MasterCard Jumps on Visa Win

It says a judge issues an injunction against a rival's fee structure.
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Updated from 1:30 p.m.

A federal judge slapped an injunction on a fee Visa had sought to impose on member banks, rival

MasterCard

(MA) - Get Report

said.

Purchase, N.Y.-based MasterCard said federal Judge Barbara Jones ruled Visa's Settlement Service Fee "was unlawful and must be repealed." The fee applied to Visa-issuing banks that sought to send business to other transaction-processing networks, such as MasterCard's. The judge ruled the banks should be able to do so without paying a penalty, MasterCard said.

Visa adopted the fee after it and MasterCard settled a multibillion-dollar merchant class action suit over debit transaction fees.

Visa said it might appeal.

"Visa is carefully analyzing the court's ruling and weighing all its legal options, including a possible appeal. Visa's Settlement Service Fee was enacted in 2003 and requires any top 100 Visa debit issuer whose debit volume drops below its debit volume ending September 30, 2003 to fund its share of the 'Wal-Mart' merchant class action settlement. With the Settlement Service Fee, Visa ensured that Visa members who were recipients of the Visa check card revenue challenged in the 'Wal-Mart' lawsuit did not leave a disproportionate burden to other debit issuers by shifting their debit volume away from Visa without paying their share of the settlement.

"Since Visa enacted the Settlement Service Fee, competition for debit card issuance has remained vibrant. Debit wins by MasterCard demonstrate that Visa's Settlement Service Fee has not prevented members from issuing MasterCard debit cards. We are confident our issuers are committed to Visa's debit products due to the strong value they offer, not the Settlement Service Fee.

"Visa has earned a leadership position in part because of its integrated debit strategy that provides cardholders, members and merchants a full range of innovative, reliable and safe payment options."

MasterCard jumped $6.39 to $145.80.