San Diego Pizzeria Sues Visa, Mastercard Over Credit Card Fee Practices
The Pizza Standard sued Visa, Mastercard and banks for credit card fees excluded from prior settlements.
Why it matters: Legal and corporate counsel must monitor this suit as it underscores challenges in settling credit card fee disputes and may affect future compliance and settlement strategy.
- The Pizza Standard filed its lawsuit on September 30, 2023, against Visa, Mastercard, Bank of America, Capital One, Chase, Citibank, and Wells Fargo.
- The suit targets interchange fees charged after January 24, 2019, which were excluded from the 2019 $5 billion settlement.
- Visa and Mastercard proposed a $30 billion settlement in March 2024 to cap fees, later revised to $38 billion with limited concessions.
- Nearly 1,000 merchants, including the Merchants Payments Coalition, oppose the latest settlement over concerns about insufficient relief and broad issuer immunity.
The Pizza Standard LLC, a San Diego pizzeria, filed a class-action lawsuit on September 30, 2023 against Visa, Mastercard, and major banks such as Bank of America, Capital One, Chase, Citibank, and Wells Fargo. The suit alleges these defendants artificially inflated credit card processing fees charged to merchants.
This litigation focuses on interchange fees — the charges merchants pay card issuers per transaction — applied after January 24, 2019. These fees were excluded from the 2019 $5 billion settlement, which resolved earlier claims. Since The Pizza Standard only started accepting Visa and Mastercard cards in 2021, it was not part of prior settlements.
In March 2024, Visa and Mastercard proposed a $30 billion settlement to cap swipe fees at 0.12% per transaction. However, Judge Margo Brodie rejected this offer in June 2024, deeming the concessions inadequate.
A revised $38 billion settlement received preliminary approval later in 2024. It includes a 0.1 percentage point fee reduction for five years and allows merchants to opt out of accepting certain Visa and Mastercard cards. Despite this, many merchants remain unconvinced.
Nearly 1,000 merchants and trade groups, including the Merchants Payments Coalition, object to this revised settlement. They argue it grants broad immunity to card issuers and offers only temporary, ineffective relief due to multiple loopholes, as outlined in the coalition’s press release.
The Pizza Standard’s lawsuit describes the defendants’ practices as a "massive, ongoing conspiracy" to maintain artificially high fees. This emerging case highlights continued merchant dissatisfaction despite multiple settlements and may affect future antitrust scrutiny and dispute resolution around credit card fees.
By the numbers:
- $5 billion — settlement amount approved in 2019 addressing earlier fee claims
- $30 billion — initial settlement offer by Visa and Mastercard in March 2024
- $38 billion — revised settlement amount with reduced fees and opt-out provisions, preliminarily approved in 2024
- ~1,000 merchants — number opposing revised settlement citing loopholes and broad immunity
Yes, but: Although the latest settlement proposes fee reductions and opt-out options, significant merchant groups argue it fails to deliver meaningful relief and allows issuers extensive legal protections.
What's next: The court will hold a hearing later in 2024 to decide on final approval of the revised $38 billion settlement amid sustained merchant objections.