Print

Mail

wiki links

Visa reaches deal with American Express to settle suit

Visa agreed to pay some US$2.25 billion to American Express to settle a lawsuit alleging collusion to block rival bank-issued credit cards in the US, the two companies said on Wednesday.

The settlement leaves MasterCard as a defendant in the case filed in US federal court in 2004.

The lawsuit centers around allegations that the two major credit-card issuers, Visa and MasterCard, illegally colluded to keep their member banks from issuing cards branded by American Express or other issuers.

"The size of this settlement, along with earlier court rulings, underscores the seriousness of the damage done by the illegal boycott," said Kenneth Chenault, American Express chairman and chief executive.

"We plan to move forward with the litigation to hold MasterCard accountable for the illegal actions that blocked banks from working with us for many years and to seek full compensation for the value that would have been generated for our shareholders," he said.

The settlement is subject to the approval of Visa member banks, which will be dropped as defendants if the deal is finalized.

Visa Inc, the umbrella group for the global credit-card brand, said Visa USA members would fund the settlement.

Under the proposed deal, Visa would pay US$945 million and additional payments over the next 16 quarters for the rest of the money.
This story has been viewed 695 times.