There is a chance that Visa will have to pay American Express $2.25 billion. What is the reason for this?

Question

Which two banks were involved in this 2004 Amex/Visa case?

Answer 1

about 100%!!!!

Answer 2

two? how about nearly all of them?

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VISA was/is a collective corporation owned by its member banks. One of the early requirements was that no member bank was permitted to issue any other brand of charge card [MasterCard, Amex, etc.]

MasterCard had similar restriction.

Later, banking mergers lead to the situation where a VISA bank bought a MasterCard bank, or vice versa, and both VISA and MC amended their policies to permit members to issue the other card, but not an American Express (or other third party) card.

AmEx brought suit alleging that this now constituted an unfair restraint of trade because it was frozen out of much of the merchant fee business. The banks counterclaimed that AmEx was unfairly restraining their merchant trade [taking charge card deposits from stores, etc.] because AmEx's mandated merchant fees are much higher than those of VISA and MC and AmEx prohibits merchants from charging a higher price to the customer to cover their higher fee.

MasterCard settled out of court by paying [I forget how much] a year or two back. Now it looks like VISA will also settle.

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Afaik, the poor merchant who gets stuck for the higher fees assessed by AmEx has yet to be represented in a class action suit against AmEx alleging that their policies unduly restrain his trade in that he can't recover the higher fees by adding a surcharge to bills paid with an AmEx card.

If and when it gets filed, the possible damages will be much larger than the settlements that AmEx did/will receive from MC and VISA.

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I do not know if Diner's Club and/or Carte Blanche and/or Discover have similarly settled with VISA/MC. [DC and CB are owned by CitiGroup, last I heard.].


does this help?