Digital Transactions Authoritative, insightful and timely information for payments professionals
The ranks of major retailers suing the bank card networks over interchange swelled by one today when Publix Super Markets Inc. announced it had filed a federal antitrust lawsuit against Visa USA and MasterCard International. The Lakeland, Fla.-based grocery chain's suit alleges the practice of setting interchange by the two networks, along “their respective member banks,” is anticompetitive. “When customers use a credit card, the retailer must pay an interchange fee to the issuing card's bank without an opportunity to negotiate lower rates,” says a statement released today by Publix. The suit, which also alleges “deceptive practices” by the card associations, is the fifth major case to be brought by retailers against the bank card systems over interchange since June, and the second in as many weeks. Last week, a group of four trade associations representing supermarkets, convenience stores, and drugstores sued the associations and several big banks. Six chains led by Kroger Co. filed separate suits against Visa and MasterCard this summer, while in June a group of small merchants, including Photos Etc. Corp. and others, sued the associations. “In a time when more than 60% of our customers prefer to pay by debit or credit card, it is astonishing that interchange rates continue to rise,” said Maria Brous, director of media and community relations for Publix, in a statement. Brous tells Digital Transactions News Publix's complaint hinges on what she says is the merchant's inability to negotiate interchange rates with the networks. “We're asking the court to determine whether interchange is legal or illegal without our ability to negotiate,” she says. Publix, which filed its suit in the U.S. District Court for Eastern District of New York, refuses to give statistics on how many card transactions it accepts or its acceptance costs. In addition to its grocery business, the retailer owns an electronic funds transfer network, called Presto, that links some 950 ATMs in its stores. The company operates 865 stores in the South and Southeast, with sales of $18.6 billion in 2004.
