SANTA FE, N.M. (CN) — Visa and Mastercard will pay $3.4 million to settle an antitrust lawsuit in which New Mexico accused the credit card giants of causing economic harm through mandatory interchange fees.
The state sued Visa and Mastercard in December 2014, taking aim at interchange fees, which merchants pay every time they accept a purchase by credit or debit card. The fees average nearly 2 percent of the purchase and are not open to negotiation.
New Mexico’s attorney general claimed the companies colluded to fix the interchange fees, which had risen consistently even as costs to the credit card companies went down. The state also accused the companies of imposing rules that restricted merchants from encouraging the use of competing cards with lower fees.
Attorney General Hector Balderas announced the settlement on Thursday. The two companies are to pay a total of $3.4 million into a fund administered by the Attorney General’s Office, for “law enforcement efforts to prevent and prosecute financial fraud or unfair or deceptive acts or practices, including anti-competitive behavior, and to investigate, enforce, and prosecute other illegal conduct related to financial services or consumer protection and antitrust laws.”
Visa will pay two-thirds of the settlement, roughly $2.266 million, and Mastercard agreed to pay one-third, about $1.133 million.
The companies also will pay to create and deliver to the Attorney General’s Office 200,000 magnets printed with information about consumer credit rights. Visa and MasterCard will display the same educational material on their websites until the end of 2018.
“We negotiated an agreement that will compensate the harm to New Mexico’s economy, enforce our strong consumer protection statutes, and deter companies that seek to exploit our citizens and violate our consumer protection laws,” Balderas said in a statement. “I’m committed to protecting New Mexico consumers, but education is also key and that’s why our office will be hosting free financial literacy trainings regarding credit and debit card ‘fine print’ in Albuquerque, Española and Las Cruces.”