We’re all in this together
Walmart and mom-and-pop retailers are usually at odds with one another, but the issue of credit card swipe fees has Walmart sharing common ground with independent pharmacists.
The National Community Pharmacists Association (NCPA), an organization representing 23,000 independent pharmacies, announced this week that it was rejecting a proposed settlement in the antitrust lawsuit involving Visa, MasterCard and several big name banks.
“NCPA joined this lawsuit to achieve meaningful, long-term reforms to the current swipe fee system. This proposed settlement came woefully short by not imposing necessary fundamental changes to the structure of the industry and the rules affecting merchants, particularly small business community pharmacies,” said NCPA CEO Douglas Hoey.
The trade group’s action followed a similar rebuff from Walmart last week that saw the company openly solicit others to join it in rejecting the proposed settlement.
“The proposed settlement would not structurally change the broken market or prohibit credit card networks from continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year,” according to a statement released by Walmart. “The proposed settlement would require merchants to broadly waive their rights to take action against the credit card networks for detrimental conduct or acts. We believe the proposed settlement would also constrain emerging payments innovation. As Walmart continues to seek reform that will provide transparency and true competition among financial institutions, we encourage all merchants to put consumers first and reject the settlement.”
NCPA’s Hoey took things a step further, singling out specific provisions of the settlement as fundamentally flawed.
“First, while the settlement appears to offer merchants the ability to pass along some excessive credit card fees to their customers in order to incentivize consumers to use alternative, lower-cost methods of payment, enough strings are attached and existing barriers exist to effectively eliminate this as an option,” Hoey said. “Second, despite the fact that this proposal does little to reform a badly broken system, the settlement broadly curtails pharmacies and other merchants from taking any future action against the credit card companies by releasing any and all claims going forward. Finally, nothing in this agreement restrains the credit card companies from imposing significantly higher fees for years to come, effectively wiping out the monetary component of the settlement.”
The kerfuffle over credit card swipe fees is the result of a July 13 announcement by Visa and MasterCard that they had reached a settlement in the matter. The National Association of Convenience Stores (NACS) was the first to fire a salvo following the card issuers’ settlement announcement.
“NACS does not accept this proposed settlement and we reserve the right to fight it if other class representatives do accept it,” NACS president and CEO Henry Armour said at the time.