of dollars in transactions globally.

For the payment networks, resolving the lawsuit removes a significant legal overhang. Class action litigation, particularly those alleging anti-competitive behavior, can pose long-term financial and reputational risks. By agreeing to the settlement, both companies avoid the uncertainty and potential higher costs associated with taking the case to trial.

• The lawsuit alleged that the companies conspired to artificially boost ATM access fees.
• The class action was originally filed in October 2011.
• The settlement amount is $167.5 million.
• The affected class of customers includes those who used an ATM since 2007.

Market and Sector Implications

The settlement underscores the ongoing regulatory and legal scrutiny faced by major payment networks regarding the fees they charge. Interchange fees, network fees, and access fees are constant points of contention among retailers, banks, and consumer groups globally. While this specific case focused on ATM access, it highlights the sensitivity surrounding the cost structure of digital and card-based payments.

The resolution allows Visa and Mastercard to focus resources away from litigation and toward their core business of expanding digital payment infrastructure. Although the settlement is a financial hit, the market generally views the resolution of long-standing legal liabilities as a positive step, removing uncertainty that can weigh on stock performance.

The $167.5 million payout resolves accusations that the payment giants engaged in collusion to inflate fees, providing compensation to consumers affected over a period spanning more than 15 years.

The next steps involve the court's final approval of the settlement terms and the establishment of a claims process, which will determine how eligible customers can receive their portion of the $167.5 million fund.