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NEW YORK - Credit card companies Visa USA Inc. and MasterCard International Inc. could face damages of more than $39 billion if top U.S. retailers prevail in an antitrust suit now awaiting pretrial review, the Wall Street Journal reported today on its online edition.
The six-year-old case involves some of the nation's largest retailers like Wal-Mart Stores, Sears, Roebuck & Co. and Safeway.
At issue is whether Visa and MasterCard can force retailers to accept their branded debit cards, which carry processing fees far higher than those of conventional debit cards, the Journal said.
The estimate of damages had been under seal in federal court in Brooklyn, N.Y. but appeared in recent correspondence with the Supreme Court that hadn't been previously disclosed, the report added.
According to the Journal, Visa and MasterCard have asked the high court to strike down an appeals-court ruling last year that certified the case as a class-action suit, which would entitle nearly every merchant in nation to damages if the plaintiffs prevail.
Banks like the Visa and MasterCard debit cards because they make more money from them.
In the suit, the plaintiffs say that processing Visa and MasterCard debit cards like credit cards costs $1.49 per $100, compared with nine cents for conventional, online debit cards, which are processed instantaneously after a consumer enters a personal identification number, the report said.
It added that retailers say they're forced to pay billions of dollars a year in extra processing charges, costs that are passed on to their customers. Officials from Visa and MasterCard were not immediately available for comment.