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Visa shrugs off swipe suit settlement tab
Visa’s chief executive officer said the settlement of a U.S. antitrust case will not hurt its earning guidance despite having to pay out more than $4 billion.
CEO Joseph Saunders said Friday the settlement was “in the best interest of all parties” and put the legal battle over “swipe fees” charged to merchants behind them.
“We are comfortable with the terms, which we do not anticipate will impact our current guidance,” Saunders said in a statement.
Visa will pay the lion’s share of the $7.25 billion settlement announced Friday, CNNMoney said. MasterCard is on the hook for $790 million and a group of major banks will pay lesser amounts.
In addition, Visa and MasterCard agreed to cut their swipe fees â€“ a price merchants pay each time a customer pays with a credit card â€“ while new rules on card usage are implemented, the plaintiffs’ law firm said in a statement.
The reduction of the swipe fee is expected to ding Visa another $1.2 billion; however, that did not seem to dissuade Wall Street, which sent Visa shares up 2.5 percent in after-hours trading Friday, CNNMoney said.
Copyright 2012 by United Press International