Visa Inc. and MasterCard Inc., in a drive to tip the scales in favor of card issuers over merchants, have established policies over the years that have led to tens of billions in costs and losses through litigation settlements and legislation.

The biggest may be the settlement proposed late Friday to end price-fixing lawsuits that grocery stores and other retailers started filing in 2005. But the costs have been piling over time, stemming from civil lawsuits not only from merchants but from the card networks' peers.

Under the terms of the latest settlement, Visa, MasterCard and several major banks, including JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, would establish a fund for $6.05 billion for roughly 7 million merchants. The networks also agreed temporarily to reduce interchange rates by 10 basis points for eight months, a benefit estimated by plaintiffs' attorneys to be worth $1.2 billion.

But some merchants contend that might not be enough. The National Association of Convenience Stores, a trade group representing more than 3,700 merchants and a plaintiff in the lawsuits, rejected Friday's proposed settlement.

The decisions by the Visa and MasterCard boards have resulted in other costly settlements. The 2004 decision by the U.S. Supreme Court to let stand a lower-court ruling in favor of the U.S. Department of Justice that found Visa and MasterCard conspired to prevent banks from issuing cards from American Express Co. and Discover Financial Services. This ruling was followed by civil cases the two smaller brands filed against the larger networks, leading to billions in costs.

In October 2008, MasterCard agreed to pay $862.5 million and Visa $1.89 billion to settle Discover's civil antitrust case. In December 2007, Visa agreed to pay Amex up to $2.25 billion to settle a civil case over rules that restricted issuers' options. And six months later MasterCard agreed to pay Amex $1.8 billion to settle its civil dispute over those rules.

To be clear, these are settlements that the card networks agreed to; they were not forced by a court to pay these amounts as penalties. However, each of these lawsuits stemmed from a policy the major card brands set, either in pricing or in rules that restricted the use of competing products.

Visa declined to comment beyond a statement provided in its press release regarding Friday's proposed settlement: “This agreement should remove the distraction of litigation for all parties,” said Joshua R. Floum, Visa general counsel. “We will go forward with a focus on helping retailers grow their businesses and providing them with efficient and valuable payment options.”

MasterCard, in a prepared statement provided by email, said that after the proposed settlement from last week it plans to continue working with its merchant partners in a collaborative and beneficial relationship.

Legislators also have targeted Visa's and MasterCard's policies. The so-called Durbin amendment under Dodd-Frank that resulted in the Federal Reserve Board halving debit card interchange to make the rates "reasonable and proportional" cost issuers an estimated $7 billion.

The nation's largest debit card issuer, Bank of America, saw its debit card interchange revenue drop by $430 million during last year's fourth quarter alone.

Much of the motivation to create the controversial policies ended when MasterCard went public in 2006 and Visa did so in 2008, notes Thomas J. Undlin, partner, at Minneapolis-based Robins, Kaplan, Miller & Ciresi, which is representing the merchants in the price-fixing case.

Before those moves and under the previous association model, their boards were represented by banks issuing cards, and they set the policies that resulted in how much issuers earned when their cards were used to initiate payment. It also resulted in competition between the two brands for issuers.

"The networks had a natural inclination to raise fees to win the issuer battle," Undlin says. "So our allegations and lawsuit attacked a perverse competition, which was to rise to the top in the price of interchange fees."

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