In the lawsuit, filed in US District Court for the Western District of Arkansas, where Walmart is headquartered, the firm claims that Visa charged the retailer with excessive swipe fees over nearly nine years between January 2004 and November 2012. Swipe fees must be paid by the retailer to the card issuer every time a customer pays by debit or credit card.
The move follows a recent settlement between retailers, Mastercard, and Visa in December. The case drew outrage because of the sum of money the companies agreed to pay out – $5.7bn – which some retailers say is simply not enough to compensate for the damages caused. The case was also controversial because the settlement included a clause that made retailers give up their right to sue the companies in the future.
Several high-profile retailers opted out of the settlement, including Walmart, stating that the settlement did not prohibit the card networks from upping the prices in the future.
In the lawsuit Walmart asserts that Visa colluded with banks to artificially inflate the fees and that they had to raise prices to compensate for the higher charges.
“The anticompetitive conduct of Visa and the banks forced Walmart to raise retail prices paid by its customers… as a means of offsetting some of the artificially inflated interchange fees,” reads court documents, as reported by Reuters.
Retailers claim that the fees are so high because of the lack of competition between the two card network giants
Retailers claim that the fees are so high because of the lack of competition between the two card network giants. Banks must negotiate with either Visa or Mastercard to become part of the networks, and a fee is then agreed to charge retailers to process the transaction. Some of this fee then goes to the bank, but a larger portion ends up in Visa and Mastercard’s pockets.
Meanwhile, Walmart suffered in the last months of the year as bad weather helped to cut store sales by 0.4 percent. For the 2014 fiscal year, which ended at the end of January, the company reported a disappointing net income of $17bn, down six percent on the year before. More and more shoppers are buying online; Walmart says web sales grew 30 percent in 2013 to over $10bn.
Walmart has over 4,000 stores in the US but warns that some may have to close if the poor figures continue. Furthermore, the company has been streamlining their international business; in October last year Walmart closed 50 stores in Brazil and China after sluggish performances.
