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NEW YORK -- Visa U.S.A. and MasterCard International have signed final agreements to pay retailers a combined $3 billion to resolve a lawsuit over debit fees.
Retailers also said they are making arrangements for the money to be received in separate lump-sum payments next year through bond offerings. Under the settlements, Visa agreed to pay $200 million every year for 10 years and MasterCard agreed to pay $100 million a year for 10 years. Each association also is required to pay $25 million to retailers by year's end, Reuters reported.
But the plaintiffs are working with banks to issue bonds backed by the expected settlement payments, said Lloyd Constantine, who represented retailers.
Constantine said the new payment scheme would save $100 million in administrative costs because it would not be necessary to repeat the process of cutting and mailing checks 10 times to the 5 million retailers that are members of the class.
Representatives from Visa and MasterCard said the move by retailers would have no impact on the credit-card associations, but that they were cooperating to provide any necessary information to banks.
The debit suit, first filed by Wal-Mart Stores Inc. in 1996, argued that Visa and MasterCard rules requiring merchants to accept their signature-verified debit cards imposed higher costs that were eventually passed on to consumers.
The signed settlement will be submitted to U.S. District Court Judge John Gleeson of the Eastern District of New York in Brooklyn on Friday. If approved, attorneys for the retailers will begin notifying the millions of class members on June 21.