ATM operators have filed a lawsuit against MasterCard and Visa, accusing them of fixing prices. The suit, filed on Wednesday in federal court in Washington, D.C., claims that the credit card issuers forced ATM operators to sign contracts that control the fees they are allowed to charge card holders.
MasterCard & Visa Force Higher ATM Fees
The ATM operators filing the suit have alleged that both card companies have forced them to agree to contracts that prevent them from charging lower fees when consumers use debit cards to access smaller out-of-network ATMs.
Typically, when a customer is issued an ATM/debit card by their bank, they pay nothing to withdraw funds as long as they use in-network ATMs. But if they use an out-of-network bank ATM or an independent ATM that is not affiliated with a bank (usually those found in drug stores, convenience stores and gas stations), they will be charged a fee.
The role of credit card companies like MasterCard and Visa is to process those transactions. The same goes for smaller networks like Star, Nyce and Pulse, which is owned by Discover.
Banks and independent ATM operators have the freedom to choose more than one network for their cards’ transactions to be processed through. They also have the right to charge the fees they’d prefer for each transaction that is processed for an out-of-network card.
The network providers’ role usually doesn’t include setting prices charged at machines, but the ATM operators allege MasterCard and Visa have overstepped their bounds by disallowing them to set their own prices.
Class-Action Status Sought
The plaintiffs in the case are trade group the National ATM Council and several independent ATM operators who, combined, operate about half of the 400,000 ATMs in the country.
They are seeking class-action status for their lawsuit and “tens of millions of dollars” in damages and compensation for violations of antitrust laws. They also hope the suit will lift the curtain on the complex, behind-the-scenes dealings in how card transactions are processed.
They say MasterCard and Visa are forcing them to charge consumers the same fee consistently–even when their cards can access smaller networks that are cheaper for the ATM operators to use–to avoid competition. If consumers have the opportunity to pay less money at smaller networks’ ATMs then they may use them instead.
Jonathan Rubin of Rubin PLLC, the Washington, D.C. antitrust law firm that filed the lawsuit, told The Associated Press, “Some people are not going to use an ATM because of the $2.50 fee. By discouraging those customers, (MasterCard and Visa) are holding down the volume of ATM transactions.”
AP contacted MasterCard Inc. and Visa Inc. regarding the suit, but representatives declined to comment.
