8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 1/512
UNITED STATES DISTRICT COURT FOR PUBLICATION
EASTERN DISTRICT OF NEW YORK
MEMORANDUMAND ORDER05-MD-1720 (JG) (JO)
IN RE PAYMENT CARD INTERCHANGEFEE AND MERCHANT DISCOUNTANTITRUST LITIGATION
A P P E A R A N C E S
ROBBINS GELLER RUDMAN & DOWD LLP655 West Broadway, Suite 1900San Diego, CA 92101
ROBINS, KAPLAN, MILLER & CIRESI L.L.P2800 LaSalle Plaza800 LaSalle Avenue SouthMinneapolis, MN 55402
BERGER & MONTAGUE, P.C.1622 Locust StreetPhiladelphia, PA 19103
Co-Lead Counsel for Class Plaintiffs
KENNY NACHWALTER, P.A.201 South Biscayne Boulevard, Suite 1100Miami, FL 33131
SPERLING & SLATER55 West Monroe Street, Suite 3200Chicago, IL 60603
HANGLEY ARONCHICK SEGALPUDLIN & SCHILLER30 North Third StreetHarrisburg, PA 17101
Counsel for the Individual Plaintiffs
ARNOLD & PORTER LLP399 Park Avenue
New York, NY 10022
HOLWELL SHUSTER & GOLDBERG LLP125 Broad Street, 39th Floor
New York, NY 10004
Attorneys for Defendant Visa U.S.A. Inc.
WILLKIE FARR & GALLAGHER LLP787 Seventh Avenue
New York, NY 10019
PAUL, WEISS, RIFKIND, WHARTON &GARRISON LLP2001 K Street, NWWashington, DC 20006
Attorneys for Defendant MasterCard
International Incorporated
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ & 6B .. @"A$C5 D' &-&10
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 2/512
ii
MORRISON & FOERSTER LLP
1290 Avenue of the Americas New York, NY 10104
Attorneys for Defendant Bank of America
SHEARMAN & STERLING LLP
599 Lexington Avenue New York, NY 10022
Attorneys for Defendant Barclays Bank
O’MELVENY & MYERS LLPTimes Square Tower7 Times Square
New York, NY 10036
Attorneys for Defendant Capital One Bank
(USA)
SKADDEN, ARPS, SLATE, MEAGHER &FLOM LLP4 Times Square
New York, NY 10036
Attorneys for Defendant JPMorgan Chase &
Co.
SIDLEY AUSTIN LLP1 South Dearborn StreetChicago, IL 60603
Attorneys for Defendant Citibank, N.A.
KEATING MUETHING & KLEKAMP PLL1 East Fourth Street, Suite 1400Cincinnati, OH 45202
Attorneys for Defendant Fifth Third Bancorp
KUTAK ROCK LLP1650 Farnam StreetOmaha, NE 68102
Attorneys for Defendant First National Bank
of Omaha
WILMERHALE7 World Trade Center, 250 Greenwich Street
New York, NY 10007
Attorneys for Defendant HSBC Finance
Corporation
JONES DAY51 Louisiana Avenue, NWWashington, DC 20001
Attorneys for Defendant National City
Corporation
PULLMAN & COMLEY, LLC850 Main StreetBridgeport, CT 06601
Attorneys for Defendant Texas Independent
Bancshares, Inc.
ALSTON & BIRD LLP1201 West Peachtree StreetAtlanta, GA 30309
Attorneys for Defendant SunTrust Banks,
Inc.
PATTERSON BELKNAP WEBB &TYLER LLP1133 Avenue of the Americas
New York, NY 10036
Attorneys for Defendant Wachovia Bank,
NA.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ / 6B .. @"A$C5 D' &-&1E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 3/512
iii
FRIEDMAN LAW GROUP LLP
270 Lafayette StreetSuite 1410
New York, NY 10012
Attorneys for Plaintiffs in No. 05-cv-5074
FREEDMAN BOYD DANIELS
HOLLANDER GOLDBERG & CLINE,P.A.P.O. Box 25326, 20 First Plaza, Suite 700Albuquerque, NM 87102
Attorneys for Plaintiffs in No. 05-cv-5075
CONSTANTINE CANNON LLP335 Madison Avenue, 9th Floor
New York, NY 10017
Attorneys for Plaintiff NATSO, Inc.
QUINN EMANUEL51 Madison Avenue, 22nd Floor
New York, NY 10010
Attorneys for Objector Home Depot U.S.A.,
Inc.
VORYS, SATER, SEYMOUR AND PEASELLP52 East Gay StreetColumbus, OH 43215
Attorneys for Objector Target Corporation
EMERY, CELLI, BRINCKERHOFF &ABADY LLP75 Rockefeller Plaza, 20th Floor
New York, NY 10019
Attorneys for Objector National Retail
Federation
SCHLAM, STONE & DOLAN, LLP26 Broadway, 19th Floor
New York, NY 10004
Attorneys for Amicus Curiae U.S. Public
Research Interest Group
PERKINS COIE LLPFour Embarcadero Center, Suite 2400San Francisco, CA 94111
Attorneys for Objector First Data
Corporation
BOIES, SCHILLER & FLEXNER LLP575 Lexington Avenue, Seventh Floor
New York, NY 10022
Attorneys for Objector American Express Co.
KIRKLAND & ELLIS153 East 53rd Street
New York, NY 10022
Attorneys for Objector Discover Financial
Services
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0 6B .. @"A$C5 D' &-&1.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 4/512
iv
MILLER & CHEVALIER CHARTERED
655 Fifteenth Street, NW, Suite 900Washington, DC 20005
Attorneys for Objector Blue Cross Blue Shield
Entities
THE LAW OFFICES OF JOHN J. PENTZ
19 Widow Rites LaneSudbury, MA 01776
Attorneys for Defendant Daviss Donuts and
Deli
LAW OFFICES OF EDWARD F. SIEGEL705 South Alton Way #1CDenver, CO 80247
Attorneys for Objector Vicente Consulting LLC
THRASH LAW FIRM, P.A.1101 Garland StreetLittle Rock, AR 72201
Attorneys for R&M Objectors
JOSHUA R. FURMAN LAW CORP.15260 Ventura Boulevard, Suite 2250Sherman Oaks, CA 91403
Attorneys for Objector Jon M. Zimmerman
OHIO ATTORNEY GENERAL MIKE DeWINE150 East Gay Street, 23rd FloorColumbus, OH 43215
Attorney for Objector State of Ohio
STATE OF CALIFORNIA DEPARTMENTOF JUSTICEOFFICE OF THE ATTORNEY GENERAL455 Golden Gate Avenue, Suite 11000San Francisco, CA 94102-7004
Attorney for Objector State of California
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E 6B .. @"A$C5 D' &-&1)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 5/512
CONTENTS
A. Preliminary Statement ......................................................................................................... 2
1. Structure of a Credit Card Transaction; Interchange Fees .................................. 2
2. The Default Interchange Rule; Honor-all-Cards Rules; Anti-Steering Rules .... 3
3. The Course of the Litigation; Industry Changes Occurring During the
Litigation; and the Proposed Settlement ............................................................. 4
4. Overview of Reasons for Approval .................................................................... 8
B. The Claims in the Case ..................................................................................................... 13
C. The Standard for Approving a Proposed Settlement ........................................................ 14
1. Procedural Fairness ........................................................................................... 15
2. Substantive Fairness.......................................................................................... 17
a. The Complexity, Expense, and Likely Duration of the Litigation ............... 17
b. The Reaction of the Class to the Settlement ................................................. 18
c. The Stage of the Proceedings and the Amount of Discovery Completed..... 20
d. The Risks of Establishing Liability and Damages, and of Maintaining the
Class Action through the Trial ...................................................................... 20
e. The Ability of Defendants to Withstand a Greater Judgment....................... 29
f. The Range of Reasonableness of the Settlement Fund in Light of the Possible
Recovery and Attendant Risks of Litigation ................................................. 29
D. The Objections .................................................................................................................. 31
1. Rule Reforms .................................................................................................... 31
a. The Elimination of the Networks’ No-Surcharge Rules ............................... 31
b. The Buying Group Provision ........................................................................ 38
2. The Releases ..................................................................................................... 39
3. The Health Insurers’ Objections ....................................................................... 42
4. Claims by States Acting in their Sovereign Capacity ....................................... 43
5. Discover’s Objection ........................................................................................ 45
6. The Notice to Class ........................................................................................... 45
7. Cohesiveness of the Rule 23(b)(2) Class; Adequacy of Class Plaintiffs .......... 46
E. The Plan of Allocation ...................................................................................................... 48
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ . 6B .. @"A$C5 D' &-&1F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 6/512
1
JOHN GLEESON, United States District Judge:
In this antitrust action, a putative class of approximately 12 million merchants
alleges that, among other things, defendants Visa U.S.A. Inc. (“Visa”) and MasterCard
International Incorporated (“MasterCard”), as well as issuing and acquiring banks (collectively
the “defendants”), conspired to fix interchange fees in violation of Section 1 of the Sherman Act.
Before me now is a motion by Class Plaintiffs,1 certain other plaintiffs who are
not members of the class (referred to throughout the case and in this opinion as the “Individual
Plaintiffs”2), and the defendants for final approval of a proposed settlement. In essence, the
settlement calls for (1) a cash recovery slightly in excess of $7 billion (before reductions for opt-
outs) by members of a Rule 23(b)(3) class; and (2) certain reforms of the defendants’ rules and
practices to benefit the members of a Rule 23(b)(2) class. SA ¶¶ 33, 68.3 They also seek
1 “Class Plaintiffs” refers to proposed class representative merchants Photos Etc. Corp.; Traditions,Ltd.; Capital Audio Electronics, Inc.; CHS Inc.; Crystal Rock LLC; Discount Optics, Inc.; Leon’s TransmissionService, Inc.; Parkway Corp.; and Payless ShoeSource, Inc.
2 The Individual Plaintiffs are: Ahold U.S.A., Inc.; Albertsons LLC; Albertson’s, Inc.; BI -LO, LLC;Delhaize America, Inc.; Eckerd Corporation; The Great Atlantic & Pacific Tea Company; H.E. Butt GroceryCompany; Hy-Vee, Inc.; The Kroger Co.; Maxi Drug, Inc. (and doing business as Brooks Pharmacy); Meijer, Inc.;
Meijer Stores Limited Partnership; Pathmark Stores, Inc.; QVC, Inc.; Raley’s; Rite Aid Corporation; Safeway Inc.;SuperValu Inc.; and Walgreen Co.
3 Citations in the form “SA ¶ __” refer to the paragraphs of the proposed settlement agreement,which is titled “Definitive Class Settlement Agreement.” It is located at docket entry 1656-1 and referred to here asthe “Settlement Agreement.” The Rule 23(b)(3) class is defined at SA ¶ 2(a) as follows:
A “Rule 23(b)(3) Settlement Class” under Federal Rules of Civil Procedure23(a) and (b)(3), from which exclusions shall be permitted, consisting of all
persons, businesses, and other entities that have accepted Visa-Branded Cardsand/or MasterCard-Branded Cards in the United States at any time from January1, 2004 to the Settlement Preliminary Approval Date, except that this Class doesnot include the named Defendants, their directors, officers, or members of theirfamilies, financial institutions that have issued Visa- or MasterCard-BrandedCards or acquired Visa- or MasterCard-Branded Card transactions at any timefrom January 1, 2004 to the Settlement Preliminary Approval Date, or theUnited States government.
The Rule 23(b)(2) class is defined at SA ¶ 2(b)as follows:
A “Rule 23(b)(2) Settlement Class” under Federal Rules of Civil Procedure23(a) and (b)(2), from which exclusions shall not be permitted, consisting of all
persons, businesses, and other entities that as of the Settlement Preliminary
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ ) 6B .. @"A$C5 D' &-&11
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 7/512
2
approval of the proposed plan of allocation of the settlement fund, and Class Counsel4 seeks
attorneys’ fees and costs.
I held a fairness hearing on September 12, 2013, at which there was extensive oral
argument in support of and in opposition to the proposed settlement.
For the reasons discussed below, I approve the proposed settlement and the plan
of allocation. The motion for fees and costs will be decided separately.
A. Preliminary Statement
1. Structure of a Credit Card Transaction; Interchange Fees
A Visa or MasterCard credit card transaction involves five parties: (1) the
customer ; (2) the merchant; (3) the “acquiring bank”; (4) the “issuing bank”; and (5) the network
itself, that is, Visa or MasterCard. The acquiring bank is the link between the network and the
merchant that accepts the card for payment. The issuing bank is the bank that issued the credit
card to the customer. When the cardholding customer presents a credit card to pay for goods or
services, the accepting merchant relays the transaction information to the acquiring bank. The
acquiring bank processes the information and transmits it to the network. The network relays the
information to the issuing bank, which approves the transaction if doing so is consistent with the
cardholder ’s account status and credit limit. The approval is conveyed to the acquiring bank,
which in turn relays it to the merchant.
The issuing bank then transmits to the acquiring bank the amount of the purchase
price minus the “interchange fee.”5 The acquiring bank withholds an additional fee – called the
Approval Date or in the future accept any Visa-Branded Cards and/orMasterCard-Branded Cards in the United States, except that this Class shall notinclude the named Defendants, their directors, officers, or members of theirfamilies, financial institutions that have issued Visa- or MasterCard-BrandedCards or acquired Visa- or MasterCard-Branded Card transactions at any timesince January 1, 2004, or do so in the future, or the United States government.
4 “Class Counsel” refers to the three firms appointed co-lead counsel for Class Plaintiffs: Robbins
Geller Rudman & Dowd LLP; Robins, Kaplan, Miller & Ciresi L.L.P; and Berger & Montague, P.C.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ F 6B .. @"A$C5 D' &-&1(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 8/512
3
“merchant discount fee” – for its processing services. Thus, the total amount the merchant
receives for the transaction is the purchase price minus the sum of the interchange fee and the
merchant discount fee.
Interchange fees vary based on factors that include the type of card used and the
type of merchant. Many Visa and MasterCard credit cards provide rewards to the cardholders.
Those rewards cost money, and thus these cards, referred to in the industry and here as “premium
cards,” are associated with higher interchange fees.
2. The Default Interchange Rule; Honor-all-Cards Rules; Anti-Steering Rules
The competitive problem that gave rise to this case, according to the plaintiffs, is
the result of a combination of network rules. The Honor-all-Cards rules require merchants who
accept any Visa- or MasterCard-branded credit cards to accept all cards of that brand, no matter
what bank may have issued them and no matter the interchange fee. The Honor-all-Cards rules
created what the merchants term the “hold-up problem.” Unlike checks, which are redeemed by
the drawee banks “at par,” that is, without the drawee bank charging a fee for acceptance, the
issuing bank of a Visa or MasterCard credit card is free to demand whatever interchange fee it
chooses (“hold-up”) in order to accept the transaction from the merchant who is required to
accept the card.
As the merchants describe them, the default interchange rules are the networks’
“solution” to the hold-up problem. Those rules establish mandatory interchange fees that apply
to every transaction on the network unless the merchant and the issuing bank have entered into a
bilateral interchange agreement. However, the merchants complain that the combination of the
Honor-all-Cards rules and the anti-steering rules, which are discussed further below, strips the
5 The interchange fee can be a flat fee, a percentage of the transaction price, or a combination of the
two.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 1 6B .. @"A$C5 D' &-&(-
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 9/512
4
issuing banks of any incentive to accept interchange fees lower than the default interchange fees.
And obviously merchants have no incentive to negotiate a higher interchange fee. Thus “default
interchange,” the merchants assert, becomes a fixed rate that applies to every credit card
transaction (with the narrow exception of transactions by very large merchants who have
sufficient volume that they can negotiate their own private interchange fees).
A linchpin to the problem, as far as the merchants are concerned, is the package
of anti-steering restraints that prohibit merchants from using price signals at the point of sale to
steer customers to less costly forms of payment. The no-surcharge rules prohibit merchants from
adding a surcharge to a transaction involving either of the networks’ credit cards. Thus, a
merchant who must pay a 2% interchange fee upon accepting a Visa or MasterCard credit card is
prohibited from adding a 2% surcharge (or any surcharge at all) to either discourage the use of
that card or to recoup the cost of acceptance. Similarly, until recently (as discussed further
below), no-discount rules prohibited merchants from offering price discounts at the point of sale.
There are other components to the networks’ anti-steering regimes, some of which are mentioned
below. In the aggregate, these essentially identical regimes prohibit merchants from informing
customers about higher-cost payment cards, incentivizing customers to use lower-cost cards or
other forms of payment, or recouping the acceptance costs of the cards the merchants are
required to honor.
3. The Course of the Litigation; Industry Changes Occurring During the Litigation;
and the Proposed Settlement
This case has been extensively litigated for more than eight years. Discovery,
which began in 2005, included more than 400 depositions, the production and review of more
than 80 million pages of documents, the exchange of 17 expert reports, and a full 32 days of
expert deposition testimony.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ ( 6B .. @"A$C5 D' &-&(&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 10/512
5
While the case has been pending, there have been significant developments in the
industry, some of which are attributable in whole or in part to the case itself. The very structures
of Visa and MasterCard themselves changed; in 2008 and 2006, respectively, initial public
offerings (“IPOs”) converted each from a consortium of competitor banks into single-entity,
publicly traded companies with no bank governance.
In addition, federal legislation – the so-called “Durbin Amendment” – in 2010
removed the networks’ restrictions on discounting credit and debit cards at the network level.
Thus, Visa, MasterCard, American Express and Discover can no longer prohibit merchants from
discounting their cards.6 The Durbin Amendment did not change the networks’ rules prohibiting
surcharging.
In 2010, after an investigation assisted by the information developed by the
plaintiffs here, the Department of Justice (“DOJ”) filed lawsuits against Visa, MasterCard and
American Express. In consent decrees filed in 2011, Visa and MasterCard agreed to remove
their rules prohibiting merchants from product-level discounting of credit and debit cards.
Again, the resolution of that case against these defendants did not affect the surcharging
prohibitions.
By 2011, several significant motions had been briefed and were ripe for decision,
including a motion to certify classes,7 a motion to dismiss supplemental complaints arising out of
the IPOs, and cross-motions for summary judgment.
6 The Durbin Amendment was part of the Dodd-Frank Wall Street Reform and ConsumerProtection Act of 2010, Pub. L. 111-203, 124 Stat. 1376; it is codified at 15 U.S.C. § 1693o-2(b)(3)(A)(i). TheAmendment did not allow for product-level discounting, by which a merchant could choose to discount a particularcard type.
7 The motion sought to certify an injunctive relief class (the “(b)(2)” class), and a damages class
(the “(b)(3)” class). See Fed. R. Civ. P. 23(b)(2) & (3).
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &- 6B .. @"A$C5 D' &-&(/
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 11/512
6
Even as they litigated the case full-throttle, beginning in 2008 the parties engaged
in efforts to settle their disputes. They participated in mediation sessions with the Honorable
Edward A. Infante (Ret.) and, beginning in 2009, with Professor Eric D. Green as well. The
parties had dozens of meetings and conference calls with the mediators over the next several
years.
On November 2, 2011, I held oral argument on, inter alia, the parties’ cross-
motions for summary judgment. See DE 1560.8 Even before that argument, however, the parties
requested through the mediators that any decision on those motions and on the motion for class
certification be withheld pending settlement discussions with the Court itself.9
On Friday and Saturday, December 2 and 3, 2011, at the express request of all
parties, Judge Orenstein and I engaged in lengthy settlement discussions with the parties and the
mediators. The ground rules were made clear and were agreed to on the record at the outset. In
an effort to foster as much candor and engagement as possible, all parties consented to ex parte,
off-the-record discussions about all of the various issues that required resolution before the case
could be settled. It was a process that had proven useful in a successful effort to settle a previous
antitrust class action against Visa and MasterCard. See In re Visa Check/Mastermoney Antitrust
Litig., 297 F. Supp. 2d 503 (E.D.N.Y. 2003), aff ’ d sub nom. Wal-Mart Stores, Inc. v. Visa U.S.A.,
Inc., 396 F.3d 96 (2d Cir. 2005). Indeed, several of the participants in the settlement discussions
in this case had been involved in those other settlement talks ten years earlier.
The settlement discussions on December 2 and 3, 2011 were productive. They
illuminated the parties’ positions and concerns regarding the merits of the plaintiffs’ claims, the
8 Citations in the form “DE __” refer to docket entr ies in this case.
9 In the context of settlement discussions, my use of the term “Court” in this opinion refers to bothme and Magistrate Judge James Orenstein, who has worked tirelessly and effectively throughout this litigation andwas my partner in attempting to help the parties reach a consensual resolution of the case.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ && 6B .. @"A$C5 D' &-&(0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 12/512
7
defendants’ defenses, the purposes and effects of the challenged rules, and the various ways in
which the rules might be changed by agreement to inject competition into the setting of
interchange fees for Visa and MasterCard credit cards.
After a third meeting with Judge Orenstein and me on December 15, 2011, the
parties resumed discussions with the mediators. On February 21, 2012, those discussions
resulted in an acceptance by all of the defendants and all of the named plaintiffs of the terms of a
mediators’ proposal. When the efforts to reduce the agreed-upon terms of that proposal to a
settlement agreement stalled, the parties once again sought and obtained the assistance of the
Court. On June 20 and 21, 2012, additional settlement discussions occurred in chambers
pursuant to the same terms and consent that had governed the discussions six months earlier. At
the conclusion of those two days of discussions, the parties informed the Court that they had
reached agreement on all of the issues necessary to settle the case.
On July 13, 2012, the parties filed a Memorandum of Understanding attaching a
document setting forth the terms of the settlement. See DE 1588. In October 2012, after
completing the drafting of related documents, including escrow agreements and a Plan of
Administration and Distribution, the parties executed the Settlement Agreement. See DE 1656.
On October 19, 2012, Class Counsel moved for preliminary approval of the proposed settlement,
which I granted on November 27, 2012. The order granting preliminary approval provisionally
certified classes under Rule 23(b)(2) and (b)(3). The Class Administrator notified class members
of the terms of the proposed settlement through a mailed notice and publication campaign that
included more than 20 million mailings and publication in more than 400 publications. The
notice plan was carried out between January 29, 2013 and February 22, 2013. Class members
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &/ 6B .. @"A$C5 D' &-&(E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 13/512
8
had until May 28, 2013 to opt out of the damages class, object to the proposed settlement, or
both.
The proposed Settlement Agreement provides for, among other things:
The creation of two cash funds totaling up to an estimated $7.25 billion (beforereductions for opt-outs). SA ¶¶ 9-10, 11-13.
Visa and MasterCard rule modifications to permit merchants to surcharge on Visa- orMasterCard-branded credit card transactions at both the brand and product levels.SA ¶¶ 42, 55.
An obligation on the part of Visa and MasterCard to negotiate interchange fees in goodfaith with merchant buying groups. SA ¶¶ 43, 56.
Authorization for merchants that operate multiple businesses under different “tradenames” or “banners” to accept Visa and/or MasterCard at fewer than all of its businesses.SA ¶¶ 41, 54.
The locking-in of the reforms in the Durbin Amendment and the DOJ consent decreewith Visa and MasterCard, even if those reforms are repealed or otherwise undone. SA
¶¶ 40, 44, 53, 57, Appendix J.
4. Overview of Reasons for Approval
As class action settlement proceedings go, this one has been anything but typical.
Some of the merchant plaintiffs who directly participated in the lengthy settlement discussions
and initially agreed to the terms of the settlement broke away and objected, as they were entitled
to do. Numerous other members of the merchant class have objected as well, on a variety of
grounds.
The behavior of a small number of objectors has threatened to undermine the
efforts of the others. Specifically, in their zeal to drum up objections and opt-outs by merchants
around the country, certain merchant groups established websites that spread false and
misleading information about the settlement and the merchants’ options. In April of this year I
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &0 6B .. @"A$C5 D' &-&(.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 14/512
9
had to order injunctive relief to remedy that situation; in May I came close to holding certain
entities in contempt of that injunction.
The oral presentations of the objectors at the fairness hearing were afflicted by
needless hyperbole. One of the merchant association principals who participated in the
settlement discussions and initially agreed to its terms argued that the members of his association
would be worse off if I approved the proposed settlement than they would be if they proceeded
all the way through trial and lost. Another likened the prospect of approval to the deprivation of
civil liberties in the aftermath of a terrorist attack, warning that only a “slippery slope” would
separate an order binding a large retailer to the proposed settlement and the government stripping
us of our houses and civil rights. A third cast Visa and MasterCard as modern-day Nazis, and
warned me not to assume the role of Neville Chamberlain.
If only the issues here were that simple. But in reality the vitriol and poor
behavior and feigned hysteria mask complex and difficult issues on which reasonable merchants
can and do disagree. Some of those issues stem from the fact that a lawsuit is an imperfect
vehicle for addressing the wrongs the plaintiffs allege in their complaint. For example, there are
forms of relief many objectors seek, such as the regulation of interchange fees, that this Court
could not order even if the plaintiffs obtained a complete victory on the merits. In addition, there
are features of the industry landscape, such as other credit card issuers with whom the defendants
compete, and laws in some states that prohibit merchants from surcharging the use of credit
cards, that are beyond the reach of this case but will undermine (at least in the near term) the
efficacy of the agreed-upon relief.
The proponents of the settlement disagree strongly with the objectors over the
economic value of the proposed settlement to the class members, and specifically over the
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &E 6B .. @"A$C5 D' &-&()
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 15/512
10
benefits of the proposed rules changes to the merchant class. As a result, I availed myself of the
provisions in Rule 706 of the Federal Rules of Evidence allowing for court-appointed expert
witnesses. On April 8, 2013, I appointed Dr. Alan O. Sykes of New York University School of
Law “to advise the Court with respect to any economic issues that may arise in connection with
the forthcoming motion for final approval of the proposed settlement.”10 Dr. Sykes filed a
memorandum with the Court on August 28, 2013.11 It has proved quite helpful, and he has the
gratitude of the Court.
Fortunately, well-established law provides a rubric for deciding the motion, and I
engage below in the prescribed multifactor inquiry. By way of overview, however, I conclude
that the proposed settlement secures both a significant damage award and meaningful injunctive
relief for a class of merchants that would face a substantial likelihood of securing no relief at all
if this case were to proceed.
Specifically, although the settlement either obtains or locks in place an array of
rules changes, at its heart is an important step forward: a rules change that will permit merchants
to surcharge credit cards at both the brand level (i.e., Visa or MasterCard) and at the product
level (i.e., different kinds of cards, such as consumer cards, commercial cards, premium cards,
etc.), subject to acceptance cost and limits imposed by other networks’ cards. For the first time,
merchants will be empowered to expose hidden bank fees to their customers, educate them about
those fees, and use that information to influence their customers’ choices of payment methods.
In short, the settlement gives merchants an opportunity at the point of sale to stimulate the sort of
network price competition that can exert the downward pressure on interchange fees they seek.
10 DE 2807. After consulting with the parties, see DE 5863, I issued a subsequent order establishing
procedures for the parties to provide information to Dr. Sykes and to respond to his advice to the Court. See DE5873.
11 DE 5965.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &. 6B .. @"A$C5 D' &-&(F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 16/512
11
Relief directed at the default interchange fees (even if such relief were available
from a court as opposed to a legislature) would not share that characteristic. Both Visa and
MasterCard have other elements to their fee structures. Relief aimed solely at the interchange
fees would leave them free to recoup any associated lost revenues by tinkering with those other
fees, and the merchant restraints would, in effect, place the merchants back where they started.
By focusing on those restraints, the proposed settlement seeks to empower merchants to steer
cardholders to lower-cost payment alternatives. The goal is to incentivize the networks to
compete for the merchants’ credit card volume through lower fees of all kinds, including
interchange fees, and to allow merchants to recoup their costs when their efforts to steer
customers to lower-cost means of payment do not succeed.
The objections to the proposed settlement are numerous, but in the main, they fail
for one of two reasons. First, the objectors complain about the failure of the proposed settlement
to eliminate other Visa and MasterCard rules, such as the default interchange and Honor-all-
Cards rules. But those rules undeniably have significant procompetitive effects, and they lay at
the heart of Visa’s and MasterCard’s efforts to build the successful networks they now have.
Class Counsel have good reason to believe that even if the default interchange and the Honor-all-
Cards rules are characterized as horizontal restraints (despite the IPOs), they will still receive
only Rule-of-Reason antitrust scrutiny, which they could quite easily withstand. Perhaps most
telling of all is that the Department of Justice, which recently conducted a thorough investigation
of these networks’ operating rules, declined even to challenge either rule. In short, it is hard to
persuasively challenge a compromise on the ground that it fails to eliminate rules that even a
complete success on the merits might not eliminate.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &) 6B .. @"A$C5 D' &-&(1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 17/512
12
Second, the objectors complain about factors that they say will limit the
usefulness of their newfound ability to surcharge credit cards that carry costly interchange fees.
Those factors, which include the merchant restraints imposed by American Express and the laws
prohibiting surcharging in approximately ten states, are real, and they in fact undermine to an
extent the immediate utility of the rules reforms in the proposed settlement. A merchant’s ability
to surcharge a particularly expensive Visa card is less valuable if the merchant remains unable
because of American Express’s merchant restraints to steer customers away from even higher-
priced American Express cards. Similarly, the option to surcharge that the proposed settlement
affords merchants obviously cannot be exercised in states that now have anti-consumer no-
surcharge laws.
But the virulent objections – based on those and other practical limitations on the
relief the proposed settlement affords – fail to take sufficient account of the fact that, in the end
and despite its outsized proportions, this is just an antitrust lawsuit. Even if the plaintiffs spent
several years pursuing this unwieldy case to a successful conclusion (despite substantial odds
against such a result), this Court would be in no position to grant the sweeping relief the
objectors seek. It cannot regulate interchange fees or enjoin nonparties or preempt state laws or
reform network rules that do not violate the antitrust laws. The Sherman Act affords relief only
from certain proven anticompetitive business practices. And the agreed-upon relief here, which
has the potential to unleash a new competitive force on interchange fees, falls squarely in the
wheelhouse of what this lawsuit is all about.
The first Visa/MasterCard multi-district litigation broke the tie between credit and
debit cards. The Durbin Amendment removed discounting restrictions at the network level. The
consent decree in the government’s case removed product-level discount restrictions. The IPOs
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &F 6B .. @"A$C5 D' &-&((
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 18/512
13
wrested control of Visa and MasterCard from the banks. This proposed settlement adds another
crucial reform – the lifting of restrictions on network- and product-level surcharging. Even if the
objectors are right in contending that additional dominoes must fall before the alleged
anticompetitive behavior of Visa and MasterCard is eradicated, those dominoes will have to fall
in other forums. That does not alter the significance of the relief provided by the proposed
settlement.
B. The Claims in the Case
Beginning in June 2005, more than 40 class action complaints were filed by
merchants against the defendants. The class actions were consolidated in 2005, together with 19
individual actions. The Court appointed Class Counsel as co-lead counsel and a consolidated
amended complaint was filed on April 24, 2006. DE 317.12
As mentioned above, the plaintiffs allege that Visa and MasterCard adopted and
enforced rules and practices relating to payment cards that had the combined effect of
unreasonably restraining trade and injuring merchants. Those rules and practices include:
Rules regarding the setting of default interchange fees. See Second Cons. Am. ClassAction Compl.
A number of “anti-steering” rules – including “no surcharge” rules, “no discounting” or“non-discrimination” rules, and “no minimum purchase” rules – that restrict merchantsfrom steering customers to lower-cost credit cards and/or forms of payment other thanVisa or MasterCard payment cards.
A number of “exclusionary” rules – including “all outlets” rules, “no bypass” rules, and“no multi-issuer” rules – that restrict merchants in accepting and processing paymentsmade with Visa and MasterCard cards.
12 Also in 2005, the Individual Plaintiffs, a group of large retailer merchants, filed lawsuits againstVisa and MasterCard, making allegations narrower than those set forth in the class action complaints here. TheIndividual Plaintiffs alleged that merchant restraints in the networks’ operating rules protected Visa and MasterCardfrom interbrand competition on the merchant side (as opposed to the bank side) of the market. Both sets of lawsuits
– the class actions and the Individual Plaintiffs’ complaints – were consolidated before me in this multidistrictlitigation.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &1 6B .. @"A$C5 D' &-/--
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 19/512
14
“Honor -all-Cards” rules, which required merchants to accept all the network ’s credit
cards or all the network ’s debit cards when proffered for payment, regardless of which bank issued the card.
Class Plaintiffs allege that these rules insulate the Visa and MasterCard networks
from competition with each other, from other brands and from other forms of payment, allowing
Visa and MasterCard and the issuing banks to set supracompetitive default interchange fees.
Class Plaintiffs allege that these rules were adopted pursuant to unlawful
agreements among the banks and Visa, and among the banks and MasterCard. Specifically, they
allege that the defendant banks were members of Visa or MasterCard and were represented on
their boards, and thus determined the networks’ rules and practices. Class Plaintiffs allege that
the banks owned and effectively operated Visa and MasterCard, such that Visa and MasterCard
were unlawful “structural conspiracies” or “walking conspiracies” with respect to their network
rules and practices. Class Plaintiffs further allege that after the Visa and MasterCard IPOs, the
unlawful agreements among the banks and Visa, and among the banks and MasterCard,
continued.
Based on these allegations, Class Plaintiffs seek damages to compensate
merchants for supracompetitive default interchange fees in the past. They also seek injunctive
relief to restructure the networks’ rules and practices in the future.
C. The Standard for Approving a Proposed Settlement
Pursuant to Federal Rule of Civil Procedure 23(e), any settlement of a class action
requires court approval. A court may approve such a settlement if it is “fair, adequate, and
reasonable, and not a product of collusion.” Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir.
2000). In so doing, the court must “eschew any rubber stamp approval” yet simultaneously “stop
short of the detailed and thorough investigation that it would undertake if it were actually trying
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ &( 6B .. @"A$C5 D' &-/-&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 20/512
15
the case.” Detroit v. Grinnell Corp., 495 F.2d 448, 462 (2d Cir. 1974), abrogated on other
grounds by Goldberger v. Integrated Resources, Inc., 209 F.3d 43 (2d Cir. 2000). Judicial
discretion is informed by the general policy favoring settlement. See Weinberger v. Kendrick ,
698 F.2d 61, 73 (2d Cir. 1982); see also Denney v. Jenkins & Gilchrist , 230 F.R.D. 317, 328
(S.D.N.Y. 2005) (“There is a strong judicial policy in favor of settlements, particularly in the
class action context. The compromise of complex litigation is encouraged by the courts and
favored by public policy.”) (footnotes, citations and internal quotation marks omitted), aff ’ d in
part and vacated in part , 443 F.3d 253 (2d Cir. 2006).
To evaluate whether a class settlement is fair, a district court examines (1) the
negotiations that led up to the settlement, and (2) the substantive terms of the settlement. See In
re Holocaust Victims Assets Litigation, 105 F. Supp. 2d 139, 145 (E.D.N.Y. 2000). In evaluating
procedural fairness, “[t]he [negotiation] process must be examined ‘in light of the experience of
counsel, the vigor with which the case was prosecuted, and the coercion or collusion that may
have marred the negotiations themselves.’” Id . at 145-46 (quoting Malchman v. Davis, 706 F.2d
426, 433 (2d Cir. 1983)). Factors relevant to the substantive fairness of a proposed settlement
include: (1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the
class to the settlement; (3) the stage of the proceedings and the amount of discovery completed;
(4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of
maintaining the class action through trial; (7) the ability of the defendant to withstand a greater
judgment; (8) the range of reasonableness of the settlement fund in light of the best possible
recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in
light of all the attendant risks of litigation. See Grinnell, 495 F.2d at 463.
1. Procedural Fairness
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /- 6B .. @"A$C5 D' &-/-/
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 21/512
16
The proposed settlement is the product of arm’s-length negotiations between
experienced and able counsel on all sides. The lawyers for the parties spent a great deal of time
in face-to-face, telephonic and written negotiations. Those negotiations were assisted by two
eminent mediators, Judge Infante and Professor Green, who have informed the Court that the
settlement negotiations were fair and conducted at arm’s length. My own participation in the
efforts to settle the case (along with Magistrate Judge Orenstein) confirmed those descriptions of
the negotiations, and nothing in the record suggests otherwise.
The objecting plaintiffs argue from the fact that a number of class members and
class representatives now oppose the settlement that the negotiations were not fair. I do not find
this argument persuasive. A number of objectors were deeply involved in the settlement
negotiations and mediation, and indeed accepted the mediators’ proposal that outlined the key
components of what became the Settlement Agreement. Wildfang Supp. Decl., ¶ 29, DE 5939-1.
Their current dissatisfaction with the terms of that agreement raises genuine issues of substantive
fairness, but it does nothing to undermine a record that demonstrates beyond any reasonable
doubt that the negotiations were adversarial and conducted at arm’s length by extremely capable
counsel.
Furthermore, there is no indication that the Settlement Agreement is the product
of collusion or that it confers upon the class representatives or any other subset of the class
“improper[] . . . preferential treatment.” In re NASDAQ Market-Makers Antitrust Litigation, 176
F.R.D. 99, 102 (S.D.N.Y. 1997). The objecting plaintiffs argue that because Visa and
MasterCard were able to negotiate jointly with Class Plaintiffs this may indicate collusion –
specifically in regard to the revisions to the no-surcharging rules. Again, I am not persuaded.
Mediators and the Court were involved in the settlement negotiations. The Second Circuit has
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /& 6B .. @"A$C5 D' &-/-0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 22/512
17
recognized that the involvement of a mediator in pre-certification settlement negotiations helps
to ensure that the proceedings are free of collusion and undue pressure. D’ Amato v. Deutsche
Bank , 236 F.3d 78, 85 (2d Cir. 2001). In addition, as discussed more fully below, I conclude that
the injunctive relief at the heart of the settlement inures equally to the benefit of every single
member of the merchant class. Accordingly, I conclude that the negotiation process fairly
protected the interests of the settlement class.
2. Substantive Fairness
a. The Complexity, Expense, and Likely Duration of the Litigation
The potential for this litigation to consume considerable additional time and
resources is great. The complexity of federal antitrust law is well known. See, e.g., Virgin Atl.
Airways Ltd. v. British Airways PLC , 257 F.3d 256, 263 (2d Cir. 2001) (noting the “factual
complexities of antitrust cases”); Weseley v. Spear, Leeds & Kellogg, 711 F.Supp. 713, 719
(E.D.N.Y. 1989) (antitrust class actions “are notoriously complex, protracted, and bitterly
fought”). Numerous motions remain pending before the Court, including motions to dismiss,
summary judgment motions, Daubert motions, and a motion to certify both a damages class
under Rule 23(b)(3) and an injunctive-relief class under Rule 23(b)(2). As to the class
certification motion, the losing party would likely seek interlocutory review by the Second
Circuit under Federal Rule of Civil Procedure 23(f) (review this Court would welcome and
encourage), delaying the case substantially.13 Class Counsel represent that a trial would take
several months, and I have no doubt they are correct. The losing parties would likely appeal any
adverse jury verdicts, thereby extending the duration of litigation. By contrast, the proposed
13 In the Wal-Mart case, twenty months elapsed between the order certifying the class and theSecond Circuit’s divided opinion affirming that decision. See In re Visa Check/Mastermoney Antitrust Litig. , 192F.R.D. 68 (E.D.N.Y. 2000), aff’d, In re Visa Check/MasterMoney Antitrust Litig. , 280 F.3d 124, 129 (2d Cir. 2001).
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ // 6B .. @"A$C5 D' &-/-E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 23/512
18
settlement allows class members to take advantage of rules changes now – those changes are
already in place – and further provides for significant monetary compensation in the near future.
b. The Reaction of the Class to the Settlement
Class Counsel report that almost 21 million long-form notices were mailed.
Taking into account duplicate mailings, and in light of various other factors that make the precise
size of the class impossible to determine, Class Counsel estimate that approximately 12 million
merchants comprise the class. Only .05% of them have objected to the settlement, and 90% of
the objections are on boilerplate forms downloaded from websites that disseminated false and
misleading information for the precise purpose of drumming up objections and opt-outs. It is
thus difficult to ascribe significant weight to the bulk of the objections.
On the other hand, because the roster of objectors includes some of the nation’s
largest retailers, the objectors in the aggregate represent 19% of the total transaction volume.
Many of the named plaintiffs in the case are objectors. Indeed, the motion for final approval has
caused a rift among large United States retailers, all of whom agree that the current interchange
fees are too high due to anticompetitive practices.
The divisions among the major merchants run deep, but they are also nuanced.
For example, of the top 60 merchants (measured by transaction volume) to opt out of the (b)(3)
damages class, about half (27) have not objected to the settlement. Thus, those merchants, which
include almost all the major airlines, will seek to obtain a greater damage award from Visa and
MasterCard, but they apparently see value in the (b)(2) relief. And the conduct of the airlines is
significant; in other markets that allow the surcharging permitted by the proposed settlement,
airlines were among the first to adopt the practice, which has had the effect of moving
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /0 6B .. @"A$C5 D' &-/-.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 24/512
19
transactions to cheaper payment alternatives. Thus, not all of the opt-outs evidence
dissatisfaction with the rules changes in the proposed (b)(2) settlement.
Similarly, although some merchants have argued that the ability to surcharge is
useless to smaller retailers, such as grocery stores and convenience stores, Class Counsel report
that 15 of the top 25 convenience stores have not objected to the settlement, and 5 of those
neither objected nor opted out.
In short, the reaction of the class to the proposed settlement is a mixed bag. To
paraphrase the argument by counsel for the Individual Plaintiffs at the fairness hearing,
intelligent and thoughtful merchants with a common complaint, a common goal, and many other
things in common part company on the degree to which the proposed settlement obtains for the
merchant class what can reasonably be expected to be obtained in this case.
Given the transaction volume represented by the objectors, it would be facile to
conclude that the reaction of the class strongly favors approval of the settlement simply because
substantially less than one-tenth of one percent of the merchants have objected. But see Alba
Conte & Herbert Newberg, Newberg on Class Actions § 11.41, at 108 (4th ed. 2002) (“[A]
certain number of objections are to be expected in a class action with an extensive notice
campaign and a potentially large number of class members. If only a small number of objections
are received, that fact can be viewed as indicative of the adequacy of the settlement.”); see also
D’ Amato v. Deutsche Bank , 236 F.3d 78, 86-87 (2d Cir. 2001) (holding that “[t]he District Court
properly concluded that this small number of objections [18 out of 27,883 notices] weighed in
favor of settlement”).
I also reject, however, the objectors’ argument that the transaction volume they
represent means that their objections must weigh heavily against approval. Rather, the reasons
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /E 6B .. @"A$C5 D' &-/-)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 25/512
20
advanced by the objectors require careful consideration in the ultimate determination of whether
the benefits offered by the settlement create a more attractive alternative to the merchant class
than incurring the risks of continued litigation. For reasons discussed throughout this
memorandum, I conclude that the objectors have failed adequately to acknowledge not only the
substantial impediments to succeeding on the merits in this case, but also the limitations on the
relief that would be available even if success were achieved. They have also underestimated the
significance of the Rule 23(b)(2) relief afforded by the settlement.
Accordingly, I conclude on balance that the reaction of the class favors approval
of the proposed settlement.
c.
The Stage of the Proceedings and the Amount of Discovery Completed
This factor relates to whether Class Plaintiffs had sufficient information on the
merits of the case to enter into a settlement agreement, Cinelli v. MCS Claim Services, Inc., 236
F.R.D. 118, 121 (E.D.N.Y. 2006), and whether the Court has sufficient information to evaluate
such a settlement, Wal-Mart , 396 F.3d 96, 118.
Before the parties executed the Settlement Agreement, fact discovery had been
completed, the parties had exchanged expert reports and deposed the experts, and all dispositive
motions had been briefed and argued. Class Counsel thus had a more than adequate basis for
assessing the claims. See Wal-Mart , 396 F.3d at 118 (where several years of discovery,
summary judgment and mediation occurred prior to settlement, plaintiffs had a “thorough
understanding of their case”). This factor weighs in favor of approval.
d. The Risks of Establishing Liability and Damages, and of Maintaining the
Class Action through the Trial
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /. 6B .. @"A$C5 D' &-/-F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 26/512
21
“In assessing the Settlement, the Court should balance the benefits afforded the
Class, including the immediacy and certainty of a recovery, against the continuing risks of
litigation.” In re Top Tankers, Inc. Sec. Litig., 06 CIV. 13761 (CM), 2008 WL 2944620, at *4
(S.D.N.Y. July 31, 2008) (emphasis in original). In this case, the risks of establishing liability
and damages at trial, and of maintaining the class throughout the trial (the fourth, fifth, and sixth
factors bearing on substantive fairness, respectively) all militate in favor of approval. Indeed,
perhaps the most significant defect in the objectors’ collective presentation to the Court is the
abject failure to acknowledge the perils of not settling the case. Instead, the objectors appear to
proceed on the assumption that a complete victory on the merits is a foregone conclusion.
A wide range of outstanding issues affects Class Plaintiffs’ ultimate likelihood of
establishing liability, including the legal characterization of the challenged practices of Visa and
MasterCard, and whether those practices on balance would be deemed anticompetitive under the
Rule of Reason.14 Class Plaintiffs allege that a number of core network practices, including the
setting of default interchange fees, the Honor-all-Cards rule, and various network rules that
discourage merchants from encouraging or requiring consumers to use less expensive payment
mechanisms, have resulted in excessively high interchange fees. But proving that those rules
14 The Rule of Reason is the “accepted standard for testing whether a practice restrains trade” inviolation of Section 1 of the Sherman Act. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877, 885(2007). As described by the Supreme Court,
Under this rule, the factfinder weighs all of the circumstances of a case indeciding whether a restrictive practice should be prohibited as imposing anunreasonable restraint on competition. Appropriate factors to take into accountinclude specific information about the relevant business and the restraint'shistory, nature, and effect. Whether the businesses involved have market poweris a further, significant consideration. In its design and function the ruledistinguishes between restraints with anticompetitive effect that are harmful tothe consumer and restraints stimulating competition that are in the consumer's
best interest.
Id . at 885-86 (internal quotation marks and citations omitted).
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /) 6B .. @"A$C5 D' &-/-1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 27/512
22
violate the antitrust laws is no mean feat. And even if that feat were accomplished, proving
damages is just as difficult.
i. Illinois Brick
First, there is a threshold problem of standing. Defendants rely on Illinois Brick
Co. v. Illinois, 431 U.S. 720, 736 (1977), in which the Supreme Court held that “indirect
purchasers” may not recover antitrust damages. The Court reasoned that permitting suits by
these third parties would essentially transform treble-damages antitrust actions into efforts to
apportion the recovery among all potential plaintiffs that might have absorbed part of the illegal
overcharge, from direct purchasers to middlemen to ultimate consumers. However appealing an
effort to allocate the overcharge might seem in theory, it would add a dimension of complexity to
actions for antitrust damages that would seriously undermine their effectiveness. Id. at 737.
Illinois Brick was an action brought by the State of Illinois and local government
entities alleging that concrete block manufacturers had engaged in a price-fixing conspiracy. Id .
at 726-27. The government entities had contracted with general contractors, who in turn hired
masonry subcontractors who bought the concrete blocks for installation in government projects.
Id . at 735. The Supreme Court held that only a direct purchaser of the concrete blocks (i.e., a
masonry subcontractor) was a party “injured in his business or property” by the alleged antitrust
violation and thus entitled to sue under Section 1 of the Sherman Act. Id . at 729, 735-37.
The defendants here contend that the merchants lack standing because they are
indirect purchasers – the acquiring banks being the direct purchasers – with respect to the
interchange fees they allege were fixed. The objectors argue that the fees are effectively paid by
the merchants directly. The concern about costly and inefficient apportionment proceedings that
fueled Illinois Brick dissipates where contractual arrangements permit ready determinations of
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /F 6B .. @"A$C5 D' &-/-(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 28/512
23
how an anticompetitive overcharge is allocated along the distribution chain. Illinois Brick itself
acknowledged a narrow exception to its rule for cases in which the overcharge is passed along
via a pre-existing cost-plus contract. 431 U.S. at 736. The plaintiffs here might successfully
appeal to such policy considerations; the issuing banks’ interchange fees are identifiable and
separate from the total package of fees (including other network fees and the acquiring banks’
merchant discount fees) that are passed along to the merchants.
On the other hand, the indirect purchaser doctrine is strictly applied, and the
exceptions are narrow.15 In the current posture of the case I need not resolve the issue, but I
think it clear that the indirect purchaser doctrine would be a source of significant uncertainty for
the plaintiffs if they sought to litigate their claims to a decision on the merits.
ii.
The Effect of the IPOs
As stated above, part of the “core conduct” the plaintiffs sought to address was
that “Visa and MasterCard member banks [. . .] effectively control the decisions of both
Networks” by setting rules and interchange fees for the networks to serve their collective
interest. First Consol. Am. Cl. Action Compl., ¶¶ 131-34, DE 317. However, after the filing of
that complaint, both Visa and MasterCard came out from under the control of their member
banks. The IPOs that accomplished that result strengthened the defendants’ argument that they
were no longer structural or “walking” conspiracies, and thus that the setting of interchange fees
cannot constitute horizontal price-fixing.
iii. Default Interchange Rules
15 A recent Ninth Circuit opinion, In re ATM Fee Antitrust Litigation, 686 F.3d 741 (9th Cir. 2012), presents a risk to the plaintiffs’ claims. In ATM Fee, the court granted summary judgment for the defendant on Illinois Brick grounds and rejected three exceptions to the Illinois Brick rule that plaintiffs here have relied on inopposition to the defendants’ motions for summary judgment: the co-conspirator exception; the ownership-and-control exception; and the exception for cases in which there is “no realistic possibility that direct purchasers willsue.” Id. at 750-58. Though plaintiffs made arguments at summary judgment to distinguish the ATM Fee case, theyface a risk that this Court or a higher one would not be persuaded.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /1 6B .. @"A$C5 D' &-/&-
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 29/512
24
The vast majority of the objectors oppose final approval of the Settlement
Agreement because it does not require Visa and MasterCard to eliminate their default
interchange rules. But even assuming default interchange fees operate to increase the acceptance
costs of Visa and MasterCard credit cards, that does not mean they violate the antitrust laws.
The objectors assume that default interchange is inherently illegal, but in reality it is a very
complicated issue.
Defendants contend that without default interchange, the costs of Visa and
MasterCard credit card transactions would have been higher because of the costs associated with
the negotiation of individual interchange agreements. They further argue that their networks’
default interchange rules are procompetitive because they enable issuers to improve card features
and rewards and reduce card finance charges and other costs. And default interchange benefits
merchants, the networks argue, by providing consumers greater purchasing incentives, thus
increasing consumer demand, which in turn increases merchant sales. Default interchange also
allows the banks that issue credit cards, rather than the merchants that accept them, to assume the
costs of fraud and non-payment.
The plaintiffs’ experts don’t dispute these assertions as much as they argue that
they have become obsolete because the Visa and MasterCard networks have “matured” over
time.16 However, given that these practices are at the core of the defendants’ successful business
model, it would be difficult for plaintiffs to show that these practices have become antitrust
violations by virtue of industry maturation.
16 See, e.g., Report of Dr. Alan S. Frankel at ¶ 216; Report of Dr. Christopher A. Vellturo at ¶ 39;
Report of Dr. Joseph Stiglitz at ¶¶ 9-10; see also Obj. Pls.’ Br. at 56 (“Visa and MasterCard have evolved intomature and dominant payment system, and the suggestion that issuing banks need interchange to issue credit cardson which most Americans have become dependent has been untenable for years, if not decades.”)
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ /( 6B .. @"A$C5 D' &-/&&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 30/512
25
No American court has ever held that Visa or MasterCard’s default interchange
rules violate the antitrust laws. In National Bancard Corporation, a district court concluded,
after a full trial on the mer its, that the default interchange rule was “of vital import” to the
payment-card system because it relieved issuing and acquiring banks of the need to negotiate
potentially thousands of bilateral agreements, and it also assured universal acceptance. Nat ’ l
Bancard Corp. v. Visa U.S.A., Inc., 596 F. Supp. 1231, 1259-61 (S.D. Fla. 1984). The Eleventh
Circuit then upheld Visa’s default interchange rule. Nat ’ l Bancard Corp. v. Visa U.S.A., Inc.,
779 F.2d 592, 605 (11th Cir. 1986) (“ NaBanco”). While it is true that the factual underpinning
of NaBanco – that issuing banks need interchange fees to have adequate incentives to participate
in networks – has eroded, a 2008 decision of the Ninth Circuit affirmed the dismissal of
challenges aimed at Visa and MasterCard’s default interchange rules. In Kendall v. Visa U.S.A.,
Inc., the court dismissed the “allegation that the Banks conspired to fix the interchange fee” on
the ground that “merely charging, adopting or following the fees set by a Consortium is
insufficient as a matter of law to constitute a violation of Section 1 of the Sherman Act.” 518
F.3d 1042, 1048 (9th Cir. 2008).
In short, the default interchange rules played an essential role in the construction
of the networks at issue here, and those networks provide substantial benefit to both merchants
and consumers. While the plaintiffs contend that the rules have outlived their procompetitive
effects now that the networks have matured, the setting of default interchange fees would almost
certainly be evaluated under the Rule of Reason, and the prospect that its anticompetitive effects
remain outweighed by its procompetitive ones is real. DOJ’s recent decision not to challenge the
default interchange rules despite the entreaties by Class Counsel that it do so further suggests
that the plaintiffs’ antitrust challenge to the rules could easily fail.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0- 6B .. @"A$C5 D' &-/&/
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 31/512
26
Professor Sykes has advised “that the expected returns to continued litigation are
highly uncertain, and that plaintiffs[] face a substantial probability of securing little or no relief at
the conclusion of trial.” Sykes Report at 3. Specifically, he states that “the plaintiffs face
considerable difficulty in establishing . . . that the core practices at issue in the case and left in
place by the proposed settlement – such as default interchange and [H]onor[-]all[-C]ards rules –
cause anticompetitive harm that outweighs their pro-competitive benefits . . . .” Id.
iv. The Honor-all-Cards Rules
A number of objectors argue that the settlement should not be approved because it
does not eliminate the networks’ Honor-all-Cards rules. As discussed earlier, the Honor-all-
Cards rules require merchants that accept Visa and/or MasterCard credit cards to accept all credit
cards issued on the same network, regardless of the issuer or the interchange fees associated with
the issuer ’s card.
The Honor-all-Cards rules are closely interrelated in both their history and
rationale with the default interchange rules. The assurances that a network ’s cards will be
accepted wherever the network ’s logo is displayed is critical to customers’ desire to carry such
cards and to merchants’ willingness to accept them.
A number of courts and economists have found the Honor-all-Cards rule and
similar rules to be procompetitive under the Rule of Reason. The Second Circuit upheld a
“blanket license” – a system analogous to the Honor-all-Cards rule – in Buffalo Broadcasting
Co. v. ASCAP, 744 F.2d 917 (2d Cir. 1984). See also Benjamin Klein et al., Competition in Two-
Sided Markets: The Antitrust Economics of Payment Card Interchange Fees, 73 A NTITRUST L.J.
571, 592-93 (2006) (“An honor -all-cards rule is the essence of a payment card system because it
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0& 6B .. @"A$C5 D' &-/&0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 32/512
27
assures each cardholder that his card will be accepted at all merchants that display the mark of
the card payment system.”). As one antitrust practitioner put it:
[The Honor-all-Cards rule] is a classic example of a restraint thatwas actually necessary for the functioning of the joint venture.When Visa and MasterCard were formed – think about this: Youhave thousands of banks across the country issuing these cards,thousands of banks acquiring merchants, millions of merchantsaccepting these cards – you need to have a seamless acceptanceexperience. We all take it for granted, but you needed to have arule that ensured to you, as a consumer, that when you proffer theVisa card, the merchant is going to take it. It’s not going to say,“I’ll take a Chase Visa card, but I don’t like Citibank, so I’m goingto turn that one down.”
Panel Discussion II: Consumer Issues at 5-6 (Statement of Jeffrey Shinder) (Fordham Univ. Sch.
of Law 2008), Marth Decl., Ex. C.
In light of the procompetitive features of the Honor-all-Cards rules, it is no sure
thing, to put it mildly, that Class Plaintiffs will be able to prove they have anticompetitive effects
to such an extent that they violate the antitrust laws. The proposed settlement preserves the
integrity of the rules that made (and continue to make) the networks successful. At the same
time, by further relaxing merchant restraints regarding pricing, it provides for transparency and
competition at the point of sale. Merchants who choose to use the power the proposed rules
changes give them will be able to exercise control over (and perhaps reduce) their costs from
accepting Visa and MasterCard credit cards.
v. Damages
Even if liability is established, Class Plaintiffs would still face the problems and
complexities inherent in proving damages to the jury. The plaintiffs’ theory of damages would
be hotly contested at trial. See, e.g., In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D.
465, 476 (S.D.N.Y. 1998) (“[T]he history of antitrust litigation is replete with cases in which
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0/ 6B .. @"A$C5 D' &-/&E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 33/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 34/512
29
Finally, Class Plaintiffs face the risk that the classes would not be certified or that
certification would be modified as the litigation continued. Class Plaintiffs’ motion to certify
Rule 23(b)(2) and (b)(3) classes is pending. A number of objecting class members voice the
hurdles that Class Plaintiffs would have to overcome to maintain class certification. Though
Class Plaintiffs have strong arguments that the classes should be certified, I note that the
certification of a similar class in the Wal-Mart case was affirmed only over a vigorous dissent,
see Wal-Mart , 280 F.3d at 147 (Jacobs, J., dissenting), and the legal landscape in which class
certification is litigated has deteriorated for plaintiffs in the intervening period. See, e.g.,
In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 40 (2d Cir. 2006) (overruling the more
lenient “some showing” standard of Caridad v. Metro – North Commuter Railroad , 191 F.3d 283,
293 (2d Cir. 1999)); see also Comcast Corp. v. Behrend , 133 S. Ct. 1426 (2013) (reversing class
certification in antitrust case based on an inadequate damages model). The risks associated with
the certification of classes weigh in favor of settlement.
e.
The Ability of Defendants to Withstand a Greater Judgment
Class Plaintiffs did not address this Grinnell factor, stating that the fact that the
defendants would be able to pay a substantial judgment does not counsel against approval of an
otherwise fair settlement. The objectors note that there is no risk that Visa and MasterCard and
the bank defendants would become insolvent. I agree that these defendants could withstand a
greater judgment, and thus this factor does not weigh in favor of approval.
f. The Range of Reasonableness of the Settlement Fund in Light of the Possible
Recovery and Attendant Risks of Litigation
The objectors argue that Class Plaintiffs should have insisted on a cash payment
closer to their expert’s damages projection. But the argument ignores the many factors that make
a jury award consistent with that projection – nearly a trillion dollars after trebling –
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0E 6B .. @"A$C5 D' &-/&)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 35/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 36/512
31
proposed settlement is grossly inadequate and should be
disapproved. In fact there is no reason, at least in theory, why asatisfactory settlement could not amount to a hundredth or even athousandth part of a single percent of the potential recovery.
495 F.2d at 455 & n.2.
I conclude that the Settlement Agreement is both procedurally and substantively
fair.
D. The Objections
As noted, there are numerous objections to the settlement. I discuss the principal
ones below.
1. Rule Reforms
a. The Elimination of the Networks’ No-Surcharge Rules
One of the principal accomplishments of the injunctive relief obtained by the
proposed settlement is the elimination, both at the network and product levels, of the rule
prohibiting surcharging by merchants. The proponents of the settlement tout this change as a
significant achievement; the objectors claim it is essentially worthless. The various facets of the
objectors’ position are addressed in detail below, but I find their position to be largely
unpersuasive. It is true that the value of surcharging to merchants is diminished by certain
factors, some of which are beyond the reach of this lawsuit. It is also true that many merchants,
for reasons sufficient to them, may choose not to avail themselves of the right to surcharge.
Nevertheless, I find that this rule change, which the Class Plaintiffs and the Individual Plaintiffs
fought very hard to obtain, is an indisputably procompetitive development that has the potential
to alter the very core of the problem this lawsuit was brought to challenge. At most, the
objectors’ arguments establish that the entire solution to that problem constitutes a mosaic, of
which the right to surcharge (like the other forms of relief in the proposed settlement) is but one
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0) 6B .. @"A$C5 D' &-/&1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 37/512
32
piece. But it is a central piece – a critical accomplishment – and the fact of the matter is that an
entire solution to the problem would be unattainable in this action even if it were litigated to its
final conclusion and (against considerable odds) plaintiffs prevailed on all of their claims.
The Class Plaintiffs, the Individual Plaintiffs, and the objectors agree that the
combined effect of the various rules challenged in this lawsuit is supracompetititve interchange
fees on Visa and MasterCard credit cards. The rules work together to prevent inter-brand
competition between each network ’s cards at the point of sale. If a customer presents a Visa card
for payment, the Honor-all-Cards rule requires the merchant to accept it (unless the merchant
chooses not to accept any Visa credit cards, an unlikely option given their ubiquity). The no-
surcharge rule further prohibits the merchant from steering the customer to a competing
MasterCard credit card with a lower interchange rate by surcharging the higher-priced Visa card.
The allegedly supracompetitive interchange rate on the Visa card is hidden by the combined
effects of the rules and the merchant is forced to pay it.
The same is true with respect to different kinds of cards within each network.
Premium cards carry higher interchange fees. Merchants who want to steer customers away
from a higher-interchange MasterCard credit card to a different MasterCard card with a lower
rate by imposing a surcharge on the former are prohibited from doing so.
The proposed elimination of the no-surcharge rules finally would allow merchants
to make transparent and avoidable what has been opaque and inevitable. Customers can be told
what it costs the merchant to accept a particular card. Merchants can use their ability to disfavor
one network at the point of sale by surcharging. That power will incentivize both networks to
moderate or lower their interchange fees to avoid being disfavored. The customer can then
choose between using the premium card that is subject to a surcharge (she may value the rewards
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0F 6B .. @"A$C5 D' &-/&(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 38/512
33
of the high-cost card more than a lower purchase price) or being steered to a lower-cost card and
paying less for the transaction.
The ability to surcharge allows merchants to recoup the higher acceptance costs of
the expensive cards. It allows them to steer customers to less costly cards or to other payment
mechanisms, decreasing their card-acceptance costs. It allows market forces to operate on the
previously invisible (to customers) array of interchange fees, and will exert downward pressure
on those fees by injecting a form of competition the current rules have prohibited.
The objectors make a number of arguments in support of their overall claim that
the proposed rules changes that will allow surcharging is essentially worthless. Some are more
persuasive than others, but they do not in my view alter the fact that the rule change would be a
significant achievement for the class.
First, objectors contend that surcharging is prohibited by law in ten states. Thus,
merchants who do business only in those states17 contend that this aspect of the settlement will
be useless to them. I disagree for several reasons. One is that interchange fees are set on a
nationwide basis. Thus, surcharging (or the threat of surcharging) by merchants in the states
where it is permitted may well inure to the benefit of merchants in those ten states. Also, there is
reason to believe that at least some state laws are enforced in a manner that prohibits surcharging
only when the merchant fails to sufficiently disclose the increased prices for credit card use.
17 Certain national or multistate merchant objectors argue that they will not be able to surchargeanywhere if they have even one store located in a state that prohibits surcharging. There is no support for thiscontention. The Settlement Agreement does not contain any such prohibition and the Class Notice, whichdefendants consented to, states the opposite:
. . . the fact that a merchant’s ability to surcharge may be restricted under thelaws of one or more states is not intended to limit the merchant ’s ability underthe settlement to surcharge Visa or MasterCard credit cards where permitted bystate law.
Notice at 8.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 01 6B .. @"A$C5 D' &-//-
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 39/512
34
More importantly, things change, and there is reason to believe that these state-
law impediments to a full deployment of the proposed relief will eventually be among them. No-
surcharge laws are not only anti-consumer, they are arguably irrational, and indeed one of them –
New York ’s – has bitten the dust in the brief interval since the fairness hearing. Expressions
Hair Design v. Schneiderman, 13 CIV. 3775 JSR, --- F.Supp.2d ---, 2013 WL 5477607
(S.D.N.Y. Oct. 3, 2013).
The plaintiffs in Expressions Hair Design were five New York retailers and their
principals. They challenged New York General Business Law § 518, which prohibits a merchant
from imposing a surcharge when a consumer elects to pay with a credit card.18 As Judge Rakoff
observed, the proposed settlement’s elimination of the no-surcharge rule, which has already
become effective, gave the “previously redundant” state no-surcharge law “r enewed
importance.” Id. at *4. The retailer plaintiffs wanted to surcharge credit card transactions
because of the two-to-three percent cost per transaction. “They [did] not want to frame this price
difference as a cash discount” because it wasn’t, and calling it a discount would make the
advertised prices seem higher than they really were “without making it transparent that the
higher price would be due solely to credit card transaction costs -- precisely the information
[they] wish to convey to [their] consumers.” Id. at *5 (internal quotation marks omitted; some
alterations in original). Inspired by the rules change already in effect because of the proposed
settlement, the plaintiff merchants wanted to post a sign telling customers of a 3% surcharge due
18 The section reads in full as follows:
No seller in any sales transaction may impose a surcharge on a holder who electsto use a credit card in lieu of payment by cash, check, or similar means.
Any seller who violates the provisions of this section shall be guilty of amisdemeanor punishable by a fine not to exceed five hundred dollars or a termof imprisonment up to one year, or both.
N.Y. Gen. Bus. Law § 518.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ 0( 6B .. @"A$C5 D' &-//&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 40/512
35
to high interchange fees. However, fearful of prosecution under § 518, they sought a preliminary
injunction precluding enforcement of § 518 against them on First Amendment and vagueness
grounds.
In granting that relief, Judge Rakoff observed that “ Alice in Wonderland has
nothing on” New York’s no-surcharging law. In rejecting the state’s attempt to defend the statute
as pro-consumer, he wrote that
the statute actually perpetuates consumer confusion by preventingsellers from using the most effective means at their disposal toeducate consumers about the true costs of credit-card usage. It
would be perverse to conclude that a statute that keeps consumersin the dark about avoidable additional costs somehow “directlyadvances” the goal of preventing consumer deception.”
Expressions Hair Design, 2013 WL 5477607 at *11.
Citing the “undeniable” public interest in full access to the information about the
costs of credit card acceptance, the “critical” nature of that information to the millions of
payment decisions made each day, and the fact that no-surcharge rules have the effect of
artificially subsidizing credit at the expense of other payment methods, Judge Rakoff
preliminarily enjoined “a surcharge ban indistinguishable from the bans that Visa and
MasterCard recently dropped from their retailer contracts as part of [the instant proposed]
antitrust settlement.” Id . at *15, *14.
Nine other such state laws remain. The validity of those laws is not before me,
but I have no reason to doubt Judge Rakoff ’s assessment that they “were enacted in the name of
consumer protection at the behest of the credit-card industry over the objection of consumer
advocates.” Id . at *14. Will those laws diminish, at least in the near term, the efficacy of the
proposed relief here? Of course. But Class Counsel and counsel for the Individual Plaintiffs
have good reason to believe that further efforts, whether they take place in courts or legislatures,
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E- 6B .. @"A$C5 D' &-///
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 41/512
36
will successfully address that problem. Those state laws, properly understood, hurt the very
consumers they were ostensibly enacted to protect by propping up high credit card acceptance
costs. They aid and abet a regime in which the poorest consumers subsidize the awards
conferred upon premium cardholders because merchants are prohibited from disfavoring those
premium cards through surcharging.
The objectors also contend that the elimination of the no-surcharge rule is
rendered useless by what all parties have termed the “level-playing-field” provision, which
conditions a merchant’s ability to surcharge a Visa or MasterCard credit card on a requirement
that it also surcharge other payment products of equal or greater cost of acceptance.19 Since
many merchants accept American Express, which carries an even higher cost acceptance, and the
American Express rules prohibit surcharging, most merchants will, as a practical matter, be
precluded from surcharging Visa and MasterCard products.
I note preliminarily that the mere fact that merchants may choose not to avail
themselves of the proposed relief (i.e., by continuing to accept American Express) does not
compel the conclusion that the indisputably procompetitive rules changes are not a valuable
achievement. But putting that aside, this objection, like many of the objectors’ claims, places in
19 Visa’s “level-playing-field” provisions reads as follows:
If a merchant’s ability to surcharge any Competitive Credit Card Brand that themerchant accepts in a channel of commerce (either face-to-face or not face-to-face) is limited in any manner by that Competitive Credit Card Brand, other than
by prohibiting a surcharge greater than the Competitive Credit Card Brand’sCost of Acceptance, then the merchant may surcharge Visa Credit CardTransactions, consistent with the other terms of this Paragraph 42(a), only oneither the same conditions on which the merchant would be allowed to surchargetransactions of that Competitive Credit Card Brand in the same channel ofcommerce, or on the terms on which the merchant actually does surchargetransactions of that Competitive Credit Card Brand in the same channel ofcommerce, after accounting for any discounts or rebates offered at the point ofsale;
SA ¶ 42(a)(iv). MasterCard’s, id . ¶ 55(a)(iv), is substantially identical.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E& 6B .. @"A$C5 D' &-//0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 42/512
37
sharp relief the limited extent to which the problems merchants complain about in this industry
can be addressed in a single lawsuit. Just as anti-consumer state laws may, at least in the short
term, undermine the relief proposed here, so may the merchant restraints imposed by American
Express. The mere fact that American Express, through rules similar to those challenged here,
may continue to engage in what the objectors would describe as anticompetitive conduct is
hardly an indictment of the proposed settlement before me. The merchants who support the
proposed settlement are fully justified in the view that “the American Express problem” is not
only a problem that must be (and in fact is being) addressed elsewhere, but that isolating
American Express as the only remaining major network insulated from price competition will
assist in the effort to “fix” it. In any event, the problem posed by American Express’s merchant
restraints does not alter the fact that the essence of the injunctive relief obtained by the proposed
settlement will permit procompetitive actions by merchants at the point of sale, and that those
actions have the potential to ameliorate the precise anticompetitive effect – supracompetitive
interchange fees – that these lawsuits were brought to challenge. Tellingly, the objectors, for all
their reliance on the “American Express problem” in opposing the proposed settlement, have no
solution for that problem. That is no doubt because there could not be one in this case.
The objecting merchants’ complaints regarding the proposed settlement’s
requirement that merchants disclose surcharges at the point of entry, at the point of sale, and on
the sales or transaction receipt are without merit. Such disclosure requirements promote pricing
transparency by informing consumers of the charges they will face if they use a particular form
of payment. It will no longer be a hidden tax imposed on consumers. Merchants can now
educate them about of the costs of their different payment products.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E/ 6B .. @"A$C5 D' &-//E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 43/512
38
Lastly, the objectors’ concerns regarding merchants’ ability to understand and
implement surcharging are misplaced. Essentially, the new surcharge system has four elements:
Merchants may surcharge the full average discount fee incurred (as determined by the prior month or last 12 months);
Merchants may surcharge brand-wide (e.g., all Visa or MasterCard credit cards), or theyemploy a more nuanced strategy and impose surcharges on one or more product groups(e.g., Visa Signature cards or MasterCard World Elite cards, which carry higher fees formany merchants);
Merchants must disclose to consumers that the surcharge does not exceed the merchant’scost of acceptance, and disclose the amount of the surcharge both before it is incurred andon a receipt; and
If another more expensive network brand that the merchant accepts continues to restrictsurcharging, the merchant may not surcharge Visa and MasterCard without alsosurcharging transactions on that competitor network. This is the “level-playing-field”
provision.
It is true that many merchants are unsophisticated, but I am confident that, with the assistance of
Class Counsel, they will be able to understand their newfound right to surcharge. Pls.’ Reply
Mem. in Supp. Mot. Final Approval 34, DE 5939.
b.
The Buying Group Provision
The objectors argue that the group-buying and all-outlets provisions will not
provide them a benefit because they will not take advantage of them, or that the relief is illusory
because Visa and MasterCard rules did not previously prohibit merchants from engaging in joint
negotiations. Though there were no rules that prohibited buying groups, it was the practice of
both Visa and MasterCard to refuse to negotiate over interchange fees with merchant buying
groups or other groups of merchants. Allowing groups of merchants to join together to negotiate
with Visa and MasterCard empowers merchants in their dealings with the networks by allowing
them to bargain collectively.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E0 6B .. @"A$C5 D' &-//.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 44/512
39
In sum, there is no history of negotiations between Visa and buying groups, or
between MasterCard and buying groups. Now there is an affirmative obligation on the part of
each network to negotiate in “good faith” with such groups. This feature of the proposed
settlement constitutes a meaningful reform that is favorable to merchants.
2. The Releases
The Settlement Agreement includes a release for each of the two classes. Set
forth in paragraphs 33 and 68 of the Settlement Agreement, respectively, the so-called (b)(3) and
(b)(2) releases have drawn numerous objections. The objectors assert that, among other
problems, the releases cover a “virtually limitless range of claims,” providing Visa and
MasterCard with “immunity” from all future merchant claims, including antitrust claims, and
therefore should be deemed void as against public policy. Obj. Plaintiff ’s Br. at 3-4, DE 1678.
Others have grounded similar objections in fundamental notions of due process. However,
because the releases cover only the claims that may properly be extinguished by the settlement of
a class action, I reject these objections.
Both releases cover claims that are or could have been alleged in this case. Such
releases are permissible, see Wal-Mart , 396 F.3d at 106-13, and indeed the ability to include
them in class action settlements is essential to providing defendants the litigation peace they
legitimately expect in return for the settlement of claims. The full array of future claims
embraced by such a release necessarily involves a measure of uncertainty, but the Second Circuit
has clearly established the rule of decision: “The law is well established in this Circuit and
others that class action releases may include claims not presented and even those which could
not have been presented as long as the released conduct arises out of the ‘identical factual
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ EE 6B .. @"A$C5 D' &-//)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 45/512
40
predicate as the settled conduct.’” Id. at 107 (quoting TBK Partners, Ltd. v. W. Union Corp., 675
F.2d 456, 460 (2d Cir. 1982)).
The most vehement of the objections to the release share two related flaws. First,
they assume the unlawfulness of both the default interchange and Honor-all-Cards rules, and
object to the release of future challenges to those rules. However, as discussed above, the
anticompetitive character of these rules is far from clear, and the Class Plaintiffs would have a
difficult time proving it here. Armed with both the Class Plaintiffs’ evidence and legal theories,
the Department of Justice chose not to challenge either rule when it investigated and proceeded
against Visa and MasterCard. In any event, because the illegality of those rules is at a minimum
an unsettled question, future challenges to them could properly be released even in the absence
of the alterations to the networks’ practices discussed in the following paragraph. See, e.g.,
Robertson v. Nat ’ l Basketball Ass’ n, 556 F.2d 682, 686 (2d Cir. 1977).
Second, the objections fail to take sufficient account of the alterations
accomplished directly by the proposed settlement and indirectly during the course of this
litigation. As discussed above, in a post-settlement world, (1) merchants will be allowed to
surcharge (subject to the limitations discussed above) Visa and MasterCard credit cards at both
the brand and product levels; (2) merchants will be able to discount credit and debit transactions;
(3) the reforms achieved by the Durbin Amendment and of the Department of Justice lawsuit
will be preserved by agreement; and (4) Visa and MasterCard will be obligated to negotiate
interchange fees in good faith with merchant groups. Even if the objectors are correct that
default interchange and the Honor-all-Cards rule produce anticompetitive effects, the rules
reforms achieved by the settlement have the potential to meaningfully blunt those effects. In
exchange for a new, going-forward rules structure, the defendants are entitled to bargain for and
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E. 6B .. @"A$C5 D' &-//F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 46/512
41
receive releases of claims that are or could have been alleged based on the identical factual
predicate of the claims in this case.
That is all these releases accomplish. They do not release the defendants from
liability for claims based on new rules or new conduct or a reversion to the pre-settlement rules.
They appropriately limit future damages claims based on the pre-settlement conduct of the
networks.
There is no due process right to opt out of the (b)(2) class, as some objectors
argue. Rule 23 contemplates binding settlements with no opt-out rights where the injunctive
relief achieved by the settlement is appropriate for the class as a whole. The (b)(2) settlement
here is limited to going-forward injunctive relief that changes the structure of the networks’
practices. If merchants could opt out of the (b)(2) class, they would reap the benefits of that
relief anyway, as the injunctive relief is generally applicable to all merchants. To allow them to
opt out and pursue their own rules-based injunctive relief would eliminate the incentive to settle
that Rule 23(b)(2) was designed in part to create. “The key to the (b)(2) class is ‘the indivisible
nature of the injunctive or declaratory remedy warranted – the notion that the conduct is such
that it can be enjoined or declared unlawful only as to all of the class members or as to none of
them.’” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2557 (2011) (quoting Richard
Nagareda, Class Certification in the Age of Aggregate Proof , 84 N.Y.U. L.R EV. 97, at 132
(2009)). That is precisely the case with respect to the claims in this case that seek injunctive
relief from the bundle of network rules that result in – according to the plaintiffs’ allegations –
supracompetitive interchange fees in violation of the antitrust laws. Accordingly, the aspect of
the settlement that resolves those claims by neutralizing that bundle of rules is the proper subject
of a (b)(2) class from which no opt-outs are permitted.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E) 6B .. @"A$C5 D' &-//1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 47/512
42
That the release extends to future challenges to the reformulated rules or
“substantially similar” ones does not create the giant loophole multiple objectors fear. If the
networks make non-substantive changes to the post-release rules and related conduct, there will
be no reason for the release not to operate. Other changes are not subject to the release. Is there
room for litigation over whether future rules are “substantially similar?” Of course, but that is no
reason to prohibit the networks from making any rules changes, no matter how unrelated they
may be to the claims and conduct at issue here, on pain of losing the protection of an otherwise
lawful release.
I need not and cannot catalog here all the claims that fall within or without the
release. It suffices to say that the releases do not cover new, future anticompetitive conduct and
rules.
One of the many indicia of how ubiquitous the Visa and MasterCard credit
products have become is the fact that American Express, Discover and First Data Corporation
(which provides services, including equipment, to merchants), and Cardtronics (an ATM
operator) are also members of the merchant class. They object to the release of claims they may
have against Visa and MasterCard, which are among their competitors. These objectors seek to
make something of nothing; it is sufficiently clear from both the text and context of the releases
that these class members are releasing only claims that merchants have alleged or could have
alleged in this case in their capacity as merchants. The release does not bar claims that a class
member may have in its capacity as a payment-card competitor, an ATM operator, or any other
capacity other than as a merchant that accepts Visa and MasterCard credit cards.
3.
The Health Insurers’ Objections
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ EF 6B .. @"A$C5 D' &-//(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 48/512
43
Two health insurance objectors, The Wellpoint, Inc. and the Blue Cross Blue
Shield Entities object to the settlement on the basis that certain provisions of the Patient
Protection and Affordable Care Act of 2010 (“Affordable Care Act”) could cause the settlement
to affect them differently than other merchants. See Wellpoint Obj. ¶¶ 2-11, DE 2493-2; Blue
Cross Obj. 9-14, DE 2643. The provision that causes the health insurance objectors concern is
the medical loss ratio regulation. Specifically, they argue that a provision of the Affordable Care
Act that limits the amounts insurers can spend on non-health related activities could result in an
increased risk of having to pay certain rebates to customers. See Wellpoint Obj. ¶3; Blue Cross
Obj. 9-14. The regulation “provides that for policies purchased by individuals as opposed to by
employers or groups, at least 80 percent of premium revenues have to be spent on either clinical
services or healthcare quality improvement activities.” Tr. 160:6-10. If health insurers do not
meet this 80 percent payment, they are subject to a penalty (i.e., rebate payments). Payment card
fees, such as interchange fees, are neither clinical care nor healthcare quality improvement
activities. Therefore, the argument goes, paying those fees will count against health insurers as
they strive to comply with the 80 percent threshold requirement.
I agree with these objectors that no one thought of their unique concern in
formulating the settlement, but that is no reason not to approve it. The notion that interchange
fees may cause health insurers to cross to the wrong side of that 80% threshold is entirely
speculative.
4. Claims by States Acting in their Sovereign Capacity
State Attorneys General object that because state governmental entities may
accept Visa or MasterCard cards for payment, the releases might bar “claims that are uniquely
and exclusively claims belonging to the States as sovereigns,” specifically “state law
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E1 6B .. @"A$C5 D' &-/0-
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 49/512
44
enforcement or parens patriae claims,” including parens patriae claims for fines, civil, or other
penalties. State Obj. at 2, DE 2623.
As discussed above, the releases extend only to claims that are alleged or which
could have been alleged in this case. Thus, the settlement resolves claims made by persons,
businesses, and other entities that “arise from or relate to their capacity as merchants that accept
Visa-Branded Cards and/or MasterCard-Branded Cards in the United States . . . .” Revised Class
Notice at F2-12, DE 1740-2. Therefore, claims brought by States to vindicate interests in their
sovereign capacity are not barred by the release. Pls.’ Reply Mem. in Supp. Mot. Final Approval
84; Defs.’ Br. at 34.
Defendants have noted that while the releases do not extend to parens patriae
claims that States assert in their sovereign capacity, the releases bar claims that States may assert
in a representative capacity on behalf of state resident that are members of the Rule 23(b)(2) or
(b)(3) settlement class. States may assert parens patriae claims in a representative capacity for
injuries to the interests of state residents when specifically authorized by a federal or state
statute. See e.g., 15 U.S.C. § 15c; Cal. Bus. Prof. Code § 16760; 740 Ill. Comp. Stat. 10/7. In
such an action, the State’s claim is derivative of the state resident’s claim, and may be barred
where the resident’s claim is barred.
To resolve the concerns raised by state attorneys general, taking into
consideration the distinction between a state acting in its sovereign or quasi-sovereign capacity
and a state acting in its representative capacity, defendants have proposed the following
provision be added:
The Definitive Class Settlement Agreement and this ClassSettlement Order and Final Judgment do not bar an investigation oraction, whether denominated as parens patriae, law enforcement,or regulatory, by a state, quasi-state, or local governmental entity
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ E( 6B .. @"A$C5 D' &-/0&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 50/512
45
to vindicate sovereign or quasi-sovereign interests. The Definitive
Class Settlement Agreement and this Class Settlement Order andFinal Judgment bar a claim brought by a state, quasi-state, or localgovernmental entity’s proprietary interest (a) as a member of theRule 23(b)(2) Settlement Class, or (b) as a member of the Rule23(b)(3) Settlement Class that has received or is entitled to receivea financial recovery in this action. The Definitive Class SettlementAgreement and this Class Settlement Order and Final Judgmentalso bar a claim, whether denominated as seeking damages,restitution unjust enrichment, or other monetary relief, brought bya state, quasi-state, or local governmental entity for monetary harmsustained by natural persons, businesses, or other non-state, non-quasi-state, and non-local governmental entities or private partieswho themselves (a) are members of the Rule 23(b)(2) SettlementClass or (b) are members of the Rule 23(b)(3) Settlement Class.
Sept. 9, 2013 Letter from Defs. at 2 (August 21 Proviso), DE 5995.
To clarify the releases as they bear on states acting in their sovereign capacities, I
adopt that language, which shall be incorporated into the final settlement order and judgment.
5. Discover’ s Objection
Discover argues that the level-playing-field provision that cabins merchants’
ability to surcharge affects its network in unfair and competitively harmful ways. Specifically,
Discover requests that the Court reject the settlement because its “Equal Treatment Rule” will be
harmed by that provision. However, to the extent that Discover cards are lower-priced than Visa
and MasterCard products, Discover will not be affected by the level-playing-field provision. Its
claim that in “some situations” its Equal Treatment Rule may preclude surcharges against Visa
and MasterCard is not a reason to reject the Settlement Agreement.
6. The Notice to Class
Certain objectors argue that the notice sent to the class contains “false statements’
that render it inadequate. These false statements include: (1) attributing certain rule changes,
“namely the no-discounting and $10-minimum rules for credit transactions,” to the proposed
settlement, when the changes predated the settlement; (2) the notice stated that the release covers
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ .- 6B .. @"A$C5 D' &-/0/
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 51/512
46
“other fees” and “other rules,” when it covers every merchant fee and all of Visa’s and
MasterCard’s rules and unwritten rules and practices; and (3) the notice fails to inform class
members that “the surcharging relief will be unavailable to the majority of merchants and
transactions . . . .” Obj. Pls.’ Br at 63.
The notice here meets the requirements of due process and notice standards. It
described the litigation, summarized the settlement’s terms, quoted the releases verbatim,
described the request for attorneys’ fees, expenses, and incentive awards for Class Plaintiffs, and
explained the deadline and procedure for filing objections to the settlement as well as opting out
of the case settlement class. The objectors’ complaints provide no reason to conclude that the
purposes and requirements of a notice to a class were not met here.
There is no showing that the notice did not meet this standard.
7.
Cohesiveness of the Rule 23(b)(2) Class; Adequacy of Class Plaintiffs
Some of the objectors contend that the Rule (b)(2) class is not cohesive. I
disagree.
A Rule 23(b)(2) class is warranted when “the party opposing the class has acted
or refused to act on grounds that apply generally to the class, so that final injunctive relief . . . is
appropriate respecting the class as a whole.” Fed. R. Civ. P. 23(b)(2). The network rules
regimes that gave rise to this case applied generally to every merchant accepting Visa or
MasterCard credit cards, and the injunctive relief in the proposed settlement does as well.
Specifically, all merchants have the same interest in being able to inform cardholders at the point
of sale of the acceptance costs of their credit cards and to either steer them to lower-cost
alternatives or recoup the cost of acceptance.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ .& 6B .. @"A$C5 D' &-/00
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 52/512
47
In fact, by focusing the settlement efforts on the merchant restraints, as opposed
to, for example, default interchange (which many objectors assert should have been the focus),
Class Plaintiffs have enhanced the cohesion of the class. Even if judicial regulation of default
interchange fees were within the reach of the plaintiffs in this action, any such regulation would
affect the class unequally. As mentioned above, default interchange operates only in the absence
of bilateral agreement, and some of the very large merchants have sufficient transaction volume
that they can actually negotiate for their own, lower interchange structures. By ending a specific
merchant restraint that prohibits point-of-sale, competition-enhancing actions, every single
merchant that elects to avail itself of the new rules changes will have received the same benefit.
And because that benefit redesigns the relationship between the each merchant and the networks
in precisely the same manner, the structural relief is generally applicable to the class in the
manner required by Rule 23(b)(2). The fact that some merchants may elect not to avail
themselves of the rule, or are prohibited by factors beyond the scope of this lawsuit from
surcharging, does not undermine my conclusion that the class is sufficiently cohesive to warrant
Rule 23(b)(2) relief in this case.
In addition, the Class Plaintiffs adequately represent both the (b)(2) and the (b)(3)
settlement classes. As discussed above, the interests of the Class Plaintiffs and the rest of the
(b)(2) class are not antagonistic. In addition, the Class Plaintiffs have been involved in this
action from the outset and have fulfilled all of the obligations associated with being class
representatives. They have participated in discovery, in mediation, in court sessions, in the
evaluation of the mediators’ proposals, and in the formulation of the Settlement Agreement.20
20 The other requirements for certification of settlement classes under Rule 23 have not been the
principal focus of objection, and they are easily met here. Both the (b)(2) and (b)(3) classes contain several millionmerchants, satisfying numerosity. Commonality is satisfied because, for both classes, key questions of law and fact
– the application of the antitrust laws to uniform Visa and MasterCard policies – are common. Common answers to
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ ./ 6B .. @"A$C5 D' &-/0E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 53/512
48
E.
The Plan of Allocation
“As a general rule, the adequacy of an allocation plan turns on . . . whether the
proposed apportionment is fair and reasonable” under the particular circumstances of the case.
In re PaineWebber Ltd. Partnerships Litig., 171 F.R.D. 104, 133 (S.D.N.Y. 1997), aff ’ d , 117
F.3d 721 (2d Cir. 1997). “An allocation formula need only have a reasonable, rational basis,
particularly if recommended by experienced and competent class counsel.” In re Am. Bank Note
Holographics, Inc., 127 F. Supp. 2d 418, 429-30 (S.D.N.Y. 2001) (internal quotation marks
omitted). Whether the allocation plan is equitable is “squarely within the discretion of the
those questions are inevitable, see Dukes, 131 S.Ct. at 2551, since the questions focus on the application of law tothe defendants’ conduct (which was essentially the same toward all class members), not on the individual conduct ofmany different plaintiffs. For similar reasons, typicality is satisfied, since “the named Plaintiffs’ claims are for thesame type of injury under the same legal theory as the rest of the class.” Reid v. SuperShuttle, International, Inc.,2012 WL 3288816, at *4 (E.D.N.Y. Aug. 10, 2012). Adequacy, as discussed above, is also met here.
Each class also satisfies its respective subsection of Rule 23(b).Because all the members of the injunctive relief class were subject to the same rules, and because the relief
afforded by that class is a change to those rules, the class satisfies the requirement that defendants have “acted orrefused to act on grounds that apply generally to the class, so that final injunctive relief . . . is appropriate respectingthe class as a whole.” Fed. R. Civ. P. 23(b)(2). As discussed above, the rules refor ms created by the settlement – in
particular, the ability for merchants to surcharge – affect all (b)(2) class members equally.The damages class satisfies Rule 23(b)(3)’s predominance and superiority requirements. As discussed
under Rule 23(a), the key issues for the damages class relate to defendants’ conduct, and those issues vastlyoutweigh – that is, predominate over – any relevant legal or factual determinations that vary among the plaintiffs. Itis true that individual differences exist in the class – for example, the ability of a few large merchants to negotiate
their own interchange fees. But in the main, differences among the (b)(3) class members go to the conceivablemonetary recovery, not liability, and two aspects of the settlement mitigate concerns about individual damagesissues. First, those (b)(3) class members who believe they may do better on their own are permitted to opt out, andmany have done so. As discussed above, many of the opt-outs are very large, sophisticated businesses, and they arecompetent to protect their own interests. The monetary settlement here does not harm them (and, to the extent itestablishes a precedent, probably helps them in their individual suits or negotiations). Second, for those classmembers who have not opted out, the fact of the settlement is “relevant,” see Amchem Products, Inc. v. Windsor ,521 U.S. 591, 619 (1997), since it creates a single method and procedure for recovering monetary claims that mightotherwise be complex and individualized. And of course, it is well-established that “[c]ommon issues may
predominate when liability can be determined on a class-wide basis, even when there are some individualizeddamage issues.” In re Visa Check/MasterMoney Antitrust Litig. , 280 F.3d at 139.
The settlement’s relevance is obvious for the superiority determination as well. This settlement is not perfect; as I noted above, one lawsuit cannot possibly address every party’s concerns about interchange fees and thenetworks’ rules. But for the purpose of remedying the plaintiffs’ damages claims flowing from the defendants’alleged antitrust violations, it’s hard to imagine a better alternative than a single, uniform claims procedure. Absentcertification, there would be no settlement, which would likely mean many fragmented lawsuits; that would riskinconsistent results and place a huge litigation burden on the defendants. It is also likely that, for the many smallermerchants that constitute the overwhelming majority of the class, the realistic alternative to certification is no caseat all, given the costs, risks, and range of recovery available in litigation. Cf. Carnegie v. Household Int’l, Inc., 376F.3d 656, 661 (7th Cir. 2004). In sum, common issues predominate and class treatment is superior because (b)(3)class is “sufficiently cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 623.
Thus, both classes meet the requirements of Rule 23, and certification is proper.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ .0 6B .. @"A$C5 D' &-/0.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 54/512
49
district court.” In re PaineWebber, 171 F.R.D. at 132. I find that the plan is both fair and
reasonable, and thus I approve it.
The plan works as follows. The Class Administrator will distribute the $6.05
billion Cash Fund to Authorized Cash Claimants, on a pro rata basis, depending on the amount of
actual or estimated interchange fees they paid during the class period. (Plan of Administration
and Distribution at SA Appendix I.) Payments to Authorized Interchange Claimants from the
estimated $1.2 billion Default Interchange Payments Fund will be made pro rata, and will be
based on one-tenth of one percent of the claimant’s Visa and MasterCard transactions during the
eight-month period as compared to total of all claim values for that fund. The amount of
interchange fees paid by each authorized cash claimant will be determined or estimated from
data obtained by Class Counsel from Visa, MasterCard, the bank defendants, non-defendant
acquiring banks and independent service organizations subpoenaed by Class Counsel, and from
the Authorized Cash Claimants themselves. ( Id. at I-2).
There have been no substantive objections to the allocation plan except for a
speculative objection from Ace Hardware that I find to be without merit.
I conclude that this plan of allocation, which is recommended by experienced and
competent counsel, is fair, reasonable, and adequate. This conclusion is buttressed by the
relatively small number of opt-outs and absence of objections from class members. Accordingly,
I approve as final the allocation plan.
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ .E 6B .. @"A$C5 D' &-/0)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 55/512
50
CONCLUSION
For the reasons stated above, the proposed settlement is approved with the minor
modification set forth above. A status conference regarding the next steps in the case shall be
held on January 10, 2014 at 3:00 P.M.
So ordered.
John Gleeson, U.S.D.J.
Dated: December 13, 2013Brooklyn, New York
!"#$ &'()*+,*-./01*23*24 56+78$9: &)./ ;<=$> &/?&0?&0 @"A$ .. 6B .. @"A$C5 D' &-/0F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 56/512
IN THE
United States Court of AppealsFOR THE SECOND CIRCUIT
I N R E PAYMENT CARD I NTER CHANG E
FEE AND MERCHANT DISCOUNT
A NTIT RUST LITIGATION
JOINT PAGE-PROOF BRIEF FOROBJECTORS-APPELLANTS AND PLAINTIFFS-APPELLANTS
(MERCHANT APPELLANTS’ JOINT BRIEF)
Thomas C. Goldstein*†‡
Eric F. Citron
GOLDSTEIN & R USSELL P.C.5225 Wisconsin Avenue, N.W., Suite 404
Washington, D.C. 20015
202-362-0636
Michael J. Canter‡
Robert N. Webner
Kenneth J. Rubin
VORYS, S ATER , S EYMOUR AND PEASE LLP
52 East Gay Street
Columbus, Ohio 43215
614-464-6327
Gregory A. Clarick‡
CLARICK GUERON R EISBAUM LLP220 Fifth Avenue, 14th Floor
New York, New York 10001
212-633-4310
Stephen R. Neuwirth*
Sanford I. Weisburst
Steig D. OlsonCleland B. Welton II
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, New York 10010
212-849-7000
Jeffrey I. Shinder†
Gary J. Malone
A. Owen Glist
CONSTANTINE CANNON LLP
335 Madison Avenue, 9th Floor
New York, New York 10017
212-350-2700
On Appeal from the United States District Court
for the Eastern District of New York
12-4671-CV (L)
(Parties listed on inside cover)
12-4708-cv (CON), 12-4765-cv (CON), 13-4719-cv (CON), 13-4750-cv (CON), 13-4751-cv (CON),13-4752-cv (CON), 14-32-cv (CON), 14-117-cv (CON), 14-119-cv (CON), 14-133-cv (CON), 14-157-cv (CON),14-159-cv (CON), 14-192-cv (CON), 14-197-cv (CON), 14-219-cv (CON), 14-225-cv (CON), 14-241-cv (CON),14-250-cv (CON), 14-266-cv (CON), 14-303-cv (CON), 14-331-cv (CON), 14-349-cv (CON), 14-404-cv(CON),14-422-cv (CON), 14-443-cv(CON),14-480-cv (CON), 14-497-cv (CON), 14-530-cv (CON), 14-567-cv (CON),
14-584-cv (CON), 14-606-cv (CON), 14-663-cv(CON), 14-837-cv (CON)
!"#$% '()*+,' -./01$23% 456 7"8$% ' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 57/512
*Attorneys for Objector-Appellant
Home Depot U.S.A., Inc.
† Attorneys for Plaintif fs-Appellants
Coborn’s Incorporated; D’Agostino Supermarkets, Inc.; Jetro Holdings, LLC;
Affi liated Foods Midwest Cooperative, Inc.; National Association of Convenience
Stores (NACS); National Community Pharmacists Association (NCPA);
National Cooperative Grocers Association (NCGA); National Grocers
Association (NGA); National Restaurant Association (NRA); and NATSO Inc.;
And Objectors -Appellants
7-Eleven, Inc.; Academy, Ltd. d/b/a Academy Sports Outdoors;Aldo US Inc. d/b/a Aldo
and Call It Spring; Alon USA, LP (Alon Brands); Amazon.com, Inc.; American Eagle
Outfitters, Inc.; Barnes & Noble, Inc.; Barnes & Noble College Booksellers, LLC;
Best Buy Stores, L.P.; BJ’s Wholesale Club, Inc.; The William Carter Company (Carter’s);
Costco Wholesale Corporation; Crate & Barrel Holdings, Inc.; Darden Restaurants, Inc.; David’s Bridal, Inc., DBD Inc. and David’s Bridal Canada Inc.; Dick’s Sporting Goods, Inc.;
Dillard’s, Inc.; Family Dollar Stores, Inc.; Drury Hotels Company, LLC; Foot Locker, Inc.;
Gap Inc.; GNC Holdings, Inc. (General Nutrition Corporation); Genesco Inc.;
The Gymboree Corporation; HMSHost Corporation; IKEA North America Services, LLC;
J. Crew Group, Inc.; Kwik Trip, Inc.; Lowe’s Companies, Inc.; Marathon Petroleum LP;
Martin’s Super Markets, Inc.; Michaels Stores, Inc.; National Railroad Passenger
Corporation d/b/a Amtrak; Nike, Inc.; Panda Restaurant Group, Inc.;
Panera Bread Company; P.C. Richard & Son, Inc.; PETCO Animal Supplies, Inc.;
PetSmart, Inc.; RaceTrac Petroleum, Inc.; Recreational Equipment, Inc. (REI);
Roundy’s Supermarkets, Inc. d/b/a Pick ‘N Save, Rainbow, Copps, Metro Market and
Mariano’s; Sears Holdings Corporation; Speedway LLC; Starbucks Corporation;
Stein Mart, Inc.; Thermo Fisher Scientific Inc.; The Wendy’s Company; The Wet Seal, Inc.;
Whole Foods Market, Inc.; Zappos.com, Inc.; Fleet Wholesale Supply Co., Inc.;
Mills Motor, Inc.; Mills Auto Enterprises, Inc.; Willmar Motors, LLC; Mills Auto Center, Inc.;
Fleet and Farm of Alexandria, Inc.; Fleet Wholesale Supply of Fergus Falls, Inc.; Fleet and
Farm of Green Bay, Inc.; Fleet and Farm of Menomonie, Inc.; Mills Fleet Farm, Inc.;
Fleet and Farm of Manitowoc, Inc.; Fleet and Farm of Plymouth, Inc.; Fleet and Farm
Supply Company of West Bend, Inc.; Fleet and Farm of Waupaca, Inc.; Mills E-Commerce
Enterprises, Inc.; Brainerd Lively Auto, LLC; Ashley Furniture Industries Inc.; Beall’s, Inc.;
Boscov’s, Inc.; The Buckle, Inc.; Buc-ee’s Ltd.; The Children’s Place Retail Stores, Inc.;
Cracker Barrel Old Country Store, Inc.; Cumberland Farms, Inc.; Express, LLC;
Family Express Corporation; New York & Company, Inc.; Republic Services, Inc.;
Swarovski U.S. Holding Limited; The Talbots, Inc.
‡ Attorneys for Objectors-Appellants
Target Corporation; Macy’s, Inc.; Kohl’s Corporation; The TJX Companies, Inc.;
Staples, Inc.; J.C. Penney Corporation, Inc.; Office Depot, Inc.; L Brands, Inc.;
Big Lots Stores, Inc.; PNS Stores, Inc.; C.S. Ross Company; Closeout Distribut ion, Inc.; Ascena Retail Group, Inc.; Abercrombie & Fitch Co.; OfficeMax Incorporated;
Saks Incorporated; The Bon-Ton Stores, Inc.; Chico’s FAS, Inc.;
Luxot tica U.S. Holdings Corp. and American Signature, Inc.
!"#$% '()*+,' -./01$23% 456 7"8$% ( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 58/512
i
CORPORATE DISCLOSURE STATEMENT
The parties to this brief have submitted contemporaneously herewith a
Compendium of Corporate Disclosure Statements Pursuant to Rule 26.1 of the
Federal Rules of Appellate Procedure.
!"#$% '()*+,' -./01$23% 456 7"8$% 6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 59/512
ii
TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT .......................................................... i
TABLE OF AUTHORITIES ..................................................................................... v
PRELIMINARY STATEMENT ............................................................................... 1
JURISDICTION ......................................................................................................... 6
ISSUES PRESENTED ............................................................................................... 6
STATEMENT OF THE CASE .................................................................................. 7
I.
The Underlying Anticompetitive Conduct ...................................................... 7
II. The Settlement Negotiations And Agreement ............................................... 10
III.
Reactions To The Settlement ......................................................................... 18
IV.
The Objections And Their Rejection By The District Court......................... 21
A.
Objections To The Release Of Monetary Claims ............................... 21
B. Cohesion Objections ........................................................................... 22
C.
Objections To Adequacy Of Representation....................................... 25
D. Objections To The Scope Of The Release .......................................... 26
STANDARD OF REVIEW ..................................................................................... 28
SUMMARY OF ARGUMENT ............................................................................... 28
ARGUMENT ........................................................................................................... 32
I.
The District Court’s Judgment Impermissibly Extinguishes ClassMembers’ Individualized Claims For Money Damages WithoutProviding Opt-Out Rights. ............................................................................. 32
A.
Both the Due Process Clause and Rule 23 mandate that classmembers have the right to opt out and pursue theirindividualized legal claims. ................................................................. 32
!"#$% '()*+,' -./01$23% 456 7"8$% * 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 60/512
iii
B. The certification of the (b)(2) settlement class must be vacated
because it extinguishes merchants’ individualized legal claimswithout providing an opt-out right. ..................................................... 38
1. The settlement, on its face, releases individualizedmonetary claims. ....................................................................... 38
2.
The settlement has the effect of releasing a host ofindividualized legal claims. ...................................................... 39
C. There is no legitimate justification for denying merchants opt-out rights. ............................................................................................. 44
1.
There is no merit to the district court’s theory that a non-
opt-out class was permissible because the settlement provides its members no monetary relief. ................................. 44
2.
Rule 23(b)(2) does not allow the certification ofmonetary claims that arise in the future for the purpose ofcreating “litigation peace.” ........................................................ 47
II. The Mandatory Class Lacked The Required Cohesion Of Interests. ............ 48
A.
The greatest degree of cohesion is required for mandatorysettlement classes. ............................................................................... 48
B. The merchants bound to the (b)(2) class in this case were toodiverse for a single, indivisible injunction, and the settlementdoes not treat those class members equally......................................... 52
1. Class members had varying interests in the broad set ofclaims that the settlement purported to release. ........................ 53
2.
Class members had varying interests in the one claim onwhich limited relief was actually provided. .............................. 56
3. The relief on the Complaint’s surcharging claim does notconstitute an indivisible injunction. .......................................... 61
C.
The district court’s cohesion analysis ignored these flaws. ................ 63
III.
The Settlement Violates The Requirement Of Rule 23(a)(4) That TheClass Members Receive Adequate Representation. ...................................... 66
!"#$% '()*+,' -./01$23% 456 7"8$% ; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 61/512
iv
A. Adequate representation requires separate representatives and
counsel for subgroups with divergent interests. .................................. 66
B.
The (b)(2) and (b)(3) classes had antagonistic interests andcould not be adequately represented by common representativesand counsel. ......................................................................................... 68
C.
There is no substitute for independent and adequaterepresentation. ..................................................................................... 74
1. Overlap ...................................................................................... 75
2.
Results ....................................................................................... 78
IV.
By Releasing All Future Antitrust Claims, Including Claims That FarExceed The Scope Of The Complaint, The Settlement ViolatesControlling Precedent And Exceeds The Power Of A Federal Court. .......... 80
A. The settlement unlawfully releases future antitrust claims. ................ 80
B.
The settlement unlawfully releases claims beyond the scope ofthe present litigation. ........................................................................... 82
1. The settlement improperly releases unripe future claims. ........ 84
2. The settlement improperly releases present claims beyond the scope of the case. .................................................... 87
CONCLUSION ........................................................................................................ 91
CERTIFICATE OF COMPLIANCE ....................................................................... 94
!"#$% '()*+,' -./01$23% 456 7"8$% + 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 62/512
v
TABLE OF AUTHORITIES
Page
Cases
Am. Express Co. v. Italian Colors Rest.,133 S. Ct. 2304 (2013) ............................................................................ 31, 81
In re Am. Int’l Grp. Sec. Litig.,689 F.3d 229 (2d Cir. 2012) ..........................................................................57
Am. Safety Equip. Corp. v. J. P. Maguire & Co.,391 F.2d 821 (2d Cir. 1968) ..........................................................................81
Amchem Prods., Inc. v. Windsor ,521 U.S. 591 (1997)................................. 4, 35, 42, 45, 48, 49, 51, 52, 53, 57,
59, 64, 67, 68, 71, 73, 75, 77, 78
Authors Guild v. Google Inc.,770 F. Supp. 2d 666 (S.D.N.Y. 2011) .............................................. 32, 87, 90
Barnes v. Am. Tobacco Co.,161 F.3d 127 (3d Cir. 1998) ..........................................................................49
Casa Orlando Apartments, Ltd. v. Fed. Nat’l Mortgage Ass’n, 624 F.3d 185 (5th Cir. 2010) .........................................................................50
Charron v. Wiener ,731 F.3d 241 (2d Cir. 2013) ................................................................... 28, 37
E & L Consulting, Ltd. v. Doman Indus. Ltd.,472 F.3d 23 (2d Cir. 2006) ............................................................................ 85
Eubank v. Pella Corp.,2014 WL 2444388 (7th Cir. June 2, 2014) ....................................................75
Fox Midwest Theatres, Inc. v. Means,221 F.2d 173 (8th Cir. 1955) .........................................................................82
Gaines v. Carrollton Tobacco Bd. of Trade, Inc.,386 F.2d 757 (6th Cir. 1967) .........................................................................82
!"#$% '()*+,' -./01$23% 456 7"8$% , 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 63/512
vi
Gerber v. MTC Elec. Techs. Co.,
329 F.3d 297 (2d Cir. 2003) ..........................................................................28
Hecht v. United Collection Bureau, Inc.,691 F.3d 218 (2d Cir. 2012) ..........................................................................36
Jefferson v. Ingersoll Int’l Inc.,195 F.3d 894 (7th Cir. 1999) .........................................................................36
Joel A. v. Giuliani,218 F.3d 132 (2d Cir. 2000) ..........................................................................37
In re Joint E. and S. Dist. Asbestos Litig., 982 F.2d 721 (2d Cir. 1992) ..........................................................................75
Kartman v. State Farm Mut. Auto. Ins. Co.,634 F.3d 883 (7th Cir. 2011) .........................................................................50
Lawlor v. Nat’l Screen Serv. Corp.,349 U.S. 322 (1955).................................................................... 31, 81, 82, 84
Lemon v. Int’l Union of Operating Eng’rs,216 F.3d 577 (7th Cir. 2000) .........................................................................49
In re Literary Works in Elec. Databases Copyright Litig.,654 F.3d 242 (2d Cir. 2011) .................... 2, 28, 37, 46, 52, 65, 68, 73, 74, 77,
78, 83, 85, 86
Logan v. Zimmerman Brush Co.,455 U.S. 422 (1982).......................................................................................32
In re Masters Mates & Pilots Pension Plan & IRAP Litig.,957 F.2d 1020 (2d Cir. 1992) ........................................................................28
M.D. ex rel. Stukenberg v. Perry,675 F.3d 832 (5th Cir. 2012) .........................................................................50
Minn. Mining & Mfg. Co. v. Graham-Field, Inc.,1997 WL 166497 (S.D.N.Y. Apr. 9, 1997) ...................................................82
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,473 U.S. 614 (1985)................................................................................ 81, 82
!"#$% '()*+,' -./01$23% 456 7"8$% 5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 64/512
vii
Nat’l Super Spuds, Inc. v. N.Y. Mercantile Exch.,
660 F.2d 9 (2d Cir. 1981) ....................................................................... 83, 86
Ortiz v. Fibreboard Corp.,527 U.S. 815 (1999)................................. 5, 31, 33, 36, 42, 43, 48, 51, 64, 65,
67, 71, 72, 73, 77
Phillips Petroleum Co. v. Shutts,472 U.S. 797 (1985)................................ 12, 21, 29, 32, 33, 36, 37, 42, 43, 49
Prime Mgmt. Co., Inc. v. Steinegger ,904 F.2d 811 (2d Cir. 1990) ..........................................................................84
Robertson v. NBA,
556 F.2d 682 (2d Cir. 1977) ..........................................................................86
Robinson v. Metro-North Commuter R.R. Co.,267 F.3d 147 (2d Cir. 2001) .................................................................... 48-49
In re St. Jude Med., Inc.,425 F.3d 1116 (8th Cir. 2005) .......................................................................49
Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc.,40 F.3d 247 (7th Cir. 1994) ...........................................................................82
Stephenson v. Dow Chem. Co.,273 F.3d 249 (2d Cir. 2001),vacated in part on other grounds,539 U.S. 111 (2003).................................................................... 36, 42, 43, 77
TBK Partners, Ltd. v. Western Union Corp.,675 F.2d 456 (2d Cir. 1982) ................................................................... 37, 83
Three Rivers Motor Co. v. Ford Motor Co.,522 F.2d 885 (3d Cir. 1975) ..........................................................................82
United States v. Visa U.S.A., Inc.,344 F.3d 229 (2d Cir. 2003) ..................................................................... 7, 40
In re Visa Check/MasterMoney Antitrust Litig.,280 F.3d 124 (2d Cir. 2001) ......................................................... 2, 36, 52, 89
!"#$% '()*+,' -./01$23% 456 7"8$% 4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 65/512
viii
Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011) ............................. 4, 12, 21, 29, 30, 33, 34, 35, 38, 39,43, 45, 46, 49, 50, 55, 61, 63
Wal-Mart Stores, Inc. v. Visa U.S.A. Inc.,396 F.3d 96 (2d Cir. 2005) ................................................................. 7, 46, 86
Weinberger v. Kendrick ,698 F.2d 61 (2d Cir. 1982) ............................................................................ 86
Constitution, Statutes, and Rules
U.S. Const. amend. V ............................ 1, 2, 6, 21, 29, 32, 42, 43, 44, 49, 52, 64, 77
28 U.S.C. § 1291 ........................................................................................................6
28 U.S.C. § 1331 ........................................................................................................6
28 U.S.C. § 1332 ........................................................................................................6
28 U.S.C. § 1337 ........................................................................................................6
28 U.S.C. § 2201 ........................................................................................................6
28 U.S.C. § 2202 ........................................................................................................6
Fed. R. Civ. P. 23 ............................................................................................. passim
Fed. R. Civ. P. 23(a)(4) ............................................................. 66, 67, 71, 74, 75, 78
Fed. R. Civ. P. 23(b)(1) ..................................................................................... 45, 47
Fed. R. Civ. P. 23(b)(2) .................................................................................... passim
Fed. R. Civ. P. 23(b)(3) .................................................................................... passim
Fed. R. Civ. P. 23(c)(2)(B) ......................................................................................34
Fed. R. Civ. P. 23(c)(4)(B) ......................................................................................71
Other Authorities
James Grimmelmann, Future Conduct and the Limits of Class-Action
Settlements, 91 N.C. L. Rev. 387 (2013) ................................................. 84, 85
!"#$% '()*+,' -./01$23% 456 7"8$% '9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 66/512
ix
Benjamin Kaplan, Continuing Work of the Civil Committee: 1966
Amendments of the Federal Rules of Civil Procedure, 81 Harv. L.Rev. 356 (1967) .............................................................................................45
Moore’s Federal Practice § 23.25[5][e] ...................................................................67
!"#$% '()*+,' -./01$23% 456 7"8$% '' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 67/512
1
PRELIMINARY STATEMENT
Unless reversed, the district court’s class-certification ruling in this case will
inaugurate a new and dangerous model for settlement class actions. The settlement
approved below forces a diverse collection of tens of millions of class members to
release a wide array of individualized monetary claims against the defendants.
Supreme Court precedent unambiguously bars that result; class members have the
right under both the Due Process Clause and Federal Rule of Civil Procedure 23 to
opt out of any settlement resolving monetary claims so that they may pursue those
claims individually. But the purpose and effect of this settlement is to evade that
established rule: It creates contrived opt-out and non-opt-out classes, represented
by the same lawyers and class representatives, in order to require all the members
of the larger, non-opt-out class to release all of their claims.
In approving the settlement, the district court allowed the defendants to pay
money to the opt-out class in exchange for a compulsory release from the non-opt-
out class of claims against the defendants’ ongoing and future conduct—money
damages claims included. That trade violates the right of objecting class
members—like the more than 200 objectors joining this “Merchant Appellants’
Joint Brief”—to litigate their own individualized claims and so to preserve their
only chance to stop conduct they believe is unlawful. The district court’s judgment
approving this design should be reversed.
!"#$% '()*+,' -./01$23% 456 7"8$% '( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 68/512
2
Here, in sum, are the facts: The plaintiffs are merchants that accept Visa and
MasterCard. They brought suit under the Sherman Act against Visa, MasterCard,
and certain of their member banks. The Complaint targeted specific
anticompetitive practices that defendants use to inflate the “interchange” fees
merchants pay for accepting their cards. The plaintiffs sought to proceed on behalf
of a massive collection of diverse merchants that take such cards—from the largest
chain stores to the smallest food trucks.
The plaintiffs’ lawyers then negotiated a settlement with the defendants.
Consistent with the Due Process Clause and Rule 23, the settlement could have
resolved the plaintiffs’ claims on an opt-out basis. See, e.g., In re Visa
Check/MasterMoney Antitrust Litig. (“Visa Check ”), 280 F.3d 124, 147 (2d Cir.
2001) (Sotomayor, J.); In re Literary Works in Elec. Databases Copyright Litig.
(“ Literary Works”), 654 F.3d, 242, 246 (2d Cir. 2011). But these defendants
conditioned a multi-billion dollar payment—and commensurate fee award to class
counsel—on a non-opt-out agreement that immunized the defendants from any
future challenge by any merchant to their ongoing conduct. The appellants joining
this brief are among the large proportion of merchants that objected to such a
settlement as not only substantively inadequate, but also a wrongful deprivation of
their fundamental right to protect their interests individually.
!"#$% '()*+,' -./01$23% 456 7"8$% '6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 69/512
3
One set of counsel and representative plaintiffs negotiated the settlement for
both classes; the non-opt-out class, despite its divergent interests, was not afforded
independent representation. The unprecedented settlement they reached involves
two key elements.
First, the settlement defines a conventional opt-out class of merchants that
accepted Visa or MasterCard in the past. The settlement grants these merchants
cash as compensation for past damages, if they do not opt out.
Second, and critically, the settlement defines a non-opt-out class consisting
of all merchants that accept Visa or MasterCard at any time after November 28,
2012 (the date the district court granted the settlement preliminary approval). This
class includes all the members of the opt-out class who remain in business—even
those who have actually opted out—plus all the millions of merchants that will
ever be founded and accept credit cards at any point in the future. In substance, the
settlement grants these merchants limited prospective relief with respect to only
one challenged practice, while immunizing the defendants from suit regarding the
other practices challenged by the Complaint. Indeed, the immunity is substantially
broader than even that: From the date of preliminary approval, the settlement
forces all the non-opt-out class members to forever release their claims against the
defendants with respect to all the conduct challenged in the Complaint, all of
!"#$% '()*+,' -./01$23% 456 7"8$% '* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 70/512
4
defendants’ other existing policies and practices, and any substantially similar
practices they ever adopt in the future.
This settlement scheme is unlawful. The Supreme Court recently and
unanimously reiterated that class-action judgments may not resolve individualized
monetary claims without an opt-out right. See Wal-Mart Stores, Inc. v. Dukes, 131
S. Ct. 2541, 2558-59 (2011). Yet this settlement does just that, granting
defendants sweeping prospective immunity from suit—including suits for money
damages. Defendants retain that immunity forever, even if economic
circumstances change in a manner that exacerbates the anticompetitive effects of
their practices or creates new harms.
This settlement thus forces a group of motivated and well-equipped
commercial entities—standing ready and willing to litigate the unlawfulness of
defendants’ conduct—to surrender their high-value monetary claims forever. That
result inverts the “core” utility of class actions, which is “to overcome the problem
that small recoveries do not provide the incentive for any individual to bring a solo
action prosecuting his or her rights.” Amchem Prods., Inc. v. Windsor , 521 U.S.
591, 617 (1997) (citation and quotation omitted).
The settlement is plainly unlawful in other respects as well. It binds together
an astonishingly disparate class with tens of millions of members—essentially,
!"#$% '()*+,' -./01$23% 456 7"8$% '; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 71/512
5
every imaginable merchant—each with radically different interests in the many
claims it releases.
Further, one set of class counsel and representatives bargained on behalf of
two classes with conflicting interests. The substantially larger non-opt-out class—
including new, growing, and yet-to-be-created merchants—naturally favored
forward-looking relief that would protect against future harms. The smaller, opt-
out class necessarily had a relatively greater interest in retrospective relief— i.e.,
money damages. The class representatives and counsel thus had an incentive to
sacrifice the future-looking interests of the former for the money immediately
available to the latter. The Supreme Court has held that just such a design is
“obvious[ly]” unlawful. Ortiz v. Fibreboard Corp., 527 U.S. 815, 856 (1999).
This settlement structure is surely a boon to defendants, who can secure
permanent immunity for their ongoing practices. But Rule 23 does not exist to
strip objecting class members of the right to pursue their own legal claims. Those
claims vindicate not only private rights, but also the substantial public interest in
enforcement of the antitrust laws. If this settlement stands, class members will not
get their day in court, and practices that raise prices for everyone will be
immunized from any future challenge. Nothing—and certainly not defendants’
desire for “litigation peace,” SPA44—can justify that result.
!"#$% '()*+,' -./01$23% 456 7"8$% '+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 72/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 73/512
7
modest injunctive relief is required to grant the defendants a sweeping release from
future liability?
4. Does this settlement unlawfully release future antitrust claims, unripe
claims against future conduct, and claims that exceed the scope of the Complaint?
STATEMENT OF THE CASE
This is an appeal from a judgment of the U.S. District Court for the Eastern
District of New York (Gleeson, J.), certifying settlement-only classes and
approving a final class-action settlement. The opinion is not yet reported but is
available at 2013 WL 6510737 (E.D.N.Y. Dec. 13, 2013).
I. The Underlying Anticompetitive Conduct
Merchants are charged an “interchange fee” every time they accept a Visa or
MasterCard credit or debit card.1 These fees are lucrative: U.S. merchants alone
pay more than $40 billion per year. See JA[__]{DE-1533 (Plaintiffs’ Summ. J.
Opp. 20-21; Rebuttal Report of Alan S. Frankel, Ph.D. ¶216; Report of Robert H.
Topel at 22 n.52)}. The high price reflects the fact that interchange fees are set on
1 For further industry background, see Wal-Mart Stores, Inc. v. Visa U.S.A.
Inc., 396 F.3d 96, 101-02 (2d Cir. 2005), and United States v. Visa U.S.A., Inc.,344 F.3d 229, 234-37 (2d Cir. 2003). Further detail is also provided in the
Merchant Trade Groups’ Brief, which focuses on the unfairness of the settlement.These appellants join those arguments and incorporate them by reference, alongwith the arguments advanced in the briefs of the Retailers and MerchantsObjectors, and U.S. PIRG and Consumer Reports.
!"#$% '()*+,' -./01$23% 456 7"8$% '5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 74/512
8
a non-competitive, industry-wide basis through the Visa and MasterCard networks
that nominally exist to facilitate payments among merchants and banks.
This case arises from a consolidated class-action Complaint asserting
antitrust claims against Visa and MasterCard, as well as their member banks,
relating to these interchange fees. Visa and MasterCard have some 5,000 pages of
rules, spread over sixteen rulebooks, governing acceptance of Visa and MasterCard
transactions. See JA[__] (public rulebooks); JA[__]{Corrected 9/12/13 Tr. 100;
DE2605 (Amazon.com Obj. ¶14)}. But the Complaint challenged only a tiny
fraction of those rules and practices as restraining competition among banks over
interchange fees.2
The plaintiffs’ core allegation is that the defendants fix interchange fees by
adhering to published schedules of so-called “default” rates. See JA[__]
(Complaint ¶¶1, 443-68). These schedules provide a rate in the absence of a
bilateral agreement between a given bank and a particular merchant. In practice,
however, the default rate is the actual rate. Although banks and merchants can
theoretically negotiate individual agreements, that does not happen in reality. The
default rates—together with other practices—eliminate any incentive for the banks
2
There were ultimately three complaints in the case, two of which wereaddressed to the Visa and MasterCard IPOs. The operative complaint for present purposes is the Second Consolidated Amended Class Action Complaint, and isreferred to as “the Complaint.” See JA[__].
!"#$% '()*+,' -./01$23% 456 7"8$% '4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 75/512
9
to compete with each other and to negotiate with merchants over rates or terms of
acceptance. So Visa and MasterCard set the default fees at supra-competitive
levels, and the banks in turn apply those rates without risk that their competitors
will offer merchants a lower price.
The most important additional restraint supporting this anticompetitive
regime is the collection of rules known as “Honor-All-Cards,” which requires any
merchant that accepts any credit (or debit) card on the Visa or MasterCard network
to accept all credit (or debit) cards on that network. It makes no difference which
bank issued the card or—critically—what interchange fee applies to the card. So,
for example, if a merchant wants to take Visa credit cards, it must accept not only
basic Bank of America Visa cards but also Chase’s premium Sapphire Preferred
Visa cards, even if the merchant must pay a substantially higher interchange fee for
the latter. JA[__] (Complaint ¶¶8(m), 240, 244, 436). As a consequence, no bank
has an incentive to offer a merchant a lower interchange rate to accept any of its
cards: A merchant cannot reject any issuing bank’s Visa or MasterCard credit card
without dropping the entire network, including the less expensive cards of every
other bank.
Visa and MasterCard have other “anti-steering” rules that reinforce the
barriers to interchange competition among the banks. JA[__] (Complaint, ¶8(d)).
Although the settlement in this case does not provide any relief with respect to
!"#$% '()*+,' -./01$23% 456 7"8$% (9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 76/512
10
default interchange or Honor-All-Cards, it does address one such restraint: the “no-
surcharging” rule. Before the settlement, Visa and MasterCard barred merchants
from charging a customer any additional fee for using any kind of payment card.
If merchants could impose such “surcharges,” they could theoretically encourage
consumers to use lower-cost options. See, e.g., JA[__] (Complaint ¶¶8(d), 94, 97,
189-99). But many states prohibit surcharging by statute, making the networks’
no-surcharging rules irrelevant in those parts of the country. See infra, at 22-23,
56-60.
II. The Settlement Negotiations And Agreement
Class counsel and the defendants sought to negotiate a comprehensive
settlement that would bind every kind of merchant that accepts payment cards.
Their putative class has tens of millions of members and is breathtaking in scope.
It includes Amazon’s nationwide delivery service and the local pizza delivery
shop; big-box retailers and mobile food trucks; tech-savvy online sellers and local
corner stores; high-fashion retailers where almost everyone uses credit cards and
low-margin food marts where consumers routinely use debit, cash, or personal
checks. Indeed, the pervasive presence of payment cards stretches the class far
beyond recognizable retail merchants to include health insurers, state governments,
public utilities, and all other entities that accept Visa or MasterCard.
!"#$% '()*+,' -./01$23% 456 7"8$% (' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 77/512
11
Class counsel’s stated goal in the litigation was to secure not only
compensation for the merchants’ past damages, but also lasting reform for the
future. As lead counsel explained: “While th[e] … action contained a damage
claim, and we certainly expected damages to be enormous, the primary goals were
to reform the market by eliminating the horizontal agreements among the banks to
fix the levels of interchange fees and enforce the rules that we were challenging.”
JA[__]{DE2113-6 (Wildfang Decl. ¶24)}.
For their part, the defendants also had an overriding goal in settlement
negotiations: complete and permanent litigation peace extending well beyond the
limited structural changes they were willing to make to their practices going
forward. Because banks receive $40 billion annually in interchange fees, they
could easily afford to make a nominally large cash payment to the class, as well as
minor rules changes. But in return, they required assurances that they would never
face additional private suits by merchants relating to any of their policies or
practices. Throughout the negotiations, the two objectives were bound together.
As lead counsel further explained: “The negotiations before the mediators were
always—one issue was monetary, the other issue was equitable relief. One was not
going to be reached without reaching the other.” JA[__]{DE1732 (11/9/12 Tr. 9)}.
The interests of the negotiating parties culminated in the sweeping
settlement at issue in this appeal. It seeks to grant the defendants an expansive,
!"#$% '()*+,' -./01$23% 456 7"8$% (( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 78/512
12
permanent immunity from suit by any merchant, including from legal claims for
money damages. But the settling parties faced the obstacle that Supreme Court
precedent unambiguously prohibits a mandatory class-action judgment that
resolves class members’ individualized monetary claims. See, e.g., Dukes, 131
S. Ct. at 2558-59; Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-12 (1985).
The settlement attempts to avoid that rule by defining two classes: (1) an opt-out
class that would receive money damages, and (2) a non-opt-out class that would
release all its claims prospectively as of the settlement’s preliminary approval.
First, the settlement creates an opt-out class certified under Rule 23(b)(3).
This class encompasses all merchants with damages claims arising before the date
of preliminary approval (November 28, 2012). SPA118 (Settlement ¶2(a)). Class
counsel estimated that this class contains more than 12 million members. SPA23.
Members of the (b)(3) class that did not opt out would receive payments from “two
cash funds totaling up to an estimated $7.25 billion.” SPA13.3 The participating
members of this class must release all existing and future claims against defendants
3 The cash payment was set at $6.05 billion, subject to reductions of up to
25% for opt-outs. SPA77-78 (Judgment ¶9(a)); SPA120-21, 125-26 (Settlement ¶¶9-11, 18-20). Because opt-outs exceeded 25% of the transaction volume atissue, the $6.05 billion was reduced to about $4.5 billion. SPA77-78 (Judgment
¶¶8, 9(a)); JA[__]{DE5940 (Class Plaintiffs’ Fee Reply at 7)}. Those remaining in
the (b)(3) class will also receive an estimated ten-basis-point interchange feereduction for eight months. SPA54; SPA78 (Judgment ¶9(b)); SPA121-24(Settlement ¶¶11-15). Together, this consideration is actually worth about $5.7
billion (or about $5.2 billion after deduction of counsels’ fees).
!"#$% '()*+,' -./01$23% 456 7"8$% (6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 79/512
13
with respect to any of their current rules or practices, as well as any future rules or
practices that are substantially similar. SPA131-39 (Settlement ¶¶31-38). The
release granted by this class is non-mandatory, however, because merchants may
opt out.
The settlement also creates a second, non-opt-out class certified under Rule
23(b)(2). This class encompasses all merchants that have accepted Visa or
MasterCard since the date of preliminary approval or will accept either of them in
the future. SPA118 (Settlement ¶2(b)).4 The members of this class are defined by
their possession of claims arising any time after preliminary approval—including
individualized claims for money damages that accrue at any point in the future.
This class includes all the members of the opt-out class that remained in business
after preliminary approval (even if they opted out), plus tens of millions of
additional merchants that will subsequently open their doors and accept Visa or
MasterCard. In sum, because this class is mandatory, every merchant in the
country that now or in the future accepts Visa or MasterCard is bound by its terms
and barred from opting out.
4
Because acceptance of those brands is ubiquitous, and the settlement is onlyrelevant to merchants that do accept Visa or MasterCard, we use “all merchants” asshorthand for “all merchants to the extent they ever accept a Visa or MasterCardtransaction.”
!"#$% '()*+,' -./01$23% 456 7"8$% (* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 80/512
14
The settlement with the non-opt-out (b)(2) class leaves in place—and indeed
immunizes from any later suit—the default interchange schedules and Honor-All-
Cards rules that were the focus of the plaintiffs’ antitrust claims. Instead, Visa and
MasterCard agreed to three limited forms of prospective relief. See SPA85-87
(Judgment ¶13(c)-(f), (i)-(j)). These limited changes remain in place only until
July 20, 2021. SPA87 (Judgment ¶13(m)); SPA151, 164 (Settlement ¶¶45, 58).
First, the settlement permits merchants to accept Visa or MasterCard at some
outlets, but not others, if those outlets operate under separate trade names or
banners. SPA85 (Judgment ¶13(c)-(d)); SPA140-41, 153-54 (Settlement ¶¶41,
54). Visa and MasterCard never explicitly prohibited this practice, however. See
JA[__]{DE2448 (Costco Obj. ¶20); DE2644 (Wal-Mart Obj. ¶41)}. Further, this
relief is irrelevant to the vast majority of U.S. merchants, who operate exclusively
under one trade name.
Second, the settlement provides that Visa and MasterCard will negotiate in
good faith with merchant-organized buying groups. SPA86-87 (Judgment ¶13(i)-
(j)); SPA149-50, 163-64 (Settlement ¶¶43, 56). But here too, Visa and MasterCard
never expressly prohibited this practice before. SPA43. Further, the obligation is
only to negotiate; there is no enforceable duty to reach agreement. Finally, this
relief is of limited practical value for the many merchants who are unlikely to join
with competitors because of their size or business model.
!"#$% '()*+,' -./01$23% 456 7"8$% (; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 81/512
15
Third—and embodying the only form of relief the district court thought had
any material significance—the settlement provides that merchants may engage in
certain forms of surcharging. The settlement permits surcharging at the “Brand
Level” (i.e., all Visa and/or MasterCard transactions) or the “Product Level” (i.e.,
transactions on cards of the same type, such as all Visa Traditional Rewards cards
but not Visa Classic cards). SPA85-86 (Judgment ¶13(e)-(f)); SPA141-49, 154-63
(Settlement ¶¶42, 55). But while the settlement addresses defendants’ surcharging
bans, many class members will remain foreclosed from surcharging by substantial
legal, contractual, and practical barriers, including state law prohibitions and pre-
existing contracts. See infra, at 22-23, 56-60.
Whatever the value of these three forms of relief to individual class
members, the settlement mandates that, in exchange, the entire (b)(2) class grant
defendants a sweeping immunity from suit—including suits for money damages.
All of the millions of existing and future (b)(2) class members are forced to release
their claims regarding defendants’ post-November 28, 2012 conduct. That release
covers all of Visa’s and MasterCard’s existing rules, all their unwritten practices,
and any future rules or practices that “may in the future exist in the same or
substantially similar ” form. SPA169-72, 173-74 (Settlement ¶¶68, 71) (emphasis
added).
!"#$% '()*+,' -./01$23% 456 7"8$% (+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 82/512
16
Unlike the changes described above, this broad release continues in
perpetuity. And it extends to new merchants that do not yet even exist. Merchants
that start accepting Visa and MasterCard transactions only after July 20, 2021
release their claims even though they will not receive any of the settlement relief at
all.
The (b)(2) release explicitly extends not only to claims in the Complaint on
which the class receives no relief, but also to claims that were not—indeed, could
not have been—asserted in the Complaint. The settlement requires the (b)(2) class
to grant the defendants immunity from suit with respect to “any other actual or
alleged Rule,” SPA170 (Settlement ¶68(c)), defined to mean “any rule, by-law,
policy, standard, guideline, operating regulation, practice, procedure, activity or
course of conduct relating to any Visa-Branded Card or any MasterCard-Branded
Card,” SPA113 (Settlement ¶1(mm)) (emphasis added). It thus reaches the entirety
of defendants’ detailed rulebooks, as well as all of their unwritten rules, policies,
and practices.
The release applies to all manner of claims, including money damages
claims, even if they did not exist at the time the Complaint was filed. It also
encompasses claims that could only arise in the future—for example, because
circumstances change to make a current policy unlawfully anticompetitive. The
release extinguishes “any and all manner of claims” including:
!"#$% '()*+,' -./01$23% 456 7"8$% (, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 83/512
17
any form of declaratory, injunctive, or equitable relief, or any
damages or other monetary relief relating to the period after the dateof the Court’s entry of Class Settlement Preliminary Approval … thatany Rule 23(b)(2) Settlement Class Releasing Party now has, or
hereafter can, shall, or may in the future have….
SPA169 (Settlement ¶68) (emphasis added); see also SPA173-74 (Settlement ¶71).
These are claims that may not ripen for years, or decades, because the release
extends to the “future effect” of present rules or conduct, or substantially similar
rules or conduct, whether or not those practices have any current anticompetitive
effects. SPA171 (Settlement ¶68(g)-(h)).
For example, the settlement provides no relief from the default interchange
or Honor-All-Cards rules. But the mandatory (b)(2) release expressly bars all
claims “arising out of or relating in any way” to those specific practices. SPA169-
72 (Settlement ¶68). The release also specifically provides that it does not in any
way limit the ability of any “Visa Defendant” or “MasterCard Defendant” to set
interchange rates. SPA152, 166 (Settlement ¶¶51, 64).
The release also expressly includes damages claims against Visa’s Fixed
Acquirer Network Fee (“FANF”). SPA174 (Settlement ¶72(d)). But the plaintiffs
could not have asserted such a claim in the Complaint because Visa did not even
implement the FANF until after the close of summary judgment briefing.
!"#$% '()*+,' -./01$23% 456 7"8$% (5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 84/512
18
III. Reactions To The Settlement
When announced, the settlement was met with widespread opposition.
There were originally nineteen named plaintiffs in the case, including six major
trade associations. Ten—the majority, including all the trade associations acting in
the interest of their many members—objected to the mandatory (b)(2) settlement.
See JA[___]{DE2447 (Coborn’s Obj. ¶¶7-12); DE2449 (D’Agostino Obj. ¶¶8-11);
DE2459 (Jetro Obj. ¶6); DE2563 (Affiliated Foods Obj. ¶7); DE2561 (NACS Obj.
¶¶11-22); DE2619 (NCPA Obj. ¶¶13-18); DE2546 (NCGA Obj. ¶7); DE2475
(NGA Obj. ¶¶7-12); DE2464 (NRA Obj. ¶¶7-8); DE2461 (NATSO Obj. ¶¶6-11);
DE6006-1 (NACS Supp. Decl. ¶¶5-16); DE6006-2 (NCGA Supp. Decl. ¶¶5-18);
DE6006-3 (NCPA Supp. Decl. ¶¶6-13); DE6006-4 (NGA Supp. Decl. ¶¶5-17)}.
Lead class counsel reacted by dropping them as class representatives and excluding
them from all further negotiations, even though they would remain bound, as
members of the mandatory (b)(2) class, to the representation of class counsel and
the settlement’s broad release of claims.
In total, several thousand merchants—large and small—objected to the
mandatory (b)(2) class. “[T]he roster of objectors include[d] some of the nation’s
largest retailers,” representing almost 20% of all Visa and MasterCard U.S.
transaction volume. SPA23.
!"#$% '()*+,' -./01$23% 456 7"8$% (4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 85/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 86/512
20
5746(JG)(JO), 14-md-1720(JG)(JO) (E.D.N.Y.), ECF No. 38; DE2495-2 (Target
Complaint)}.
The (b)(3) settlement similarly generated widespread opt-outs from
merchants, representing over 25% of transaction volume. JA[__]{DE5940 (Class
Plaintiffs’ Fee Reply at 7)}. These merchants elected to pursue their claims
individually, despite the fact that the value of those claims was substantially
limited by the mandatory release from the non-opt-out class binding every
merchant that remained in business. Indeed, the volume of opt-outs was so great
that it gave defendants the option to jettison the settlement entirely. SPA124-26,
190 (Settlement ¶¶17-20, 97). They declined to do so, however, preserving their
mandatory perpetual release.
The district court recognized that “the motion for final approval … caused a
rift among large United States retailers,” and showed that “divisions among the
major merchants run deep.” SPA23. It noted that ten of the top twenty-five
convenience stores objected, and that many merchants regarded the (b)(2) relief as
essentially valueless to them. See, e.g., SPA24, 36, 38-43. Other merchants, such
as major airlines, opted out, believing they could obtain a larger cash recovery on
their own, but did not object because “they apparently see value in the (b)(2)
relief.” SPA23.
!"#$% '()*+,' -./01$23% 456 7"8$% 6' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 87/512
21
IV. The Objections And Their Rejection By The District Court
Merchants and their representatives submitted four relevant categories of
objections to the district court, which rejected each of them.
A. Objections To The Release Of Monetary Claims
Many merchants objected that the mandatory release imposed on the (b)(2)
class violated the Due Process Clause and Rule 23, both of which prohibit a class-
action judgment from resolving claims for individualized relief, including claims
for money damages, without providing an opt-out right. See, e.g., JA[__]{DE2591
(Home Depot Obj. 15-30); DE2613 (1001 Property Solutions Obj. 5-10); DE2670
(Objecting Plaintiffs’ Obj. 21-24); DE2495-1 (Target Obj. 7-17); see also DE2427
(First Data Obj. 9-17)}. The objectors stressed that the unanimous portion of the
Supreme Court’s recent decision in Dukes, 131 S. Ct. at 2558, as well as the
Court’s prior opinion in Shutts, 472 U.S. at 797, held that individualized monetary
claims could not be resolved through a mandatory (b)(2) class.
The district court addressed these central objections in only one brief
paragraph, holding that “[t]here is no due process right to opt out of the (b)(2)
class” because “[t]he (b)(2) settlement here is limited to going-forward injunctive
relief that changes the structure of the network practices.” SPA46. Limiting its
analysis to the relief members of the non-opt-out class obtained , the court did not
address the far broader collection of individualized, monetary claims extinguished
!"#$% '()*+,' -./01$23% 456 7"8$% 6( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 88/512
22
by the (b)(2) release. See supra, at 15-17. The court also suggested, without
citation, that the mandatory (b)(2) class was lawful because it helped to ensure
“litigation peace.” SPA44.
B. Cohesion Objections
Numerous appellants objected that the far-flung mandatory (b)(2) class
lacked sufficient cohesion. They explained that merchants did not share a common
interest in the Complaint’s allegations, as demonstrated by their unequal ability to
make use of the limited surcharging relief granted to the (b)(2) class. Further, they
had significantly varying interests in the many claims the class was required to
release. See, e.g., JA[__]{DE2591 (Home Depot Obj. 3-4, 19-27); DE2670
(Objecting Plaintiffs’ Obj. 24-27)}. For example, merchants that did not yet exist
were bound by the settlement and therefore required to release their claims against
defendants. But they received none of the cash settlement because they were
excluded from the (b)(3) class (since they were not in business before November
28, 2012). See, e.g., JA[__]{DE2591 (Home Depot Obj. 21); DE2670 (Objecting
Plaintiffs’ Obj. 38-39); see also DE2670-8 (Ex. 68, 16-17)}.
Objectors also explained that the class lacked cohesion because merchants
have significantly varying interests in obtaining relief against the no-surcharging
rule. For example, merchants located in ten states and Puerto Rico are prohibited
as a matter of law from engaging in surcharging. See SPA215-32 (state laws
!"#$% '()*+,' -./01$23% 456 7"8$% 66 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 89/512
23
barring surcharging). Also, because the settlement’s surcharging provisions
contain a most-favored-nation clause, merchants that accept American Express
(which effectively prohibits surcharging) cannot surcharge Visa and MasterCard
under the settlement. SPA41, 141-44, 154-57 (Settlement ¶¶42(a), 55(a));
JA[__]{DE5965 at 41-42}(court-appointed expert concluding that approximately
ninety percent of the (b)(2) class by volume would be unable to surcharge for this
reason). The district court itself acknowledged that, for these reasons, “most
merchants will, as a practical matter, be precluded from surcharging Visa and
MasterCard products.” SPA41.
For those merchants not subject to the foregoing blanket prohibitions, the
settlement still limits how they may surcharge. If a merchant wants to surcharge
Visa or MasterCard transactions, for example, the merchant must add the same
surcharge to all such transactions “regardless of the card’s issuer or product type.”
SPA141, 154 (Settlement ¶¶42(a)(i), 55(a)(i)). This maintains the restraint on
inter-bank competition that was the principal target of this suit. And other
conditions further limit merchants’ ability to surcharge or explain to consumers the
defendants’ role in the higher prices they pay. See SPA148, 161-62 (Settlement
¶¶42(c)(iii)-(iv), 55(c)(iii)-(iv)).
Ajaypal Banga, MasterCard’s CEO, revealed that MasterCard insisted on
these restrictions to minimize any impact from surcharging:
!"#$% '()*+,' -./01$23% 456 7"8$% 6* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 90/512
24
We believe the best thing to do was looking at our experience of
surcharging in other markets where, frankly, it didn’t really lead to agreat deal of actual surcharges being placed other than in a couple ofkinds of areas where cash isn’t quite able to compete. So for example,online airline bookings and the like…. So when I think about thathere, in this agreement, we have also managed to get in some of those
protections,… the declaration to the consumer with clarity, both onthe receipt and in the store, the level playing field concept that wethink we’ve got in there. All these were attempted as a way to sort of
try and box the issue while moving forward.... That’s kind of how Iapproached it …. And so it is friction. I don’t like the friction but I’m
trying to minimize it with as much lubricant as I can put in the system.
JA[__]{DE2670-8 (Ex. 94 (p. 370))}(emphasis added).
Many objectors also voiced unique concerns that had not been addressed in
any way by the settlement. For example, certain health insurers objected, noting
that the Affordable Care Act raised special regulatory concerns with interchange
fees and surcharging. JA[__]{DE2493-1; DE2643 (WellPoint and Blue Cross
Objections)}. A host of objectors noted that their individual circumstances made
surcharging relief valueless to them, or otherwise affected their perspective on the
mix of relief the case should have pursued. See, e.g., JA[__]{DE2411 (Boscov’s
Obj. ¶¶3-4); DE2434 (David’s Bridal Obj. ¶¶9-23); DE2446 (Carter’s Obj. ¶¶7-
18); DE2540 (Wawa Obj. ¶¶2-4); DE2458 (IKEA Obj. ¶¶16-33); DE2437 (Lowe’s
Obj. ¶¶14-29); DE2450 (Alon Obj. ¶¶15-33); DE2561 (NACS Obj. ¶¶23-37);
DE2644 (Wal-Mart Obj. ¶¶12-39); DE4640 (SIGMA Obj. ¶¶12-24)}.
Conceding that some of these concerns had not even been considered in the
negotiations, see, e.g., SPA48, the district court nonetheless addressed them only
!"#$% '()*+,' -./01$23% 456 7"8$% 6; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 91/512
25
briefly, concluding that the (b)(2) class was sufficiently cohesive because “[t]he
network rules regimes that gave rise to this case applied generally to every
merchant accepting Visa or MasterCard credit cards, and the injunctive relief in the
proposed settlement does as well.” SPA51. Although the court did address
arguments that surcharging relief was valueless to all , it did not address whether
the relief on that claim had different value to different class members. Nor did it
focus on class members’ different valuations of the claims the settlement released.
C.
Objections To Adequacy Of Representation
Objectors also raised the settlement’s failure to provide adequate
representation to the entire class. Numerous objectors explained that binding
future merchants that could not participate in the litigation and had no separate
representation could not be reconciled with Supreme Court precedent. See, e.g.,
JA[__]{DE2670 (Objecting Plaintiffs’ Obj. 28-36, 38-39); DE2592 (Dell Obj. 15);
DE2281 (Retailers and Merchants Obj. 11-20); DE3074 (Bridgestone Obj. 5-6);
DE4237 (Williams-Sonoma Obj. 5)}.
The district court did not analyze these objections with any particularity,
concluding merely that “the interests of the Class Plaintiffs and the rest of the
(b)(2) class are not antagonistic.” SPA52. The court did not address conflicts
created by the settlement’s release of claims by generations of future merchants—
including merchants that will start operating after the structural changes in the
!"#$% '()*+,' -./01$23% 456 7"8$% 6+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 92/512
26
settlement sunset in 2021. Like the settling parties, the district court never
explained how it was permissible to create two separate classes without providing
each with separate representatives and separate counsel.
D. Objections To The Scope Of The Release
Class members also objected to the scope of the release because, among
other things, it immunizes Visa and MasterCard from merchant lawsuits with
respect to all existing rules and policies and future versions thereof that are
“substantially similar.” Objectors emphasized that releasing ongoing and future
claims against default interchange and Honor-All-Cards would cement defendants’
substantial market power. See JA[__]{DE2605 (Amazon.com Obj. ¶12); DE2444
(Amtrak Obj. ¶¶7-8, 24); DE2439 (Roundy’s Supermarkets Obj. ¶20); DE2451
(Barnes & Noble Obj. ¶23); DE2670 (Objecting Plaintiffs’ Obj. 28-36)}. They
also argued that it would protect defendants against competition from new payment
methods, such as payments from mobile devices. See, e.g., JA[__]{DE2279 (City
of Oakland Obj. ¶17); DE2598 (Consumers Union Obj. 8); DE2361 (U.S. PIRG
Obj. 5); DE2364 (Jo-Ann Stores Obj. ¶2); DE2435 (Dillard’s Obj. ¶27); DE2670
(Objecting Plaintiffs’ Obj. 33)}. Professor Sykes, the court-appointed expert,
echoed these concerns, stating that “a release covering the future effects of all
existing or ‘substantially similar’ conduct or rules raises a danger of adverse,
!"#$% '()*+,' -./01$23% 456 7"8$% 6, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 93/512
27
unintended consequences in a technologically dynamic industry, consequences that
are inevitably somewhat speculative at this time.” JA[__]{DE5965 at 50}.
Visa and MasterCard confirmed these fears at the final fairness hearing.
Even though the Complaint did not concern mobile payments or emerging
technologies, they asserted that the settlement required merchants to release any
claim concerning the application of Visa’s or MasterCard’s Honor-All-Cards rules
to such technology. JA[__]{Corrected 9/12/13 Tr. 39}(“A mobile phone
transaction, in my judgment, is clearly released.”). The district court itself
expressed concern about this issue at the hearing.5 But its decision approving the
settlement was silent on the issue. The district court deemed it sufficient that the
settlement does not “release the defendants from liability for claims based on new
rules or new conduct,” and is therefore limited to claims that “are or could have
been alleged on the identical factual predicate of the claims in this case.” SPA46.
The court also held that immunizing defendants against future antitrust challenges
based on all present and “substantially similar” future conduct was permissible
because such conduct is not clearly illegal. SPA45-47.
5
See JA[__]{Corrected 9/12/13 Tr. 32}(“I have … a well-grounded concernhere that this release places the line of scrimmage in that future dispute as anantitrust claim that’s based on the application of those rules to a new technology,
places that line of scrimmage in the wrong spot.”).
!"#$% '()*+,' -./01$23% 456 7"8$% 65 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 94/512
28
STANDARD OF REVIEW
Class certification and the approval of class-action settlements are generally
reviewed for abuse of discretion. Literary Works, 654 F.3d at 249; Charron v.
Wiener , 731 F.3d 241, 247 (2d Cir. 2013). However, this Court reviews the
decision de novo when, as here, “the validity of the settlement … rests on the
determination of novel issues of … law.” In re Masters Mates & Pilots Pension
Plan & IRAP Litig., 957 F.2d 1020, 1026 (2d Cir. 1992); see also Gerber v. MTC
Elec. Techs. Co., 329 F.3d 297, 302 (2d Cir. 2003). Moreover, where certification
“rests on an error of law,” the district court necessarily abuses its discretion.
Charron, 731 F.3d at 247.
SUMMARY OF ARGUMENT
The central feature of this settlement is the certification of a mandatory Rule
23(b)(2) class that is forced to release all claims against defendants’ ongoing and
future conduct. This structure was designed to permit a single set of class
representatives and counsel to provide defendants with a global, prospective
immunity from suit—including suits for money damages—in exchange for a
substantial cash payment. Class members could opt out of receiving the money
(which went to the (b)(3) class), but could not save their claims from the all-
encompassing, forward-looking release (which came from the mandatory (b)(2)
class). This feature violates four separate doctrines designed to protect absent and
!"#$% '()*+,' -./01$23% 456 7"8$% 64 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 95/512
29
objecting class members from being bound against their will to a settlement that
benefits others at their expense.
First , this settlement expressly terminates the individualized monetary
claims of all the (b)(2) class members with no opt-out right. See SPA169
(Settlement ¶68). Indeed, the settlement pays billions of dollars to the (b)(3) class
on the exact same monetary claims—claims that are distinguished only by the date
on which the damages accrue. Shutts held that such claims belong to individual
class members under the Due Process Clause and must be protected by the right to
opt out. Dukes unanimously held that Rule 23 channels all such claims to opt-out
classes certified under Rule 23(b)(3).
The district court nonetheless approved the settlement on the theory that the
relief the (b)(2) class obtained did not include money damages. But what matters
are the claims that are resolved by the settlement—in particular, the claims that the
class has been forced to relinquish. It does not matter that the (b)(2) class received
no money, or that the defendants insisted on “litigation peace.” SPA44. The
court’s certification of a mandatory (b)(2) class extinguishing individualized
monetary claims violated the Due Process Clause and Rule 23.
Second , the (b)(2) class was not cohesive, particularly under the heightened
standard that applies to mandatory classes. The (b)(2) class is massive, consisting
of millions of existing merchants of every possible variety and many millions more
!"#$% '()*+,' -./01$23% 456 7"8$% *9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 96/512
30
that do not even exist yet. More than that, the (b)(2) class settlement resolves not
just one claim, nor just the claims in the Complaint, but essentially every possible
merchant claim against defendants’ existing rules and practices (and those that are
substantially similar) now and indefinitely into the future. Such a sprawling class,
resolving such a broad swath of claims, cannot be expected to bargain together for
a single, indivisible injunction benefitting all the members at once, as Rule
23(b)(2) requires. See Dukes, 131 S. Ct. at 2558. The best possible proof of that is
the deal that emerged: In exchange for releasing every other claim—including the
claims that mattered most to many of the class members—the (b)(2) class got relief
only on surcharging, even though class members in ten states are forbidden from
surcharging by law.
Third , the (b)(2) class was inadequately represented. The (b)(2) class was
limited to prospective relief and included millions of members (including recently
founded merchants, future businesses, and (b)(3) opt-outs) that had no interest in
the (b)(3) monetary relief at all. But the (b)(2) class had no lawyer and no class
representative whose role was solely to represent its predominantly future-looking
interests. Instead, both classes were represented by the same counsel and
representatives, who could not get their pecuniary reward through the (b)(3)
settlement without providing defendants with the global release they wanted from
the (b)(2) class.
!"#$% '()*+,' -./01$23% 456 7"8$% *' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 97/512
31
This representation was structurally inadequate. As an initial matter, classes
with divergent interests need their own counsel and representatives. That is
especially so where, as here, parties cannot opt out and obtain their own
representation, even when they know that their putative representatives are not
protecting their interests. And it is triply true here, where there is a well-
understood conflict of interest between the predominantly future-looking (b)(2)
class and the predominantly backwards-looking (b)(3) class. Class representatives
who can obtain immediate monetary relief have a recognized incentive to trade
away future-looking interests in return for more money now. The settling parties’
decision to structure their deal to create past- and future-looking classes, while
providing those classes with no independent representation, thus embodies an
“egregious” and “obvious” violation of settled class-action precedents. See, e.g.,
Ortiz , 527 U.S. at 853, 856.
Finally, the (b)(2) release in this case—extinguishing essentially every
present and future challenge to defendants’ existing, and substantially similar,
practices—exceeds the permissible scope of class-action litigation. It
prospectively releases future conduct from antitrust attack, a result the Supreme
Court has condemned. See, e.g., Am. Express Co. v. Italian Colors Rest., 133 S.
Ct. 2304, 2310 (2013); Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 328-29
(1955). It also extinguishes claims well beyond the scope of the Complaint,
!"#$% '()*+,' -./01$23% 456 7"8$% *( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 98/512
32
including future claims that are not yet ripe and present claims that are utterly
unrelated to the facts at issue. Ultimately, the settlement represents an effort to use
class-action litigation to structure a regulatory solution for an entire industry, much
like the settlement Judge Chin rejected in Authors Guild v. Google Inc., 770 F.
Supp. 2d 666, 669 (S.D.N.Y. 2011) (“Google Books”). This is not the proper role
of federal litigation; Congress provided these appellants with a cause of action
under the Sherman Act, and they should be allowed to vindicate it as they see fit.
ARGUMENT
I. The District Court’s Judgment Impermissibly Extinguishes Class
Members’ Individualized Claims For Money Damages Without
Providing Opt-Out Rights.
A. Both the Due Process Clause and Rule 23 mandate that class
members have the right to opt out and pursue their individualized
legal claims.
The Fifth Amendment prohibits the federal government from depriving
persons of their property “without due process of law.” U.S. Const. amend. V.
SPA207. That prohibition governs the entry of a judgment resolving a claim in
litigation. Because the claim—a “chose in action”—is a “species of property
protected by the … Due Process Clause,” Logan v. Zimmerman Brush Co., 455
U.S. 422, 428 (1982), the individual’s right to pursue the claim is “a
constitutionally recognized property interest,” Shutts, 472 U.S. at 807.
On that basis, the Supreme Court held in Shutts that if a court “wishes to
bind an absent plaintiff concerning a claim for money damages or similar relief at
!"#$% '()*+,' -./01$23% 456 7"8$% *6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 99/512
33
law, it must provide minimal procedural due process protection,” including not
only the “best-practicable” notice but also—critically—“an opportunity to remove
himself from the class.” Id. at 811-12 (emphasis added). The right to object to the
settlement is not enough: Class members must have the right to remove
themselves from the judgment and pursue their claims on their own.
In the thirty years since Shutts, the Supreme Court has not once approved a
class-action judgment that purported to resolve individualized legal claims without
affording class members the right to opt out and pursue their personal claims as
they saw fit. Rather, the Court has reaffirmed that “mandatory class actions
aggregating damages claims implicate the due process principle … deep-rooted [in
our] historic tradition that everyone should have his own day in court.” Ortiz , 527
U.S. at 846.
Federal Rule of Civil Procedure 23(b) embodies the same principles,
authorizing a non-opt-out, (b)(2) class only in unique circumstances where no
“claims for individualized relief,” such as “individualized award[s] of monetary
damages,” are at issue. Dukes, 131 S. Ct. at 2557. Instead, “individualized
monetary claims belong in Rule 23(b)(3),” the separate provision of the Rule that
guarantees absent class members the right to opt out. Id. at 2558. Under Rule 23,
class members’ individualized claims cannot be “ precluded by litigation they had
no power to hold themselves apart from.” Id. at 2559. Instead, “plaintiffs with
!"#$% '()*+,' -./01$23% 456 7"8$% ** 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 100/512
34
individual monetary claims [must] decide for themselves whether to tie their fates
to the class representatives’ or go it alone—a choice Rule 23(b)(2) does not ensure
that they have.” Id.
Indeed, as the Supreme Court explained, permitting a judgment to bind
members of a (b)(2) class with respect to their individualized monetary claims
would be “inconsistent with the structure of Rule 23(b).” Id. at 2558. Subsection
(b)(3) is designed for individualized legal claims in which class members may
have distinct interests. Accordingly, Rule 23(b)(3) permits class litigation
controlled by a representative only if common questions “predominate over any
questions affecting only individual members” and the class action is “superior” to
individual adjudication. Because those standards do permit the aggregation of
some individualized claims, Rule 23(b)(3) guarantees class members notice and the
opportunity to opt out. See Fed. R. Civ. P. 23(c)(2)(B).
By contrast, subsection (b)(2) contemplates a judgment binding the entire
class without notice and opt-out rights, and without regard to whether common
questions predominate, because it applies only when the case consists exclusively
of common claims in which the class has a single, indivisible interest. This
provision is never appropriate with respect to a “class member’s individualized
claim for money.” Dukes, 131 S. Ct. at 2558-59. In the Supreme Court’s words,
“[t]he key to the (b)(2) class is the indivisible nature of the injunctive or
!"#$% '()*+,' -./01$23% 456 7"8$% *; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 101/512
35
declaratory remedy warranted—the notion that the conduct is such that it can be
enjoined or declared unlawful only as to all of the class members or as to none of
them.” Id. at 2257.
The “prime examples” of such situations are “[c]ivil rights cases against
parties charged with unlawful, class-based discrimination.” Amchem, 521 U.S. at
614. But Rule 23(b)(2) treatment is not even available for every claim seeking
only injunctive relief: “Rule 23(b)(2) applies only when a single injunction or
declaratory judgment would provide relief to each member of the class,” and is
limited to cases where “the relief sought must perforce affect the entire class at
once.” Dukes, 131 S. Ct. at 2557-58.
If counsel drafts a class complaint to include a truly common injunctive
claim alongside individualized legal claims, that of course does not strip class
members of their right to pursue the latter individually. The right to opt out cannot
be nullified “whenever a plaintiff class, at its option, combines its monetary claims
with a request—even a ‘predominating request’—for an injunction.” Id. at 2559.
If that were permissible, “individual class members’ compensatory-damages
claims would be precluded by litigation they had no power to hold themselves
apart from.” Id .6
6 In this regard, Dukes “abrogated” this Court’s cases allowing monetary
claims to be certified in mandatory (b)(2) classes as long as injunctive claims
!"#$% '()*+,' -./01$23% 456 7"8$% *+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 102/512
36
Applying these principles, this Court has consistently disapproved class-
action judgments that purport to resolve individualized claims of class members
who did not get a chance to opt out. This Court has done so where the damages
claim already existed at the time the court entered the class-action judgment (as in
Shutts), if individual class members received inadequate notice of their opt-out
right. See Hecht , 691 F.3d at 222-23. It has also done so where the opt-out right
was ineffective because the precluded claim arose only after the court entered the
class-action judgment (as in Ortiz ). See Stephenson v. Dow Chem. Co., 273 F.3d
249 (2d Cir. 2001), vacated in part on other grounds, 539 U.S. 111 (2003).
The district court identified no case approving the release of past, present, or
future individualized claims—especially compensatory damages claims—without
allowing class members to opt out. The precedents cited by the settling parties
below to justify using Rule 23(b)(2) to deprive merchants of their opt-out rights
only highlight that this settlement is unprecedented.
The most analogous decision, Visa Check , approved the certification of a
class of merchants under only Rule 23(b)(3), precisely to avoid “the primary
concern … about Rule 23(b)(2),” i.e., “the absence of mandatory notice and opt-
out rights.” Visa Check , 280 F.3d at 147 (Sotomayor, J.) (citing Jefferson v.
“predominated.” See Hecht v. United Collection Bureau, Inc., 691 F.3d 218, 222-23 (2d Cir. 2012).
!"#$% '()*+,' -./01$23% 456 7"8$% *, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 103/512
37
Ingersoll Int’l Inc., 195 F.3d 894, 897 (7th Cir. 1999)). The recent settlement in
Literary Works released the defendants from future litigation over subsequent use
of the copyrighted works at issue. But, critically, it permitted class members to (1)
opt out of the settlement entirely or (2) “opt out of the release for future use” in
particular. 654 F.3d at 246-47. Even in the civil-rights cases at the core of Rule
23(b)(2), settlements in this Circuit have been carefully scrutinized to preserve
class members’ rights to pursue any individualized claims that might arise from the
defendants’ ongoing conduct. See, e.g., Joel A. v. Giuliani, 218 F.3d 132, 142 (2d
Cir. 2000) (settlement preserved “the right of an individual plaintiff to sue for
damages or equitable relief tailored solely to the specific circumstances of that
individual plaintiff”) (internal citation and quotations omitted); Charron, 731 F.3d
at 252 (noting that while (b)(2) settlement provided no relief on certain monetary
claims, it also “d[id] not extinguish them”).7
7
The only possible exception, TBK Partners, Ltd. v. Western Union Corp.,675 F.2d 456 (2d Cir. 1982), predates the opt-out right announced in Shutts, andthe parties in that case did not dispute whether the class had been “improperlycertified as a non-opt-out class.” Id. at 460 n.4.
!"#$% '()*+,' -./01$23% 456 7"8$% *5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 104/512
38
B. The certification of the (b)(2) settlement class must be vacated
because it extinguishes merchants’ individualized legal claimswithout providing an opt-out right.
1.
The settlement, on its face, releases individualized monetary
claims.
The judgment in this case presents precisely the scenario anticipated—and
unanimously forbidden—by the Supreme Court in Dukes. It disposes of every
class member’s claims “whether individual … or otherwise in nature, for any form
of … damages or other monetary relief relating to the period after [November 28,
2012], regardless of when such claims accrue…, in law or in equity.” SPA169
(Settlement ¶68) (emphasis added); SPA90 (Judgment ¶16(c)). Indeed, it does so
in the most extreme way possible: It releases such claims entirely and for all time,
with no changes to the ongoing conduct that precipitated this case aside from
limited surcharging relief.
The settlement and release terminate the (b)(2) class members’ rights to
recover damages by artificially splitting the damages claims pertaining to
defendants’ ongoing conduct, permitting class members to pursue individually
only the subset of damages that accrued before November 28, 2012 (if they opted
out of the (b)(3) class), and forever extinguishing any right to recover the damages
they subsequently suffer from the same conduct. That release applies indefinitely
into the future, no matter how great the damages merchants incur; indeed, it applies
even if circumstances change and seriously exacerbate the anticompetitive effects
!"#$% '()*+,' -./01$23% 456 7"8$% *4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 105/512
39
of the released rules and practices or their impact on individual class members.
SPA171 (Settlement ¶68(g)-(h)).
No one can foresee how the payment card industry will evolve, how
defendants’ present or future conduct might harm future competition, or how
heavily the economic harms might fall on particular class members given their
particular market circumstances. But under this settlement, it does not matter: In
direct contravention of Dukes, the settlement releases all those legal claims without
regard to individual merchants’ desires to preserve them for themselves. See 131
S. Ct. at 2557 (“[A]t a minimum, claims for individualized relief … do not satisfy”
Rule 23(b)(2).).
2.
The settlement has the effect of releasing a host of
individualized legal claims.
It is easy to illustrate that the release extinguishes individualized legal
claims, not injunctive claims common to the class as a whole. This case looks
nothing like the civil-rights suits classically resolved under Rule 23(b)(2). The
released claims are individualized and monetary—whether the damages associated
with the challenged practices accrued in the past, are accruing today, or will accrue
in the future—because the entire dispute is over whether defendants’ practices
restrain competition and thereby raise prices or otherwise take dollars out of
merchants’ pockets. As the district court found, “supracompetitive interchange
!"#$% '()*+,' -./01$23% 456 7"8$% ;9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 106/512
40
fees” are “the precise anticompetitive effect” the claims here “were brought to
challenge.” SPA42.
In fact, the character of the (b)(2) class’s claims is evident from the relief
provided to the separate (b)(3) class. While the relief the settlement provides to the
(b)(3) and (b)(2) classes is different (several billion dollars to the former; minor
rule changes to the latter), the claims that are settled on behalf of those classes are
identical—distinguished only by the date on which the damages accrue.
The released claims themselves also illustrate the point. Take the Honor-
All-Cards rules. See supra, at 9. Under this Court’s holding in United States v.
Visa, 344 F.3d at 229, merchants allege that those rules are unlawful horizontal
restraints preventing competition among banks for merchant acceptance of their
cards. The harm that merchants suffer from those rules is the inflated fees they
pay, giving rise to a classic money damages claim under the Sherman and Clayton
Acts. JA[__] (Complaint ¶¶292-312, 371-84, 409-15, 443-56). The same is true of
default interchange rates, which plaintiffs have attacked as price fixing. Id. Yet,
going forward, the settlement expressly extinguishes all such claims. SPA169-72
(Settlement ¶68).
Also illustrative is the settlement’s release of claims regarding the Fixed
Acquirer Network Fee, which Visa charges merchants for attaching to its network.
The FANF notably was under investigation by the Justice Department at the time
!"#$% '()*+,' -./01$23% 456 7"8$% ;' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 107/512
41
of the settlement. See JA[__]{DE2670 (Objecting Plaintiffs’ Obj. 34 n.43);
DE2670-8 (Ex. 82 (p. 300))}. Although the settlement allows individuals to seek
future injunctive relief against the FANF, it extinguishes every merchant’s
individualized monetary claim for post-November 28, 2012 damages caused by
this practice, even if the merchant later prevails in proving that the fee is unlawful
and caused significant monetary harm. SPA93 (Judgment ¶16(g)(iv)); SPA174
(Settlement ¶72(d)). This is exactly the opposite of what Rule 23(b)(2) allows.
The structure of this settlement, if approved by this Court, would thus
eviscerate the opt-out right that Rule 23 protects. As Rule 23 has been consistently
construed, an individual considering whether to opt out from a (b)(3) class will
expect that, if she prevails in her individual suit, she will secure monetary relief
extending to the date of the judgment, as well as an injunction protecting her from
future injury. But under the model of this settlement, as of the date on which the
(b)(2) class is defined, opt-out claimants cannot recover for their ongoing damages
or obtain an injunction to prevent future harm.
The implications of approving such a mandatory class release are sweeping,
and startling. If this settlement is affirmed, virtually any class action implicating
ongoing conduct may be split into a backwards-looking (b)(3) class and a
mandatory, forward-looking (b)(2) class. Lead class-action plaintiffs will always
have an incentive to take this step because it provides them an enormous benefit to
!"#$% '()*+,' -./01$23% 456 7"8$% ;( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 108/512
42
offer the defendants—categorical immunity from civil liability to every class
member (including class members that do not even exist yet) for harmful conduct
the defendants want to continue. Other parties are already adopting this model as a
template for their settlement-only class actions. See, e.g., JA[__] (AmEx
Settlement). Unless this Court reverses the judgment below, this innovation will
almost certainly become the next “stock device” in the world of class-action
litigation and settlement. Cf. Amchem, 521 U.S. at 618.
Not surprisingly, precedents regarding claims for money damages that will
arise in the future have treated them as claims for legal relief to which the
procedural protections of Rule 23 and the Due Process Clause fully apply. In
particular, Ortiz regards the termination of monetary claims as a serious due-
process problem even though a large segment of the disputed claims were by
“future claimants” who had no claim for damages at the time of the settlement.
Ortiz , 527 U.S. at 846.
In Stephenson, this Court likewise recognized that the Due Process Clause
does not permit a class-action judgment to release future damages claims without
“adequate representation … and an opportunity to opt out.” 273 F.3d at 260 (citing
Shutts, 472 U.S. at 811-12). Stephenson thus refused to preclude a later-arising
damages claim for particular plaintiffs based on their absentee class-membership in
an earlier “global settlement” because, among other things, the plaintiffs “likely
!"#$% '()*+,' -./01$23% 456 7"8$% ;6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 109/512
43
received inadequate notice” of the class action and thus inadequate opportunity to
opt out. Id. at 261 n.8 (citing Shutts, 472 U.S. at 812). And that was true despite
the fact that the court that initially approved the Stephenson settlement was
virtually certain that these contingent monetary claims would not arise. Id. at 261.
These holdings confirm the commonsense point that claims accurately
described as “claims for money damages that arise in the future” are, of course,
claims for money damages and thus a species of individualized legal claim for
purposes of the Due Process Clause and the unanimous holding in Dukes. Indeed,
the fact that the settlement releases future damages creates an unavoidable
constitutional dilemma. As the Supreme Court has recognized, such releases
impermissibly negate the one process the Constitution has expressly provided for
the resolution of individualized legal claims: the jury trial. See Ortiz , 527 U.S. at
846 (“ By its nature, … a mandatory settlement-only class action with legal issues
and future claimants compromises their Seventh Amendment rights without their
consent.”) (emphasis added). The same is true, of course, for present objectors that
are actively withholding their consent and trying to preserve their jury trial rights.
!"#$% '()*+,' -./01$23% 456 7"8$% ;* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 110/512
44
C. There is no legitimate justification for denying merchants opt-out
rights.
1.
There is no merit to the district court’s theory that a non-opt-
out class was permissible because the settlement provides its
members no monetary relief.
Although appellants argued at length below that the Due Process Clause and
Rule 23 guaranteed them the right to opt out of this settlement, the district court
dealt with those arguments in only one paragraph. The court held as a matter of
law that “there is no due process right to opt out of the (b)(2) class” because the
“(b)(2) settlement here is limited to going-forward injunctive relief that changes
the structure of the networks’ practices.” SPA46. In other words, the court
determined no opt-out right was necessary because the relief provided to the non-
opt-out class was “injunctive,” rather than monetary. That reasoning fails for two
reasons.
First, whatever the character of the settlement’s relief to the (b)(2) class, it
still extinguishes individualized claims—including claims for money damages—
with no opt-out right. Even the district court effectively acknowledged that the
released claims are inherently individualized. See, e.g., SPA52 (noting judicial
relief on interchange fee claims “would affect the class unequally”). The Due
Process Clause and Rule 23 guarantee the right to opt out with respect to the
resolution of those individualized claims, even if the class gets no relief. Indeed,
that right is especially important if the class has agreed to take nothing in exchange
!"#$% '()*+,' -./01$23% 456 7"8$% ;; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 111/512
45
for forever forfeiting its monetary claims. In such a case, a (b)(2) class has been
impermissibly certified with respect to the class members’ monetary claims, and
those claims have been “ precluded by litigation they had no power to hold
themselves apart from”—the exact thing Dukes forbids. See 131 S. Ct. at 2559.
The district court’s analysis ignores altogether the monetary claims subject
to the mandatory release. The court noted that “[t]o allow [merchants] to opt out
and pursue their own rules-based injunctive relief would eliminate the incentive to
settle that Rule 23(b)(2) was designed in part to create.” SPA46 (emphasis added).
But the release extends well beyond claims for “rules-based injunctive relief”: It
also bars class members from pursuing compensation for any monetary injuries
those practices—or any others in the voluminous rulebooks—have caused or will
cause at any point after November 28, 2012. The settlement thus expressly
releases “all manner of claims … whether individual … or otherwise in nature, for
any … damages or other monetary relief.” SPA169 (Settlement ¶68); SPA90
(Judgment ¶16(c)).
Second, this (b)(2) class was an unnecessary and artificial contrivance that
inverted the design of Rule 23. Echoing Rule 23’s drafters, the Supreme Court has
made clear that subsections (b)(1) and (b)(2) were intended to reflect existing,
“standard” practices in collective litigation, and that “adventuresome” innovations
were confined to Rule 23(b)(3). See, e.g., Amchem, 521 U.S. at 615; Benjamin
!"#$% '()*+,' -./01$23% 456 7"8$% ;+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 112/512
46
Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the
Federal Rules of Civil Procedure, 81 Harv. L. Rev. 356, 394 (1967). This
settlement, which splits a unitary claim in order to create a future-looking,
“injunctive” component—amenable to a global release for all time by a non-opt-
out class—is anything but “standard.” It thus belongs in Rule 23(b)(3). Indeed,
because the relief provided to (b)(3) classes frequently includes injunctions, there
is no need for the “adventuresome” innovation in claim-splitting this case seeks to
inaugurate. See, e.g., Wal-Mart , 396 F.3d at 112-13 (approving substantial
forward-looking relief in class action certified under Rule 23(b)(3)); Literary
Works, 654 F.3d at 249 (same).
In fact, the approval of this settlement would give Rule 23(b)(2) an entirely
new and dangerous function. The only possible purpose of including damages
claims against ongoing and future conduct in a (b)(2) settlement is to extinguish
them; attempting to dole out individualized damages to a (b)(2) class would be an
even more obvious violation of Dukes. Prohibiting the inclusion of such claims in
mandatory class settlements thus provides the only check against a very dubious
practice: allowing the settling plaintiffs to confer on defendants the right to injure
other class members in the future through conduct those other class members
would attack as unlawful if only they had the right to opt out and litigate on their
own. And that, in fact, is the central feature of this settlement: It enables Visa and
!"#$% '()*+,' -./01$23% 456 7"8$% ;, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 113/512
47
MasterCard to pay a fee—the payment to the members of the (b)(3) class—in
exchange for the unfettered right to continue practices that the appellants argue are
against the law, without any threat of future suit from any merchant.
2.
Rule 23(b)(2) does not allow the certification of monetary
claims that arise in the future for the purpose of creating
“litigation peace.”
Ultimately, the district court recognized that extinguishing all possible future
claims against defendants’ ongoing conduct was the sine qua non of the settlement.
It nonetheless believed that the ongoing and future damages claims of absent and
objecting merchants could be mandatorily sacrificed because it was “essential to
providing defendants the litigation peace they legitimately expect[ed] in return for
the settlement of claims.” SPA44. But global peace is not a prize that can be
bought over the objection of class members who prefer to preserve their
individualized legal claims for themselves.
Indeed, the Supreme Court has made perfectly clear that—contrary to the
district court’s suggestion—the mandatory sections of Rule 23 do not exist to
vindicate class-action defendants’ interest in achieving forward-looking global
peace. The only interest in global settlement the Supreme Court has even
suggested might justify the mandatory release of monetary claims arises in “limited
fund” cases under Rule 23(b)(1), where the resolved legal claims would be
terminated anyway because the available monies to pay them would be exhausted
!"#$% '()*+,' -./01$23% 456 7"8$% ;5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 114/512
48
(as in a bankruptcy). See, e.g., Ortiz , 527 U.S. at 839.8 In such cases, terminating
monetary claims is arguably justified because class-wide resolution would give
“the class as a whole the best deal” but would “not give a defendant a better deal
than seriatim litigation would have produced.” Id. But these considerations have
no application here. The only global interest the mandatory release accomplishes
here is to give defendants a better deal than seriatim litigation would produce—
exactly the opposite of the type of necessity that could justify forcing plaintiffs like
appellants to give up the claims that belong to them by constitutional right.
II. The Mandatory Class Lacked The Required Cohesion Of Interests.
The settlement is also invalid for the independent reason that it improperly
bound together, in a mandatory (b)(2) class, millions of diverse merchants with
conflicting interests in both the one claim on which they were granted relief and
the vastly broader collection of claims that the settlement resolved.
A. The greatest degree of cohesion is required for mandatory
settlement classes.
“Cohesion” denotes the overarching requirement that any class defined
under any provision of Rule 23 contain a set of plaintiffs with sufficiently similar
interests to permit representative litigation. See, e.g., Amchem, 521 U.S. at 622-23;
Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 165 (2d Cir. 2001).
8 Notwithstanding the judicial crisis of asbestos claims, Amchem and Ortiz
insisted that the procedural and due process protections of Rule 23 not yield toclaims of exigency. See Ortiz , 527 U.S. at 864; Amchem, 521 U.S. at 605.
!"#$% '()*+,' -./01$23% 456 7"8$% ;4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 115/512
49
The requirement arises primarily from the constitutional interests that are directly
implicated when class-wide representation displaces the right of individuals to
pursue their own interests. See Amchem, 521 U.S. at 621 (“Subdivisions (a) and
(b) focus court attention on whether a proposed class has sufficient unity so that
absent members can fairly be bound by decisions of class representatives.”);
Shutts, 472 U.S. at 812 (“[T]he Due Process Clause of course requires that the
named plaintiff at all times adequately represent the interests of the absent class
members.”).
A court’s inquiry into whether the class is cohesive is accordingly at its most
rigorous where class members are to be bound under Rule 23(b)(2) with no right to
opt out. See, e.g., In re St. Jude Med., Inc., 425 F.3d 1116, 1121 (8th Cir. 2005)
(“Because ‘unnamed members are bound by the action without the opportunity to
opt out’ of a Rule 23(b)(2) class, even greater cohesiveness generally is required
than in a Rule 23(b)(3) class.”).9 Indeed, Rule 23(b)(2) does not provide for notice
or opt-out rights—and the Due Process Clause permits such a regime—only
because, in a properly certified (b)(2) class, the interests of all class members are
so aligned that there is essentially no reason for them to litigate on their own. See
Dukes, 131 S. Ct. at 2559.
9 See also Robinson, 267 F.3d at 165 (similar); Lemon v. Int’l Union of
Operating Eng’rs, 216 F.3d 577, 580 (7th Cir. 2000) (similar); Barnes v. Am.
Tobacco Co., 161 F.3d 127, 142-43 (3d Cir. 1998) (similar).
!"#$% '()*+,' -./01$23% 456 7"8$% +9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 116/512
50
As Dukes explained, Rule 23(b)(2) “applies only when a single injunction …
would provide relief to each member of the class”; it “does not authorize class
certification when each individual class member would be entitled to a different
injunction or declaratory judgment against the defendant.” 131 S. Ct. at 2557.
Thus, both before and after Dukes, courts have rejected class certification under
Rule 23(b)(2) where the class would not derive an indivisible, common benefit
from the injunctive relief being pursued. See, e.g., M.D. ex rel. Stukenberg v.
Perry, 675 F.3d 832, 846 (5th Cir. 2012) (vacating (b)(2) certification order
because district court erred in finding “it irrelevant that some of the class’s
requested relief would not apply to every class member”); Kartman v. State Farm
Mut. Auto. Ins. Co., 634 F.3d 883, 893 (7th Cir. 2011) (“Where a class is not
cohesive such that a uniform remedy will not redress the injuries of all plaintiffs,
class certification is typically not appropriate.”); Casa Orlando Apartments, Ltd. v.
Fed. Nat’l Mortgage Ass’n, 624 F.3d 185, 200 (5th Cir. 2010) (“[F]orty percent of
the class benefiting from an injunction is not sufficient to certify under (b)(2).”).
The fact that defendants’ practices affect all class members is accordingly
insufficient to render the class cohesive, even if class members have certain
complaints in common about those practices. If individual class members would
want to litigate and redress their claims in different ways—particularly because the
case will resolve multiple claims, and the class members’ differing interests in
!"#$% '()*+,' -./01$23% 456 7"8$% +' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 117/512
51
those claims might be traded off against each other—then those claims are not
suitable for (b)(2) treatment. Instead, they are, at best, the kind of “common
questions” that may be certified only under Rule 23(b)(3). See, e.g., Ortiz , 521
U.S. at 854-58 (noting cohesion problem in mandatory class-action settlement
aggregating different kinds of claims).
Among (b)(2) classes, settlement-only classes present the very greatest
cohesion concerns. Divisions in the interests of class members may become
apparent during the course of litigation. By contrast, when the district court is
presented with proposed class definitions only as a part of an already completed
negotiation that will resolve the entire case—and decisions about which claims to
pursue and how some might be sacrificed to secure relief on others have not been
subject to the scrutiny of individual class members during the litigation—those
divisions are more likely to be obscured. As Amchem emphasized, “heightened”
scrutiny is required because “a court asked to certify a settlement class will lack
the opportunity, present when a case is litigated, to adjust the class, informed by
the proceedings as they unfold.” 521 U.S. at 620.
Settlements also create a special risk of trading off class members’ claims
against each other. Consider the classic example of a Rule 23(b)(2) class of
plaintiffs in a civil-rights suit. A hypothetical challenge to a males-only
admissions policy at a single military college could be pursued by a non-opt-out
!"#$% '()*+,' -./01$23% 456 7"8$% +( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 118/512
52
class of female applicants. But imagine a broader challenge to all the gender-
specific practices in every branch of the military. Even if such a claim could be
litigated on a class-wide basis, it is highly doubtful such a suit could be settled
through a mandatory (b)(2) class action, given that any effort to resolve the case
would inevitably require trading off some of the plaintiffs’ claims for others. A
lack of cohesion would arise from the competing interests of some class members
who sought, for example, greater gender integration in the Coast Guard and Air
Force, which might be traded for a release of all claims regarding the Army or
Marines, or bargained for different outcomes with respect to medical and combat
personnel. Binding class members on a mandatory basis to such a settlement
violates both Rule 23(b)(2) and the Due Process Clause because it puts the
common class representatives in the position of trading away the interests of one
subset of the class in return for relief for a different group.10
B. The merchants bound to the (b)(2) class in this case were too
diverse for a single, indivisible injunction, and the settlement does
not treat those class members equally.
In Amchem, the Supreme Court described the lack of cohesion of the
asbestos-victim class by saying: “No settlement class called to our attention is as
10 The failure of the proposed class to survive this “heightened attention” doesnot mean that no class action is possible. The most common solutions to cohesion
problems are to form subclasses with separate representation (e.g., Literary Works,654 F.3d at 256), to provide class members with opt-out rights (e.g., Visa Check ,280 F.3d at 147), and/or to narrow the claims involved (or the release granted) soas to bring the interests of the class closer together.
!"#$% '()*+,' -./01$23% 456 7"8$% +6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 119/512
53
sprawling as this one.” 521 U.S. at 624. This case proves that statement outdated.
The two defining features of this (b)(2) settlement are the breadth of the claims
involved and the breadth of the class assembled. Each alone is unprecedented;
together, they make for a manifestly non-cohesive class.
1.
Class members had varying interests in the broad set of claims
that the settlement purported to release.
This appears to be the broadest commercial class ever assembled. While
“the precise size of the class [is] impossible to determine, Class Counsel estimate
that approximately 12 million merchants comprise the class.” SPA23. But those
are only the merchants that existed as of the date of preliminary approval. It does
not count the tens of millions of future merchants that will come into existence
later. All those millions of merchants are likewise bound to the settlement, and
they include every imaginable type of merchant: anyone in the country who sells
any kind of thing in any kind of way or ever might sell anything you can think of
in any way you can conceive—so long as they accept credit cards, as almost every
merchant will. Indeed, since the release lasts forever, the range of merchants
captured by this class is endless.
Accordingly, even the district court acknowledged that members of the
(b)(2) class had different interests in one of the core issues in the case—the setting
of default interchange rates. As the court found, the claims asserted on behalf of
the mandatory class “seek injunctive relief from the bundle of network rules that
!"#$% '()*+,' -./01$23% 456 7"8$% +* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 120/512
54
result in—according to the plaintiffs’ allegations—supracompetitive interchange
fees in violation of the antitrust laws.” SPA46. And yet, as the court expressly
recognized, any “judicial regulation of default interchange fees … would affect the
class unequally.” SPA52 (emphasis added). The court explained that members of
the class had unequal interests in obtaining such relief because “default interchange
operates only in the absence of bilateral agreement, and some of the very large
merchants have sufficient transaction volume that they can actually negotiate for
their own, lower interchange structures.” Id . Thus, even under the district court’s
formulation, different members of the class would have differing interests in a
central claim in the case, depending on their size and business models.
Further, this case—at least as settled—concerned not just one of the
defendants’ practices, nor even several of their rules that relate to interchange fees
identified in the Complaint, but all of the express policies in defendants’ massive
rulebooks, their unwritten policies and practices, and any future rules, policies, or
practices that are “substantially similar.” As counsel for defendants stated at the
fairness hearing, the releases are designed to encompass all of the “rules and
policies and conduct of the defendants to the extent they adversely affect
merchants that accept MasterCard and Visa.” JA[__]{Corrected 9/12/13 Tr. 37-
38}; see also JA[__]{DE2670-8 (Ex. 66 (p. 43))}(Visa General Counsel stating to
!"#$% '()*+,' -./01$23% 456 7"8$% +; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 121/512
55
investors that the release covers “all of Visa and MasterCard’s rules in existence as
of the time of approval.”).
This expands exponentially the lack of cohesion in this settlement-only
class: An already maximally diverse group of merchants will have even more
conflicting interests in determining which rules and practices harm them the most
and should be the subject of any negotiated relief. For that reason, these class
members would certainly not seek an “indivisible” bargain with respect to all those
claims “at once.” Dukes, 131 S. Ct. at 2558. The best evidence of that is the
bargain they got: The class representatives primarily secured relief on one claim
(surcharging) while forever abandoning every other claim of every class member
(such as the core challenges to Honor-All-Cards and default interchange).
Merchants’ diverse interests in the indescribably broad collection of other
claims released by the settlement (some of which have little or nothing to do with
interchange) are likewise illustrative. For example, the FANF rate varies with the
number of merchant locations, so large merchants would be more concerned about
that issue than small ones. JA[__]{DE2670-8 (Ex. 84 (pp. 318-21))}. Some
merchants operate in industries that are so competitive that surcharging is highly
unlikely. Some merchants may be well-suited to rolling out mobile-payment
technology, and would be much more concerned with releasing such claims than
their competitors. In a settlement that concerns every written and unwritten
!"#$% '()*+,' -./01$23% 456 7"8$% ++ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 122/512
56
network practice and a class of every conceivable type of merchant, this list goes
on and on and on.
In sum, the cohesion analysis must take account not only of the variations
among the members with respect to the relief they obtained, but also of every claim
they have given up, and the balance struck by the settlement of the case as a whole.
From that vantage, it is hard to imagine a class less cohesive than this one.
2. Class members had varying interests in the one claim on which
limited relief was actually provided.
The variance among the interests of the (b)(2) class members is best
illustrated by the sole claim on which they obtained any material relief—
surcharging. See supra, at 14-15, 22-23. There is no dispute that the class
members have conflicting interests in surcharging: The district court itself
acknowledged it.
The district court recognized that many merchants that do want to surcharge
cannot—this settlement notwithstanding. The court found that laws ban merchants
from surcharging in at least ten states. SPA40.11
The only “injunctive” relief that
is even arguably material thus does not apply to the merchants in those states at
all—it is as if the settlement had an explicit clause excluding them. The district
11
The district court cited nine, including some of the nation’s largest— California, Florida, and Texas. New York’s surcharging ban has been struckdown, but that decision is currently on appeal to this Court. JA[__]{appellatedocket}. Utah has subsequently enacted a surcharging ban. SPA231.
!"#$% '()*+,' -./01$23% 456 7"8$% +, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 123/512
57
court accordingly recognized, with significant understatement, that those laws
would “diminish, at least in the near term, the efficacy of the proposed relief” for
some of the class. Id .
The clearest possible example of a class lacking common interest in a claim
is where—as here—relief on that claim will not apply to certain members as a
matter of law. As this Court has held, when “variations in state law might cause
class members’ interests to diverge,” a “district court should pay particular
attention to … Rule 23’s requirements ‘designed to protect absentees by blocking
unwarranted or overbroad class definitions.’” In re Am. Int’l Grp. Sec. Litig., 689
F.3d 229, 243 (2d Cir. 2012); see also Amchem, 521 U.S. at 624 (noting that
“[d]ifferences in state law” undermine class cohesion).
The class’s lack of cohesion is equally demonstrated by the settlement’s
most-favored-nation provision. Some merchants accept only Visa and MasterCard
credit cards. But nearly 70% of merchants accept American Express, which
separately prohibits surcharging, and those merchants comprise over 90% of
credit-card transaction volume nationwide. JA__{DE2111-1 at 48-49}; JA__
{DE2670-5, ¶65}. As the district court and its appointed expert recognized, all
those merchants would be prohibited from surcharging Visa and MasterCard under
the terms of the settlement and their contracts with American Express. See SPA42
(finding that, “merchant restraints imposed by American Express” would, like
!"#$% '()*+,' -./01$23% 456 7"8$% +5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 124/512
58
“state laws,” also “undermine the [surcharging] relief”); SPA41 (because of
existing agreements, “most merchants will, as a practical matter, be precluded from
surcharging Visa and MasterCard products.”). Those merchants obviously have
much less interest in how the surcharging claim is resolved than the subset of
members that accept only Visa and MasterCard.
The value of the surcharging relief also varies among merchants with
different business models. The court explained that “many merchants, for reasons
sufficient to them, may choose not to avail themselves of the right to surcharge.”
SPA36. By contrast, “the major airlines” seemed to be more sanguine about the
value of surcharging than other classes of merchants, including “smaller retailers,
such as grocery stores and convenience stores,” which were more likely to have
objected or opted out. SPA23-24. The district court took this as evidence that the
surcharging relief had some value for purposes of assessing the fairness of the
settlement and the reaction of the class. Id. But it failed to recognize the point that
matters under Rule 23(b)(2): The different class members’ divergent valuations
demonstrated the class’s lack of cohesion. Even if surcharging did have some
value to certain members of the class, forcing airlines and grocery stores to accept
the same bargain, negotiated by a single set of representatives, far exceeded what
Rule 23(b)(2) allows.
!"#$% '()*+,' -./01$23% 456 7"8$% +4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 125/512
59
Despite recognizing the barriers to surcharging that many class members
faced, the district court held that “the fact that some merchants may elect not to
avail themselves of the rule, or are prohibited by factors beyond the scope of this
lawsuit from surcharging, does not undermine my conclusion that the class is
sufficiently cohesive.” SPA 52. This reasoning is manifestly incorrect.
Discounting preexisting “factors” affecting the interests of class members as
“beyond the scope of this lawsuit” simply erases all content from the cohesion
analysis. In applying the “heightened attention” required for settlement-only class
certification, a court must of course consider factors such as “[d]ifferences in state
law” and class members’ different, pre-existing circumstances that might
“undermin[e] class cohesion.” Amchem, 521 U.S. at 620, 624. In fact, the only
way to determine cohesion is to ask whether such factors create different interests
among the class with respect to the relief that the lawsuit does control. If the
cohesion inquiry merely asked whether the class members received the same relief,
without regard to preexisting factors affecting its value, then virtually every
settlement class would be “cohesive,” no matter how disparately that relief might
apply. And the district court’s analysis simply ignores that class members with
different interests in surcharging would not bargain for the same surcharging relief,
and so cannot be forced into a single class with respect to this Complaint.
!"#$% '()*+,' -./01$23% 456 7"8$% ,9 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 126/512
60
Surcharging also illustrates that class counsel were not even aware of the
divergent interests of their sprawling collection of millions of clients. Once the
settlement was disclosed, pharmacies objected that they had no “realistic ability” to
surcharge because of restrictive Medicare regulations and prohibitions on
surcharging in their contracts with health insurers and pharmacy benefit managers.
JA[__]{DE 2619 (NCPA Obj. ¶22)}. Similarly, health insurers objected because
the Affordable Care Act requires them to spend a certain portion of premium
revenues on medical services and thus leaves them differently situated from other
(b)(2) class members with respect to surcharging. While the district court
“agree[d] with these objectors that no one thought of their unique concern in
formulating the settlement,” it viewed that as “no reason not to approve it,”
because the insurers’ objections were speculative. SPA48. But this misses the
point: In this representative litigation, “no one thought of their unique concern,”
and therefore no one protected their interests—and because they had no opt-out
rights, they were powerless to protect themselves. A settlement class that is so
sprawling that it does not even recognize the interests it affects obviously fails the
“heightened” cohesion requirement for certification under Rule 23(b)(2).
For all these reasons, the members of the (b)(2) class were differently
situated and would have ascribed very different value to the Complaint’s
underlying surcharging allegations for purposes of negotiating a global settlement
!"#$% '()*+,' -./01$23% 456 7"8$% ,' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 127/512
61
of claims. This settlement plainly violated Dukes’ holding that “Rule 23(b)(2)
applies only when a single injunction … would provide relief to each member of
the class.” 131 S. Ct. at 2257. The district court’s conclusion that the class is
nonetheless cohesive for purposes of Rule 23(b)(2) is wrong as a matter of law.12
3.
The relief on the Complaint’s surcharging claim does not
constitute an indivisible injunction.
The relief on the surcharging claim is furthermore forbidden by Rule
23(b)(2) because it is not an “indivisible injunction benefitting all [class] members
at once.” Dukes, 131 S. Ct. at 2558. Indeed, the relief provided on this claim is
divisible on its face. The settlement expressly provides that “[n]othing in this
Class Settlement Agreement shall prevent the … Defendants from contracting with
merchants not to surcharge.” SPA149, 162-63 (Settlement ¶¶42(f), 55(f)). In other
words, defendants remain free to balkanize the class after the fact, and exploit
bargaining leverage (which will surely be greater as to some merchants than
12 Another minor “rules change” in the settlement further demonstrates the
district court’s inattention to the class’s lack of cohesion. The settlementauthorizes merchants that operate multiple businesses under different “tradenames” to accept Visa and MasterCard on a trade-name basis. SPA13; SPA140-41, 153-54 (Settlement ¶¶41, 54). This relief is useless to small businesses thatoperate under one name and so represents another unsurprising divergence in aclass that includes everything from YUM! Brands (KFC, Taco Bell, Pizza Hut) tothe local pizza shop. But it also creates tensions even among large-volume
merchants: Gap Inc. operates six brands with very different business models; TheHome Depot conducts the vast majority of its business under one banner. Thecourt did not even address whether this relief will benefit each member of theclass, and it obviously will not.
!"#$% '()*+,' -./01$23% 456 7"8$% ,( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 128/512
62
others) to create a system in which the allegedly common practice that underlies
(b)(2) certification becomes uncommon once again.
This provision of the settlement leaves defendants free to bargain
individually with strategic merchants whose national prominence might actually
allow their surcharging practices to pose a threat to defendants’ inflated rates.
Those merchants can be offered a private, individualized deal to avoid the class-
wide benefit that the district court repeatedly invoked. See, e.g., SPA38
(speculating that surcharging might reduce interchange rates on a nationwide
basis). For example, if a large merchant who is an industry leader in a segment
(say, McDonald’s) decides to pursue surcharging, defendants can offer that
merchant a break on its interchange rates in exchange for its agreement not to
surcharge. For competitive reasons, smaller merchants that vie with McDonald’s
for customers would then be discouraged from surcharging. This may bring down
the rate for McDonald’s, but certainly not for the whole industry, let alone the
whole class of millions of merchants. Whatever benefits surcharging may produce,
it is the isolated merchants that may be able to surcharge who “will realize the
greatest savings.” See, e.g., JA[__]{DE2111-5 (Frankel Decl. ¶68)}. This result is
not an indivisible injunction providing a common benefit to the class as a whole.
!"#$% '()*+,' -./01$23% 456 7"8$% ,6 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 129/512
63
C. The district court’s cohesion analysis ignored these flaws.
The district court’s opinion addressed the cohesiveness of the (b)(2) class in
only a single page. The court concluded that the class was cohesive because “[t]he
network rules regimes that gave rise to this case applied generally to every
merchant accepting Visa and MasterCard credit cards.” SPA51. But that is true
only in a superficial way—in the same irrelevant sense in which, for example, the
set of all Wal-Mart employee policies and practices could be said to “apply
generally” to “every” Wal-Mart employee. See Dukes, 131 S. Ct. at 2551-57. The
network rules consist of thousands of pages of different policies, and countless
more unwritten practices, with greatly varying impacts on the different merchants
based on, for example, business models, market conditions, and state and federal
laws. In such a wide-ranging settlement, there are inevitably innumerable issues—
including contractual and regulatory obligations—that affect particular class
members’ abilities to derive value from relief on particular claims, and yet will
escape the attention of class counsel and representatives.
The district court also thought that, “by focusing the settlement efforts on the
merchant restraints [i.e., surcharging], as opposed to, for example, default
interchange, … Class Plaintiffs have enhanced the cohesion of the class” because
regulation of default interchange “would affect the class unequally.” SPA52. The
problem with that reasoning is that the settlement efforts were focused on default
!"#$% '()*+,' -./01$23% 456 7"8$% ,* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 130/512
64
interchange—the district court approved a class settlement that released all claims
forever regarding default interchange, along with everything else in the Visa and
MasterCard rulebooks. The requirements of the Due Process Clause and Rule 23
exist to protect those claims from being resolved without adequate representation
and effective consent, whether or not the class obtains any relief. Indeed, those
protections are especially relevant if the class will not receive any relief on the
claim being resolved. Accordingly, the settlement efforts were no more “focused”
on the merchant restraints than they were on default interchange; the only
difference was who got relief and who gave up (or, more accurately, was forced to
give up) the respective kinds of claims.
The district court’s error in this regard is similar to one the Supreme Court
identified in Ortiz . There, the plaintiffs attempted to establish cohesion by
demonstrating a shared interest in the common fund created by the settlement. But
the Supreme Court held that “the determination whether ‘proposed classes are
sufficiently cohesive to warrant adjudication’ must focus on ‘questions that
preexist any settlement.’” Ortiz , 527 U.S. at 858 (quoting Amchem, 521 U.S. at
622-23). The same is true here: The cohesiveness of the class must be determined
by reference to the entire set of claims that the class could have pursued, not just
the particular relief that the settlement provided in the end.
!"#$% '()*+,' -./01$23% 456 7"8$% ,; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 131/512
65
Similarly, the Court in Ortiz found that conflicting interests of present and
future claimants were not resolved by giving them equal rights to a settlement fund
because their different interests required different treatment—some claims were
more valuable than others. As the Court held: “The very decision to treat them all
the same is itself an allocation decision with results almost certainly different from
the results that those with immediate injuries or claims of indemnified liability
would have chosen.” 527 U.S. at 857; see also Literary Works, 654 F.3d at 253
(similar). Here, too, the decision to grant all merchants a limited right to surcharge
is a “result[] almost certainly different from the results that” merchants that are
precluded from surcharging “would have chosen”—especially in light of the
different value many different members in this class of millions would ascribe to
the claims being given up in exchange.
In short, this case does not involve a class with a claim that calls for a single,
class-wide remedy necessarily benefitting each member of the class at once.
Instead, whatever possible benefits injunctive relief might have here would fall
(and do fall) unequally on class members, while the settlement simultaneously
releases a host of claims with different values to those same members. For this
reason, many different members of the class would have pursued a radically
different settlement. In such a case, while it might be possible to certify a class
!"#$% '()*+,' -./01$23% 456 7"8$% ,+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 132/512
66
under Rule 23(b)(3), there is no permissible way to force the settlement on
objecting class members under Rule 23(b)(2).
III.
The Settlement Violates The Requirement Of Rule 23(a)(4) That The
Class Members Receive Adequate Representation.
This Court should also hold that the settlement is unlawful because the
structure of the settlement negotiations deprived the class members of adequate
representation. Most obviously, the (b)(2) class that received so little in exchange
for its sweeping release was represented by those who stood to reap colossal
financial benefits by negotiating a larger recovery for the (b)(3) class. Class
members bound to the (b)(2) settlement were not represented by a separate class
representative or lawyer with their interests solely in mind. In reality, the (b)(2)
class was merely the means to an end—obtaining the mandatory release defendants
demanded from all the merchants that might ever sue them as the price of a large
cash payment for the (b)(3) class.
A. Adequate representation requires separate representatives and
counsel for subgroups with divergent interests.
Multiple classes in a single case that have different interests in the outcome
must have separate class representatives and counsel to avoid structural conflicts.
Rule 23(a)(4) allows certification only if “the representative parties will fairly and
adequately protect the interests of the class.” This requirement is related to—but
distinct from—the cohesion requirement discussed in Part II, because an adequate
!"#$% '()*+,' -./01$23% 456 7"8$% ,, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 133/512
67
representative must in fact protect the interests of every class member. Thus, as
with cohesion, an even higher degree of scrutiny is required where individual class
members have no opportunity to opt out and protect those interests for themselves.
See supra, at 49-51.
The principal role of the adequacy requirement is to prevent parties from
determining the rights of absent class members through “a global compromise with
no structural assurance of fair and adequate representation for the diverse groups
and individuals affected.” Amchem, 521 U.S. at 627 (emphasis added).
Accordingly, “[t]he adequacy inquiry under Rule 23(a)(4) serves to uncover
conflicts of interest between named parties and the class they seek to represent.”
Id. at 625.
While the Rule’s text focuses on the named plaintiffs, the Supreme Court
has “recognized that the adequacy of representation enquiry is also concerned with
the ‘competency and conflicts of class counsel.’” Ortiz , 527 U.S. at 856-57 & n.31
(quoting Amchem, 521 U.S. at 626 n.20). For that reason, “an attorney who
represents another class against the same defendant may not serve as class
counsel.” Id. at 856 (citing Moore’s Federal Practice § 23.25[5][e]). Indeed,
following Ortiz and Amchem, the clear rule is that, in any case involving subgroups
with diverse or antagonistic interests, “[o]nly the creation of subclasses, and the
advocacy of an attorney representing each subclass, can ensure that the interests of
!"#$% '()*+,' -./01$23% 456 7"8$% ,5 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 134/512
68
that particular subgroup are in fact adequately represented.” Literary Works, 654
F.3d at 252.
B.
The (b)(2) and (b)(3) classes had antagonistic interests and could
not be adequately represented by common representatives and
counsel.
The merchants whose claims are bound to this settlement have substantially
different interests in the nature of the relief they might receive. Some merchants
have very little interest in prospective rules changes: They may have already
ceased operating, or be shrinking in volume, so that they place far greater emphasis
on obtaining money for past claims now. The opposite is true for merchants that
do not yet exist or growing companies, which are much more concerned with
achieving lasting changes to the networks’ practices as opposed to getting more
money for past injuries. Cf. Amchem, 521 U.S. at 626 (“[F]or the currently injured,
the critical goal is generous immediate payments. That goal tugs against the
interest of exposure-only plaintiffs in ensuring ample [relief] for the future.”).
The negotiation of this settlement brought those conflicting interests into
stark relief. Both the district court and the settling parties recognized that the
defendants would provide a large cash payment for retrospective damages only if
they prospectively received overarching “litigation peace”—that, in particular, any
deal would be contingent on a forward-looking release from the mandatory (b)(2)
class that would extinguish all possible future claims. As Duncan MacDonald,
!"#$% '()*+,' -./01$23% 456 7"8$% ,4 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 135/512
69
independent consultant and former General Counsel for Citigroup’s North
American and European card businesses, candidly explained: “The ‘release’ is a
breathtaking success for the bankcard industry. It is about as comprehensive as
any I’ve ever seen. It should end the industry’s antitrust wars for years to come.”
JA[__]{DE2670-8 (Ex. 67 (p. 52))}(emphasis added).
In other words, defendants would agree to pay money now in exchange for
freedom from future threats of interference with their rules and practices. More
money for the (b)(3) class would buy more peace for defendants. As lead counsel
for the Class Plaintiffs acknowledged at the preliminary approval hearing: “The
negotiations before the mediators were always—one issue was monetary, the other
issue was equitable relief. One was not going to be reached without reaching the
other .” JA[__]{DE1732 (11/9/12 Tr. at 9)}(emphasis added).
But, although the settlement in this case created two classes—one with
greater retrospective interests and another that could only receive prospective
relief—both had the same class representatives and counsel. This was entirely a
problem of the settlement proponents’ own creation. Rather than addressing
tensions among class members in ways required by precedent—providing
members the right to opt out; creating independently represented subclasses for
merchants with different interests; or narrowing the claims the case would
resolve—the representatives created two classes defined by kinds of relief. That
!"#$% '()*+,' -./01$23% 456 7"8$% 59 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 136/512
70
was their strategy to avoid the bar to resolving individualized monetary claims
without an opt-out right. But this strategically crafted structure only gave rise to
another fatal flaw. It created two classes with opposing interests: one seeking a
large monetary award and willing to cede claims arising in the future; and the other
seeking injunctive relief only. Having manufactured this structure, the proponents
of the settlement at the very least were required to ensure that each class received
its own champion and place at the bargaining table.
But there was no named plaintiff with solely the interests of the (b)(2) class
in mind. Instead, the class representatives consisted exclusively of established
merchants with claims on the (b)(3) class settlement, and they represented both
classes in common. Worse still, when a majority of the original named plaintiffs,
including the six trade associations (which themselves had de minimis damages
claims) objected to the balance that settlement negotiations had struck, they were
dropped as representatives with respect to both classes. In other words, in their
role representing the (b)(2) class, class counsel fired their clients and restructured
the representation so that all that remained were class representatives committed to
a deal that gave the (b)(3) class money in exchange for a broad release from the
(b)(2) class. Every single representative that expressed a desire to prioritize the
mandatory (b)(2) settlement over the money was removed from the process.
!"#$% '()*+,' -./01$23% 456 7"8$% 5' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 137/512
71
The representatives that remained naturally prioritized their interest in
monetary relief. In fact, all were ineligible for the surcharging relief that
supposedly justifies the (b)(2) settlement because they operate in states that
prohibit surcharging or accept American Express. JA[__]{DE2670 at 39-40}.
That such merchants approved the settlement, while the trade associations with de
minimis damages and predominating interests in future relief objected, is powerful
evidence of a conflict between past and future claims requiring separate
representation.
Indeed, this structure created the all-too-predictable possibility that the
representatives would trade away the future-looking interests of the mandatory
(b)(2) class in return for more money today—a very nearly zero-sum affair. That
is the exact kind of conflict that Rule 23(a)(4) prohibits. As Ortiz put it: “[I]t is
obvious after Amchem that a class divided between holders of present and future
claims (some of the latter … attributable to claimants not yet born) requires
division into homogeneous subclasses under Rule 23(c)(4)(B), with separate
representation to eliminate conflicting interests of counsel .” 527 U.S. at 856
(emphasis added).
The dilemma was structural. Representatives with present interests simply
cannot fight for the best possible relief for future-looking claims. Even if they did,
they would then fail in their obligation to class members interested in greater
!"#$% '()*+,' -./01$23% 456 7"8$% 5( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 138/512
72
monetary relief. There is no representative that can adequately represent two client
groups with such directly conflicting interests, especially when the members of one
cannot protect themselves by opting out.
The potential for conflict was, if anything, worse for class counsel, whose
stake in the (b)(3) class’s multi-billion dollar recovery had no parallel when it
came to fighting for the (b)(2) class. Indeed, the settlement left in place one of the
best-understood conflicts for counsel in class-action law: letting lawyers with
everything to gain from a monetary settlement on behalf of present claimants
bargain on behalf of future claimants as well. In a closely related context, Ortiz
discussed this problem at length and condemned it as “egregious”:
In this case, … at least some of the same lawyers representing plaintiffs and the class had also negotiated the separate settlement of45,000 pending claims, the full payment of which was contingent on asuccessful Global Settlement Agreement…. Class counsel thus hadgreat incentive to reach any agreement in the global settlementnegotiations that they thought might survive a Rule 23(e) fairnesshearing, rather than the best possible arrangement for the substantiallyunidentified global settlement class. The resulting incentive to favorthe known plaintiffs … was, indeed, an egregious example of theconflict noted in Amchem resulting from divergent interests of the
presently injured and future claimants.
Id. at 852-53 (internal citations and quotations omitted). This case is
indistinguishable: With a fee request representing the largest share of a multi-
billion dollar fund—and with that fund dependent on reaching an agreement that
provided a mandatory release from the (b)(2) class—class counsel faced the natural
!"#$% '()*+,' -./01$23% 456 7"8$% 56 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 139/512
73
incentive to be sure that the deal got done. No class counsel could be expected to
scuttle a multi-billion dollar settlement based on the conviction that the (b)(2) class
was releasing too much in exchange for too little injunctive relief. As Ortiz makes
clear, the law cannot indulge assumptions so contrary to human nature, at least “in
any class action settlement with the potential for gigantic fees.” Id. at 852.
As precedent demonstrates, the absence of separate and adequate
representation for the unique interests of the future-looking (b)(2) class is fatal. In
Amchem and Ortiz , the Supreme Court considered efforts to create global
settlements regarding asbestos-related injuries. A key problem identified in both
cases was the tension between present claimants who had already developed
symptoms from asbestos exposure, and “exposure-only” plaintiffs who were in
jeopardy, but as yet had no injury. The former (like the (b)(3) class here) wanted
the greatest possible relief for existing claims; the latter (like the (b)(2) class here)
wanted the greatest possible protection for future claimants. In both cases, the
Supreme Court insisted on sub-classes with separate representation “to eliminate
conflicting interests of counsel,” and condemned the settlements because “[n]o
such procedure was employed [t]here.” Ortiz , 527 U.S. at 856; see also Amchem,
521 F.3d at 620. “No such procedure was employed here” either.
Perhaps the closest case on point is this Court’s recent rejection of the
settlement in Literary Works on grounds of inadequate representation. There,
!"#$% '()*+,' -./01$23% 456 7"8$% 5* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 140/512
74
digital database owners wanted a global settlement with copyright holders about
the works in the database. The settlement recognized that three different kinds of
copyright claims with different values were at issue, and so it provided different
relief for the three subgroups. It did not, however, provide them separate
representatives in bargaining for that outcome.
Noting that “[o]nly the creation of subclasses, and the advocacy of an
attorney representing each subclass, can ensure that the interests of that particular
subgroup are in fact adequately represented,” this Court rejected the settlement.
Literary Works, 654 F.3d at 252 (emphasis added). Even if class representatives
themselves belonged to each group, and so had some incentive to look out for each
group of claims, “[t]he selling out of one category of claim for another [wa]s not
improbable.” Id . To avoid that risk, each subgroup needed its own representative
and its own separate counsel, so there was always someone who “advanced the
strongest arguments in favor of [each category’s] recovery.” Id. at 253. And yet
that feature is as absent here as it was in Literary Works.
C. There is no substitute for independent and adequate
representation.
The settlement proponents and the district court offered two responses to the
failure to provide independent representation to the (b)(2) class here. Both are
unpersuasive and confirm that this settlement fails to satisfy Rule 23(a)(4).
!"#$% '()*+,' -./01$23% 456 7"8$% 5; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 141/512
75
1.
Overlap
The district court evidently believed that the class representatives could
represent both classes because they were members of both classes. See SPA52
(“The Class Plaintiffs adequately represent both the (b)(2) and the (b)(3) settlement
classes.”). This Court has already rejected that interpretation of Rule 23(a)(4) in a
discussion the Supreme Court adopted wholesale in Amchem:
[W]here differences among members of a class are such that
subclasses must be established, we know of no authority that permits acourt to approve a settlement without creating subclasses on the basisof consents by members of a unitary class, some of whom happen to
be members of the distinct subgroups. The class representatives maywell have thought that the Settlement serves the aggregate interests ofthe entire class. But the adversity among subgroups requires that themembers of each subgroup cannot be bound to a settlement except by
consents given by those who understand that their role is to represent
solely the members of their respective subgroups.
521 U.S. at 627 (quoting In re Joint E. and S. Dist. Asbestos Litig., 982 F.2d 721,
743 (2d Cir. 1992)) (emphasis added); see also Eubank v. Pella Corp., 2014 WL
2444388, *3 (7th Cir. June 2, 2014) (calling a single set of representatives agreeing
to nationwide settlement on behalf of two subclasses a “red flag[]”). It is thus
dispositive that in the negotiation of this settlement, there has never been any class
counsel or class representative who has bargained solely for the benefit of the
(b)(2) class.
Moreover, the “overlap” between the (b)(2) and (b)(3) classes should not be
misunderstood or overstated. As an initial matter, the membership is not the same:
!"#$% '()*+,' -./01$23% 456 7"8$% 5+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 142/512
76
There are tens of thousands of now-defunct merchants belonging only to the (b)(3)
class; and there are millions of other merchants that have been newly created, will
be created in the future, or opted out, and thus belong only to the (b)(2) class.13
The problem is exemplified by future merchants that start their businesses
after 2021, when the settlement relief expires. Such merchants will have no right
to complain about any Visa or MasterCard practice that is “substantially similar” to
any aspect of today’s rulebook or current unwritten practices. Those unlucky
future merchants do not even exist yet, but this settlement has already deprived
them of all the claims they might ever have against Visa and MasterCard. What
will they have received in exchange? Literally nothing. Meanwhile, existing
merchants founded after November 2012 may be able to surcharge—for a few
years, if they operate in the right state, and they don’t take American Express—but
unlike the class representatives who purported to act on their behalf, they have no
claim whatsoever on defendants’ settlement fund.
Failing to provide separate representation to this enormous class of future
merchants is an egregious version, on an even-shorter time frame, of the
13 It is easy to miss the size of the future merchant class whose interests the
settlement completely ignored. The number of new firms founded in the UnitedStates each year is in the hundreds of thousands. Accordingly, the class of future
merchants launching after the settlement date—merchants who would have nointerest in a monetary settlement—will likely include many millions of members.That class alone would be among the most sprawling commercial classes evercertified.
!"#$% '()*+,' -./01$23% 456 7"8$% 5, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 143/512
77
representation problem identified in Stephenson. There, Agent Orange claimants
who did not discover their injuries until after 1994 were left uncovered by a 1984
settlement. See 273 F.3d at 260-61. This Court found that, because they lacked
effective representation in the 1984 settlement, the Due Process Clause prohibited
applying the judgment to them. That a similar class of millions here received no
independent consideration or voice in the settlement makes absolutely clear that
the representation afforded to the (b)(2) class did not measure up to the necessary
standard according to the four-square holdings of precedents like Stephenson,
Literary Works, Amchem, and Ortiz . Representatives focused exclusively on the
(b)(2) class’s interests would not have left such future interests out in the cold.
Those who opted out of the (b)(3) class here likewise deserve special
attention because they demonstrate the deep structural anomaly of this case. In a
typical (b)(3) case, there is little concern regarding class counsel’s representation
of those plaintiffs who have opted out, at least once they have left the case: Their
claims are no longer subject to adjudication by representation, and they can hire
their own lawyers to protect their own interests in opt-out litigation. But here,
those that opted out of the (b)(3) class remained bound as members of the (b)(2)
class to the very attorneys and class representatives who negotiated the settlement
the opt-outs were rejecting as members of the (b)(3) class. In fact, those
representatives were exclusively parties and lawyers who, unlike the (b)(3) opt-
!"#$% '()*+,' -./01$23% 456 7"8$% 55 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 144/512
78
outs, remained interested in the money that could be obtained by trading away the
rights of the (b)(2) class for a global settlement. Accordingly, as members of the
(b)(3) class opted out but remained bound to the (b)(2) class, the misalignment of
their interests with those of their representatives only became worse.
2.
Results
Although both class counsel and the district court touted the magnitude of
the monetary settlement, the results of the negotiations in no way suggest that the
(b)(2) class received adequate representation. Positive results, even if “fair” to all
members, are no substitute for adequate representation. See, e.g., Literary Works,
654 F.3d at 253 (“The rationale is simple: how can the value of any subgroup of
claims be properly assessed without independent counsel pressing its most
compelling case?”). In any event, the results here are unfair, which furnishes
additional evidence of the (b)(2) class’s inadequate representation. See id. at 252-
54 (noting that Amchem permits courts to find Rule 23(a)(4) violations based on
settlement results).
Other briefs discuss the fairness of the settlement as such, but it suffices for
these purposes to focus on just one comparison. As detailed above, supra, at 15-
17, 22-23, the (b)(2) class obtained (at best) some relatively inconsequential rule
changes in exchange for a dramatic release of claims. The (b)(3) class, meanwhile,
got billions of dollars.
!"#$% '()*+,' -./01$23% 456 7"8$% 54 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 145/512
79
This comparison reflects poorly on the representation of the (b)(2) class, and
eviscerates the district court’s rationale for concluding that the settlement was fair
with respect to those class members. For example, the district court repeatedly
emphasized its belief that the class claims faced hurdles to success on the merits.
But that reasoning cannot explain the stark contrast between the size of the cash
settlement for the (b)(3) class and the narrowness of the relief for the (b)(2) class.
Each class’s claims would have similar merit, as they are distinguished only by the
date on which the damages accrue.
Ultimately, it is clear that the (b)(2) class was a means to the broader end of
global resolution, not an end in itself with rights that received independent and
adequate representation. The settlement fund in this case is large14
and as the
outcome fully attests, there was simply no structural assurance that class
representatives and counsel with a claim against that sum had a sufficient incentive
to prevent the (b)(2) class’s interests from being sacrificed in its pursuit. If
anything, that sum’s size simply shows the value to defendants created by the
mismatch between the (b)(2) class’s broad and mandatory release of future claims
and the meager future-looking relief that the (b)(2) class secured.
14 To the banks, of course, the amount is relatively inconsequential—less than
two months’ worth of interchange fees.
!"#$% '()*+,' -./01$23% 456 7"8$% 49 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 146/512
80
IV. By Releasing All Future Antitrust Claims, Including Claims That Far
Exceed The Scope Of The Complaint, The Settlement ViolatesControlling Precedent And Exceeds The Power Of A Federal Court.
The settlement separately fails because the (b)(2) release exceeds the
permissible scope of a class-action settlement. The effect of that release is to
immunize Visa and MasterCard from future antitrust challenges, as well as an
array of other claims that could not have been resolved by the Complaint. That
release extends broadly in both time and subject matter—sweeping aside
essentially all present and future claims that merchants may have, but granting only
limited relief—whether or not the extinguished claims are ripe or have anything to
do with the core complaints in the case. Putting to the side that this is bad antitrust
policy, it is not the proper business of settling parties and federal courts.
A. The settlement unlawfully releases future antitrust claims.
This Court has long recognized that antitrust claims are uniquely laden with
public concerns. In American Safety, for example, this Court explained that “[a]
claim under the antitrust laws is not merely a private matter. The Sherman Act is
designed to promote the national interest in a competitive economy; thus, the
plaintiff asserting his rights under the Act has been likened to a private attorney-
general who protects the public’s interest.” Am. Safety Equip. Corp. v. J. P.
Maguire & Co., 391 F.2d 821, 826 (2d Cir. 1968). That is so because “[a]ntitrust
violations can affect hundreds of thousands—perhaps millions—of people and
!"#$% '()*+,' -./01$23% 456 7"8$% 4' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 147/512
81
inflict staggering economic damage.” Id. The Supreme Court has thus affirmed
that private agreements cannot waive future antitrust claims without violating
public policy. See, e.g., Italian Colors, 133 S. Ct. at 2310; Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637 n.19 (1985) (If a private
agreement “operated … as a prospective waiver of a party’s right to pursue
statutory remedies for antitrust violations, we would have little hesitation in
condemning the agreement as against public policy.”).
This doctrine is fully applicable to settlement agreements that purport to
resolve future antitrust claims under the auspices of a federal court. In Lawlor , 349
U.S. at 328-29, the Supreme Court stated that “extinguishing claims which did not
even then exist and which could not possibly have been sued upon in the previous
case … would in effect confer on [defendants] a partial immunity from civil
liability for future violations.” The Court then held that, given “the public interest
in vigilant enforcement of the antitrust laws through the instrumentality of the
private treble-damage action,” conferring such “a partial immunity from civil
liability for future violations … is consistent with neither the antitrust laws nor the
doctrine of res judicata.” Id . at 329. Accordingly, even though the suit in Lawlor
was brought by the very same plaintiffs who had earlier settled a case brought on
the same antitrust theory, the Court reversed a decision giving that settlement
preclusive effect as to the same conduct undertaken after the settlement date. Id.
!"#$% '()*+,' -./01$23% 456 7"8$% 4( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 148/512
82
Federal courts since Lawlor have consistently disapproved settlements that
purported to absolve parties from liability for future violations of the antitrust laws.
See, e.g., Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 250
(7th Cir. 1994); Three Rivers Motor Co. v. Ford Motor Co., 522 F.2d 885, 896
n.27 (3d Cir. 1975); Gaines v. Carrollton Tobacco Bd. of Trade, Inc., 386 F.2d
757, 759 (6th Cir. 1967); Fox Midwest Theatres, Inc. v. Means, 221 F.2d 173, 180
(8th Cir. 1955); Minn. Mining & Mfg. Co. v. Graham-Field, Inc., 1997 WL
166497, *3 (S.D.N.Y. Apr. 9, 1997).
The (b)(2) release in this case violates Lawlor and Soler by waiving antitrust
claims with respect to future conduct. As discussed, it applies to all of defendants’
present rules and unwritten practices, as well as any new rules or conduct that are
“substantially similar.” SPA171 (Settlement ¶68(g)-(h)). The release also
expressly bars claims concerning the “future effect” of that conduct, even if
competitive conditions change dramatically. Id.; SPA173-74 (Settlement ¶71);
supra, at 16-17. From defendants’ perspective, this was the whole point. Supra, at
69.
B.
The settlement unlawfully releases claims beyond the scope of the
present litigation.
Because the settlement is a private agreement conferring antitrust immunity,
the Court could simply stop there and invalidate it under Lawlor and Soler . But
that would severely understate the scope of the problem. This is not merely a
!"#$% '()*+,' -./01$23% 456 7"8$% 46 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 149/512
83
private agreement by one party not to sue another in the future for a violation
affected with the public interest; instead, it is a mandatory settlement that prevents
merchants—the parties most susceptible to defendants’ market power—from
challenging anticompetitive conduct forever . That converts the settlement from a
private agreement that violates the antitrust policy of the United States into one
that actively tries to make industrial policy for the whole United States credit-card
market. The implications for consumers in the form of higher credit card fees and
higher prices for goods are obvious. Settled principles of class-action law prevent
such a broad, future-looking release of claims.
This Court has held that any release in a class-action settlement is limited to
the claims that could be precluded by a judgment against the class following a trial.
See Nat’l Super Spuds, Inc. v. N.Y. Mercantile Exch., 660 F.2d 9, 16-18 (2d Cir.
1981) (Friendly, J.) (“If a judgment after trial cannot extinguish claims not asserted
in the class action complaint, a judgment approving a settlement in such an action
ordinarily should not be able to do so either.”); Literary Works, 654 F.3d at 247
(class release may not extend beyond “claims that were or could have been pled”).
This limitation is referred to as the “identical factual predicate” doctrine, and it
limits class-action releases to only those claims that were pled or could have been
pled on the precise facts before the court. See, e.g., TBK , 675 F.2d at 460.
!"#$% '()*+,' -./01$23% 456 7"8$% 4* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 150/512
84
This doctrine imposes two kinds of limitations. First are limits in time: A
settlement cannot release future claims based on later arising facts not yet before
the court. Second are limits in scope: A settlement cannot release kinds of claims
beyond those properly at issue in the case. The settlement in this case contravenes
both limitations.
1.
The settlement improperly releases unripe future claims.
Claims related to future conduct are unripe—the conduct has not happened
yet—and so fall outside the jurisdiction of the court and the factual predicates of
the class-action case before it. See, e.g., Prime Mgmt. Co., Inc. v. Steinegger , 904
F.2d 811, 816 (2d Cir. 1990) (“While a previous judgment may preclude litigation
of claims that arose ‘prior to its entry, it cannot be given the effect of extinguishing
claims which did not even then exist and which could not possibly have been sued
upon in the previous case.’”) (quoting Lawlor , 349 U.S. at 328). Indeed, releasing
future conduct that occurs in an unknown factual context poses severe dangers to
class members—especially where, as here, they have no opportunity to protect
themselves by opting out. See generally James Grimmelmann, Future Conduct
and the Limits of Class-Action Settlements, 91 N.C. L. Rev. 387 (2013) (explaining
dangers associated with allowing class-action settlement agreements to release
future conduct).
!"#$% '()*+,' -./01$23% 456 7"8$% 4; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 151/512
85
In Literary Works, this Court suggested that an opt-out class-action
settlement could release future copyright-infringement claims because a trial in
that case would have resolved whether the defendants could legally “continue to
sell and license the works” at issue. See 654 F.3d at 248. But that doctrine cannot
be extended to this case’s damages release for three reasons.
First, unlike the injunctive claim regarding future use in Literary Works,
which by definition was forward-looking, the varied antitrust damages claims
released here depend on market conditions and competitive impacts that can only
be assessed based on existing or past factual circumstances—circumstances that
will likely change in the future and could not possibly have been litigated in this
case. Restraints of trade evaluated under the rule of reason do not ripen into
antitrust violations until anticompetitive effects are shown. See, e.g., E & L
Consulting, Ltd. v. Doman Indus. Ltd., 472 F.3d 23, 29 (2d Cir. 2006).
Second, the claims that were released in Literary Works are always released
in a future-looking way. Copyright claims are amenable to licensing ; indeed, the
settlement was conceived of as a “continuing license.” See 654 F.3d at 247.
Unlike antitrust law, the very essence of copyright is the power to release future
infringement claims in exchange for present consideration. See, e.g.,
Grimmelmann, 91 N.C. L. Rev. at 409-10.
!"#$% '()*+,' -./01$23% 456 7"8$% 4+ 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 152/512
86
Finally, Literary Works —like other cases applying the “identical factual
predicate” doctrine, even outside the context of future claims—was not a
mandatory settlement.15
Not only did it allow class members to opt out, but it
specifically allowed them to withhold a future-looking license and preserve their
statutory right to bar future use of their copyrighted works. 654 F.3d at 247.
Citing Robertson v. NBA, 556 F.2d 682, 686 (2d Cir. 1977), the district court
held that future claims could be released because the legality of defendants’ rules
was an “unsettled question.” SPA45. But Robertson is inapposite. It addresses a
different doctrine that would condemn even a settlement confined to the matters
properly before the court if it allowed the perpetuation of clearly illegal behavior.
See Robertson, 556 F.2d at 686. Robertson, which predates Super Spuds, in no
way suggests that a class-action settlement can release claims regarding future
conduct not before the court so long as the conduct is arguably kosher. As Judge
Friendly recognized in Super Spuds, the issue is not just the legality of the conduct
released, but the extent to which that conduct is subject to the power of the court
15 See, e.g., Wal-Mart , 396 F.3d at 112 (agreeing with analysis in prior case
that release “was not problematic” because, inter alia, it provided class members“the opportunity to opt out”); Weinberger v. Kendrick , 698 F.2d 61, 77 (2d Cir.
1982) (distinguishing Super Spuds on grounds that released claims were added before class certification, and settlement “afforded an opportunity to opt out”);Super Spuds, 660 F.2d at 19 (distinguishing prior case with broad release becauseclass members could opt out).
!"#$% '()*+,' -./01$23% 456 7"8$% 4, 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 153/512
87
and the class representatives, which are both limited to resolving the particular case
or controversy implicated by the facts and claims at bar.
To be sure, courts will frequently have the instinct—even the correct view—
that approving a prospective regime agreed to in a global settlement will achieve
more for the parties or public than disapproving it. But especially in a commercial
case with no opt-out rights, a settlement that attempts to “implement a forward-
looking business arrangement” for an entire industry, “without permission of the
[class members],” simply goes “too far.” Google Books, 770 F. Supp. 2d at 669.
Enforcing the established bars on releasing future antitrust claims not properly
before the court respects the limited role of federal litigation and ensures that class
actions remain a respected tool in the service of proper goals. Conversely,
allowing class actions to release claims against future conduct by all prospective
plaintiffs—as this one does—is an invitation for private parties to engage in
industry-wide regulation that is more likely than not to prioritize parochial goals
over the public good.
2.
The settlement improperly releases present claims beyond the
scope of the case.
Even the present claims that the settlement releases extend well beyond the
“identical factual predicate” of the claims that were actually brought. The district
court recognized the case’s proper scope: it concerned four categories of allegedly
anticompetitive network rules—default interchange rules, certain “anti-steering”
!"#$% '()*+,' -./01$23% 456 7"8$% 45 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 154/512
88
rules, certain “exclusionary” rules, and “Honor-All-Cards” rules—which have
“allow[ed] Visa and MasterCard and the issuing banks to set supracompetitive
default interchange fees.” SPA18-19. At a minimum, the “identical factual
predicate” doctrine would limit a class-action release to such claims alone.
But the releases are in fact much broader. They unambiguously bar claims
based on any of defendants’ current rules and practices—as well as substantially
similar future conduct—not just claims based on the four categories of allegedly
anticompetitive rules and the resultant default interchange fees. Supra, at 15-17.
The releases even purport to bar damages claims concerning the FANF, which
appears nowhere in the Complaint because it was implemented in April 2012, three
years after merits discovery had closed .
The over-breadth of the Rule 23(b)(2) release is exacerbated by the
settlement’s definition of “Rule 23(b)(2) Settlement Class Releasing Parties” as
including “subsidiaries” of any class member, without geographic limitation.
SPA166 (Settlement ¶66); SPA88 (Judgment ¶16(a)). This definition facially
encompasses British supermarket chain ASDA—a subsidiary of appellant Wal-
Mart Stores, Inc.—which is now litigating claims in European Union courts
seeking substantial monetary relief for anticompetitive conduct abroad. See
JA[__]{DE2644 (Wal-Mart Obj. ¶¶56-58)}. Thus, ASDA, which cannot be a
member of either class and receives nothing from the settlement, could face the
!"#$% '()*+,' -./01$23% 456 7"8$% 44 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 155/512
89
argument that its extra-territorial claims, which are well outside this case’s factual
predicate, are subject to the (b)(2) release as well.
The problem goes even deeper. The settlement proponents and the district
court incorrectly portrayed the scope of the release as limited to the factual
predicates of the case because it covers only existing rules and those that are
“substantially similar.” SPA44-47. This fails to recognize that a “rule” could have
very different effects in different factual contexts.
The history of the Honor-All-Cards rules, and defendants’ exploitation of
them to suppress competition, illustrates the point. Honor-All-Cards rules that
were introduced in the 1960s and applied solely to credit cards were utilized by
Visa and MasterCard in the 1990s to extend their market power into the emerging
market for debit transactions—tying practices that resulted in the Visa Check
settlement, which this Court approved. JA[__]{DE455-4 ¶4; DE455-5
¶4}(settlement provisions requiring revisions to Honor-All-Cards to untie debit
from credit).
Here, counsel for defendants made clear that Visa and MasterCard have
every intention to use their Honor-All-Cards rules again as a tying device—this
time by linking mobile payments to payments made with traditional payment
cards. See supra, at 26-27. To the extent they do so, such claims would depend on
future facts, including the extent to which the application of the Honor-All-Cards
!"#$% '()*+,' -./01$23% 456 7"8$% '99 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 156/512
90
rules to mobile payments suppresses competition in those technologies. And this is
only one of innumerable future factual scenarios in which the application of an
“existing” or “substantially similar” rule would result in future conduct with
radically different, anticompetitive effects.
The effect of a mandatory release of claims of such breadth for eternity is to
replace the statutory rights and remedies that Congress has provided with a
privately negotiated, quasi-regulatory regime for the credit-card industry going
forward. As Judge Chin recently recognized, this is not properly the business of
settling parties and federal courts. In Google Books, the court recognized that a
large part of the settlement was directed to “future and ongoing arrangements …
[that] would release Google (and others) from liability for certain future acts.” 770
F. Supp. 2d at 676-77. The court rightly concluded that “this second part of the
[settlement] contemplates an arrangement that exceeds what the Court may permit
under Rule 23,” because it is “an attempt to use the class action mechanism to
implement forward-looking business arrangements that go far beyond the dispute
before the Court in this litigation.” Id. at 677. Such matters, the court noted, are
for Congress, and not the federal courts. The same is true here. Indeed, the result
here looks even more like legislation, because objectors to the Google Books
regime for the future of that industry at least had the right to opt out.
!"#$% '()*+,' -./01$23% 456 7"8$% '9' 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 157/512
91
CONCLUSION
The judgment should be reversed.
Dated: New York, New YorkJune 16, 2014
Respectfully submitted,
/s/ Thomas C. Goldstein
Stephen R. Neuwirth*
Sanford I. WeisburstSteig D. Olson
Cleland B. Welton IIQUINN EMANUEL URQUHART &
SULLIVAN, LLP51 Madison Avenue22nd Floor
New York, NY 10010
Jeffrey I. Shinder †
Gary J. MaloneA. Owen GlistCONSTANTINE CANNON LLP335 Madison Avenue
9th Floor New York, NY 10017
Thomas C. Goldstein*†‡
Eric F. CitronGOLDSTEIN & R USSELL, P.C.
5225 Wisconsin Avenue, N.W.Suite 404Washington, DC 20015
Michael J. Canter ‡
Robert N. WebnerKenneth J. RubinVORYS, SATER , SEYMOUR
AND PEASE LLP52 East Gay StreetColumbus, OH 43215
Gregory A. Clarick ‡
CLARICK GUERON R EISBAUM LLP40 West 25th Street12th Floor
New York, NY 10010
(Parties listed on following pages.)
!"#$% '()*+,' -./01$23% 456 7"8$% '9( 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 158/512
92
* Attorneys for Objector-Appellant Home Depot U.S.A., Inc.
† Attorneys for Plaintiffs-Appellants
Coborn’s Incorporated; D’Agostino Supermarkets, Inc.; Jetro Holdings, LLC;
Affiliated Foods Midwest Cooperative, Inc.; National Association of Convenience
Stores; National Community Pharmacists Association; National Cooperative
Grocers Association (NCGA); National Grocers Association; National
Restaurant Association; and NATSO Inc.;
And for Objectors-Appellants
7-Eleven, Inc.; Academy, Ltd. d/b/a Academy Sports Outdoors; Aldo US Inc.
d/b/a Aldo and Call It Spring; Alon USA, LP (Alon Brands); Amazon.com, Inc.;
American Eagle Outfitters, Inc.; Barnes & Noble, Inc.; Barnes & Noble College
Booksellers, LLC; Best Buy Stores, L.P.; BJ’s Wholesale Club, Inc.; The William
Carter Company (Carter’s); Costco Wholesale Corporation; Crate & Barrel Holdings, Inc.; Darden Restaurants, Inc.; David’s Bridal, Inc., DBD Inc. and
David’s Bridal Canada Inc.; Dick’s Sporting Goods, Inc.; Dillard’s, Inc.; Family
Dollar Stores, Inc.; Drury Hotels Company, LLC; Foot Locker, Inc.; Gap Inc.;
GNC Holdings, Inc. (General Nutrition Corporation); Genesco Inc.; The
Gymboree Corporation; HMSHost Corporation; IKEA North America Services,
LLC; J. Crew Group, Inc.; Kwik Trip, Inc.; Lowe’s Companies, Inc.; Marathon
Petroleum LP; Martin’s Super Markets, Inc.; Michaels Stores, Inc.; National
Railroad Passenger Corporation d/b/a Amtrak; Nike, Inc.; Panda Restaurant
Group, Inc.; Panera Bread Company; P.C. Richard & Son, Inc.; PETCO Animal
Supplies, Inc.; PetSmart, Inc.; RaceTrac Petroleum, Inc.; Recreational
Equipment, Inc. (REI); Roundy’s Supermarkets, Inc. d/b/a Pick ‘N Save,
Rainbow, Copps, Metro Market and Mariano’s; Sears Holdings Corporation;Speedway LLC; Starbucks Corporation; Stein Mart, Inc.; Thermo Fisher
Scientific Inc.; The Wendy’s Company; The Wet Seal, Inc.; Whole Foods Market,
Inc.; Zappos.com, Inc.; Fleet Wholesale Supply Co., Inc.; Mills Motor, Inc.;
Mills Auto Enterprises, Inc.; Willmar Motors, LLC; Mills Auto Center, Inc.;
Fleet and Farm of Alexandria, Inc.; Fleet Wholesale Supply of Fergus Falls,
Inc.; Fleet and Farm of Green Bay, Inc.; Fleet and Farm of Menomonie, Inc.;
Mills Fleet Farm, Inc.; Fleet and Farm of Manitowoc, Inc.; Fleet and Farm of
Plymouth, Inc.; Fleet and Farm Supply Company of West Bend, Inc.; Fleet and
Farm of Waupaca, Inc.; Mills E-Commerce Enterprises, Inc.; Brainerd Lively
Auto, LLC; Ashley Furniture Industries Inc.; Beall’s, Inc.; Boscov’s, Inc.; The
Buckle, Inc.; Buc-ee’s Ltd.; The Children’s Place Retail Stores, Inc.; Cracker
Barrel Old Country Store, Inc.; Cumberland Farms, Inc.; Express, LLC; Family
Express Corporation; New York & Company, Inc.; Republic Services, Inc.;
Swarovski U.S. Holding Limited; and The Talbots, Inc.
!"#$% '()*+,' -./01$23% 456 7"8$% '96 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 159/512
93
‡ Attorneys for Objectors-Appellants
Target Corporation; Macy’s, Inc.; Kohl’s Corporation; The TJX Companies, Inc.; Staples, Inc.; J.C. Penney Corporation, Inc.; Office Depot, Inc.; L Brands,
Inc.; Big Lots Stores, Inc.; PNS Stores, Inc.; C.S. Ross Company; Closeout
Distribution, Inc.; Ascena Retail Group, Inc.; Abercrombie & Fitch Co.;
OfficeMax Incorporated; Saks Incorporated; The Bon-Ton Stores, Inc.; Chico’s
FAS, Inc.; Luxottica U.S. Holdings Corp. and American Signature, Inc.
!"#$% '()*+,' -./01$23% 456 7"8$% '9* 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 160/512
94
CERTIFICATE OF COMPLIANCE
This brief complies with this Court’s order dated May 27, 2014 (ECF No.
936), granting leave to file an oversized brief, because it contains 20,992 words,
excluding the parts of the brief exempted by FRAP 32(a)(7)(B)(iii).
This brief complies with the typeface requirements of FRAP 32(a)(5) and
the type-style requirements of FRAP 32(a)(6) because it has been prepared in a
proportionately spaced typeface using Microsoft Word 2007 in 14-point Times
New Roman font.
/s/ Thomas C. Goldstein
!"#$% '()*+,' -./01$23% 456 7"8$% '9; 9+:'+:(9'* '(*4+,( '9;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 161/512
!"#$%&!'()!"#$&+,'-./)0 !"#$&%1'-./)0 !2#$&!3'-./)0 !2#$&1+'-./)0 !2#$&1!'-./)0 !2#$&1"'-./)0
!$#2"'-./)0 !$#!!&'-./)0 !$#!!3'-./)0 !$#!22'-./)0 !$#!1&'-./)0 !$#!13'-./)0 !$#!3"'-./)0!$#!3&'-./)0 !$#"!3'-./)0 !$#""1'-./)0 !$#"$!'-./)0 !$#"1+'-./)0 !$#"%%'-./)0 !$#2+2'-./)0!$#22!'-./)0 !$#2$3'-./)0 !$#$+$'-./)0 !$#$""'-./)0 !$#$$2'-./)0!$#$,+'-./)0 !$#$3&'-./)0
!$#12+'-./)0 !$#1%&'-./)0 !$#1,$'-./)0 !$#%+%'-./)0 !$#%%2'-./)0 !$#,2&'-./)
#$%&#' ()&*#+),)&-#./01)#23#455&,6-#
7/1#$%&#+&8/ *#.(180() ________________
I N R E PAYMENT CARD I NTERCHANGE FEE AND MERCHANT DISCOUNT
A NTITRUST LITIGATION ________________
On Appeal from the United States District Court for the Eastern District of New York
________________
PAGE-PROOF BRIEF FOR PLAINTIFFS-APPELLEES ________________
K. CRAIG WILDFANG THOMAS J. U NDLIN R YAN W. MARTH BERNARD PERSKY ROBINS, KAPLAN, MILLER &
CIRESI L.L.P. 800 LaSalle Avenue Minneapolis, MN 55402
PAUL D. CLEMENT Counsel of Record
JEFFREY M. HARRIS CANDICE C. WONG BANCROFT PLLC 1919 M Street NW Suite 470Washington, DC 20036 (202) 234-0090 [email protected]
Counsel for Plaintiffs-Appellees
(Additional Counsel Listed on Inside Cover)
October 15, 2014
!"#$% '()*+,' -./01$23% ''(* 4"5$% ' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 162/512
H. LADDIE MONTAGUE
MERRILL G. DAVIDOFF MICHAEL J. K ANE BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103
BONNY E. SWEENEY JOSEPH DAVID DALEY ALEXANDRA SENYA BERNAY ROBBINS GELLER RUDMAN &
DOWD LLP 655 West Broadway
Suite 1900 San Diego, CA 92101
JOSEPH GOLDBERG
FREEDMAN BOYD GOLDBERGURIAS & WARD, P.A. 20 First Plaza Suite 700 Albuquerque, NM 87102
Counsel for Plaintiffs-Appellees
!"#$% '()*+,' -./01$23% ''(* 4"5$% ( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 163/512
CORPORATE DISCLOSURE STATEMENT
The parties to this brief complied with Rule 26.1 of the Federal Rules of
Appellate Procedure by submitting a Compendium of Corporate Disclosure
Statements on June 16, 2014. See D.E. 988.
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 164/512
ii
TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT .......................................................... i
TABLE OF AUTHORITIES ....................................................................................iv
INTRODUCTION ....................................................................................................1
STATEMENT OF THE ISSUES .............................................................................. 3
STATEMENT OF THE CASE ..................................................................................4
A. The Payment Card Industry ..................................................................4
B. Eight Years of Hard-Fought Litigation .................................................6
C.
Industry Reforms During, and Due to, the Litigation .......................... 8
D.
Mediation and Settlement ....................................................................11
E. Settlement Review and Approval .......................................................16
SUMMARY OF ARGUMENT ...............................................................................21
STANDARD OF REVIEW ....................................................................................25
ARGUMENT ..........................................................................................................26
I.
The Structure Of The Settlement Classes Conforms Precisely ToBedrock Certification Requirements Under Rule 23. .................................. 26
A. The Rule 23(b)(2) Class Unquestionably Brought Claims For“Indivisible” Relief............................................................................. 27
B. The Rule 23(b)(2) Class Required No Opt-Out Rights; AllClaims for Individualized Monetary Relief Were Separatelyand Properly Certified Under Rule 23(b)(3). ..................................... 36
C. There Is Nothing Improper About Having a Rule 23(b)(2)Class Settlement Foreclose Possible Future Claims SeekingDamages. ............................................................................................40
D.
Both the Rule 23(b)(2) Class and Rule 23(b)(3) Class WereAdequately Represented. ....................................................................47
!"#$% '()*+,' -./01$23% ''(* 4"5$% * '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 165/512
iii
II.
The District Court Acted Well Within Its Broad Discretion In
Finding The Overall Settlement Fair, Reasonable, and AdequateUnder Rule 23(e). .........................................................................................56
A.
The Relief Obtained by the Class is Outstanding. ............................. 57
1. The $7.25 Billion Damages Fund is the Largest-EverCash Relief in an Antitrust Class Action Settlement. .............. 57
2. The Removal of Restraints on Surcharging OffersValuable Relief. ........................................................................60
3.
The Other Injunctive Reforms Offer Valuable Relief. ............. 67
4.
The Settlement Is Not Unreasonable Merely Because ItDoes Not Include All of the Relief Sought byObjectors. .................................................................................70
B. The Standard Release Conforms With All Applicable Law. .............. 72
III.
The District Court Acted Well Within Its Broad Discretion InFinding The Fee Award Reasonable. ............................................................78
IV. The District Court Acted Well Within Its Broad Discretion InFinding The Settlement Notice Reasonable. ................................................ 82
CONCLUSION .......................................................................................................85
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 166/512
iv
TABLE OF AUTHORITIES
Cases
Amchem Prods. v. Windsor ,521 U.S. 591 (1997) .................................................................................... passim
Armstrong v. Bd. of Sch. Dirs.,616 F.2d 305 (7th Cir. 1980) ...............................................................................77
Ass’n For Disabled Ams. v. Amoco,211 F.R.D. 457 (S.D. Fla. 2002) .........................................................................42
Barnes v. Am. Tobacco,
161 F.3d 127 (3d Cir. 1998) ................................................................................33
Bendix v. Midwesco,486 U.S. 888 (1988) ............................................................................................55
Bristol v. Louisiana-Pacific,916 F. Supp. 2d 357 (W.D.N.Y. 2013) ................................................................38
Charron v. Pinnacle Grp.,874 F. Supp. 2d 179 (S.D.N.Y. 2012) .................................................................59
Charron v. Wiener ,731 F.3d 241 (2d Cir. 2013) ...................................................................25, 47, 55
D’Amato v. Deutsche Bank ,236 F.3d 78 (2d Cir. 2001) .......................................................................2, 25, 48
Denney v. Deutsche Bank ,443 F.3d 253 (2d Cir. 2006) ................................................................................47
Detroit v. Grinnell Corp.,495 F.2d 462 (2d Cir. 1974) .............................................................17, 23, 56, 70
Dewey v. Volkswagen,681 F.3d 170 (3d Cir. 2012) .........................................................................54, 55
Easterling v. Dep’t of Corr.,278 F.R.D. 41 (D. Conn. 2011) ...........................................................................38
!"#$% '()*+,' -./01$23% ''(* 4"5$% + '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 167/512
v
Eubank v. Pella,
753 F.3d 718 (7th Cir. 2014) ...............................................................................52
Expressions Hair Design v. Schneiderman,975 F. Supp. 2d 430 (S.D.N.Y. 2013) .................................................................66
Goldberger v. Integrated Resources,209 F.3d 43 (2d Cir. 2000) .......................................................................... passim
Gooch v. Life Investors Ins.,672 F.3d 402 (6th Cir. 2012) ........................................................................38, 55
Handschu v. Special Servs. Div.,605 F. Supp. 1384 (S.D.N.Y. 1985) ............................................................. 63, 70
Handschu v. Special Servs. Div.,787 F.2d 828 (2d Cir. 1986) ...................................................................31, 57, 83
Hecht v. United Collection Bureau,691 F.3d 218 (2d Cir. 2012) ................................................................................43
Huyer v. Wells Fargo,295 F.R.D. 332 (S.D. Iowa 2013) .......................................................................38
In re AIG Sec. Litig .,689 F.3d 229 (2d Cir. 2012) ................................................................................34
!" $% &"$'" (%)*+ ,%$-./0-.% 1 &2!(3 4-0-5*!#$% &' ()**' +, -.+ /('0' 123' +44$5 .................................................................81
In re IKO Roofing Prods. Litig .,757 F.3d 599 (7th Cir. 2014) ...............................................................................30
In re IPO Sec. Litig.,471 F.3d 24 (2d Cir. 2006) ..................................................................................26
In re Johns-Manville,759 F.3d 206 (2d Cir. 2014) .........................................................................77, 78
In re Literary Works Copyright Litig.,654 F.3d 242 (2d Cir. 2011) ........................................................................ passim
!"#$% '()*+,' -./01$23% ''(* 4"5$% , '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 168/512
vi
In re Managed Care Litig .,
2010 WL 6532985 (S.D. Fla. 2010) ...................................................................76
In re Motor Fuel Sales Practices Litig .,271 F.R.D. 263 (D. Kan. 2010) ...........................................................................65
In re NASDAQ Antitrust Litig.,169 F.R.D. 493 (S.D.N.Y. 1996) .........................................................................38
In re Payment Card Interchange Fee Antitrust Litig .,986 F. Supp. 2d 207 (E.D.N.Y. 2013) .................................................................16
In re Payment Card Interchange Fee Antitrust Litig .,991 F. Supp. 2d 437 (E.D.N.Y. 2014) .................................................................20
In re Salomon Analyst Metromedia Litig .,544 F.3d 474 (2d Cir. 2008) ................................................................................26
In re St. Jude Medical ,425 F.3d 1116 (8th Cir. 2005) .............................................................................32
In re Visa Check/MasterMoney Antitrust Litig .,280 F.3d 124 (2d Cir. 2001) ................................................................................43
In re Visa Check/MasterMoney Antitrust Litig.,297 F. Supp. 2d 503 (E.D.N.Y. 2003) ....................................................58, 73, 82
In re Vitamin C Antitrust Litig ., +46+ 78 #+$9#6: /;'0'<'=' +46+5 ...................................................................82
In re Vitamin C Antitrust Litig .,279 F.R.D. 90 (E.D.N.Y. 2012) ...........................................................................38
!" $% 6'$789': (%)* 4-0-5 '!.$$ &' ()**' +, .69 /('0'<'=' +44#5 .................................................................81
Jefferson v. Ingersoll ,195 F.3d 894 (7th Cir. 1999) ...............................................................................36
Jermyn v. Best Buy,276 F.R.D. 167 (S.D.N.Y. 2011) .........................................................................38
!"#$% '()*+,' -./01$23% ''(* 4"5$% : '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 169/512
vii
Joel A. v. Giuliani,
218 F.3d 132 (2d Cir. 2000) ...................................................................26, 51, 57
Kartman v. State Farm,634 F.3d 883 (7th Cir. 2011) ...............................................................................39
LaGarde v. Support.com,2013 WL 1283325 (N.D. Cal. 2013) ........................................................... 63, 68
Lawlor v. National Screen Service,349 U.S. 322 (1955) ............................................................................................76
Masters v. Wilhelmina Model Agency,473 F.3d 423 (2d Cir. 2007) ................................................................................26
Maywalt v. Parker & Parsley Petrol.,67 F.3d 1072 (2d Cir. 1995) ................................................................................58
McBean v. New York ,233 F.R.D. 377 (S.D.N.Y. 2006) .........................................................................58
McReynolds v. Richards-Cantave,588 F.3d 790 (2d Cir. 2009) ............................................................................2, 45
Nat’l Super Spuds v. N.Y. Mercantile Exch. , 660 F.2d 9 (2d Cir. 1981) ....................................................................................74
New England Carpenters Fund v. First DataBank ,602 F. Supp. 2d 277 (D. Mass. 2009) .................................................................59
Nottingham Partners v. Trans-Lux,925 F.2d 29 (1st Cir. 1991) .................................................................................42
Ortiz v. Fibreboard ,527 U.S. 815 (1999) .....................................................................................46, 52
Parsons v. Ryan,754 F.3d 657 (9th Cir. 2014) ...............................................................................28
Petrovic v. Amoco,200 F.3d 1140 (8th Cir. 1999) .............................................................................56
!"#$% '()*+,' -./01$23% ''(* 4"5$% ; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 170/512
viii
Phillips Petroleum v. Shutts,
472 U.S. 797 (1985) ............................................................................................42
Rich v. Martin Marietta,522 F.2d 333 (10th Cir. 1975) .............................................................................28
Robertson v. NBA,556 F.2d 682 (2d Cir. 1977) ................................................................................77
Robinson v. Metro-North,267 F.3d 147 (2d Cir. 2001) ...................................................................31, 39, 44
San Diego Police Officers’ Ass’n v. San Diego City Emps.’ Ret. Sys. ,568 F.3d 725 (9th Cir. 2009) ...............................................................................42
Scarver v. Litscher ,371 F. Supp. 2d 986 (W.D. Wis. 2005) ...............................................................42
Schwarz v. Dall. Cowboys,2001 WL 1689714 (E.D. Pa. 2001) ....................................................................76
Shady Grove Orthopedic v. Allstate,559 U.S. 393 (2010) ............................................................................................46
Soberal-Perez v. Heckler ,717 F.2d 36 (2d Cir. 1983) ...........................................................................25, 82
Stephenson v. Dow Chemical ,273 F.3d 249 (2d Cir. 2001) .........................................................................42, 54
Stinson v. City of N.Y.,282 F.R.D. 360 (S.D.N.Y. 2012) .........................................................................38
Suffolk Cnty. v. Long Island Lighting ,907 F.2d 1295 (2d Cir. 1990) ..............................................................................48
Thompson v. Metro. Life,216 F.R.D. 55 (S.D.N.Y. 2003) ....................................................................58, 85
United States v. E. I. du Pont de Nemours & Co.,366 U.S. 316 (1961) ..............................................................................................9
!"#$% '()*+,' -./01$23% ''(* 4"5$% '6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 171/512
ix
United States v. Local 359, United Seafood Workers,
55 F.3d 64 (2d Cir. 1995) ....................................................................................75
Velez v. Novartis,244 F.R.D. 243 (S.D.N.Y. 2007) .........................................................................38
VKK Corp. v. NFL,244 F.3d 114 (2d Cir. 2001) ................................................................................76
W. Alton Jones Found. v. Chevron,97 F.3d 29 (2d Cir. 1996) ....................................................................................74
Wal-Mart v. Dukes,131 S. Ct. 2541 (2011) ................................................................................ passim
Wal-Mart v. Visa,396 F.3d 96 (2d Cir. 2005) .......................................................................... passim
Weinberger v. Kendrick ,698 F.2d 61 (2d Cir. 1982) ..................................................................................82
Williams v. G.E. Capital ,159 F.3d 266 (7th Cir. 1998) ...............................................................................76
Statutes
2010 Dodd-Frank Wall Street Reform and Consumer Protection Act,
Pub. L. No. 111-203, 124 Stat. 1376 (2010) .......................................................10
15 U.S.C. § 1693o-2.................................................................................................10
28 U.S.C. § 2072(b) ................................................................................................45
Rules
Fed. R. Civ. P. 23(a) .................................................................................................47
Fed. R. Civ. P. 23(b) ......................................................................................... passim
Fed. R. Civ. P. 23(e) ......................................................................................... passim
Fed. R. Civ. P. 23(h) ................................................................................................78
Fed. R. Civ. P. 23 advisory committee notes (1966) .........................................28, 76
!"#$% '()*+,' -./01$23% ''(* 4"5$% '' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 172/512
x
Fed. R. Civ. P. 23 advisory committee notes (1996) ................................................30
Fed. R. Civ. P. 23 advisory committee notes (2003) ...................................37, 49, 50
Other Authorities
Credit Card Interchange Fees: Antitrust Concerns? Hearing Before S.
Comm. on the Judiciary, 109th Cong. (2006) ....................................................61
McLaughlin on Class Actions (10th ed.)..................................................... 32, 41, 85
Newberg on Class Actions (4th ed. 2002) .........................................................34, 83
Wright & Miller, Federal Practice and Procedure (3d ed. 1998) .............. 27, 28, 29
!"#$% '()*+,' -./01$23% ''(* 4"5$% '( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 173/512
INTRODUCTION
This settlement was the culmination of eight years of arms-length, hard-fought
litigation before a highly experienced judge, including four years of adversarial
mediation before two distinguished independent mediators. The settlement secures
up to $7.25 billion in damages, as well as unprecedented, immediately effective
structural reforms of the payment card networks that “may very likely exceed the
value of the monetary relief in the long run.” SPA67. The district court, with its
extensive experience with the relevant issues and knowledge of the litigation,
correctly deemed that settlement a “significant success.” SPA61.
A small group of objectors—many of whom supported a near-identical
version of the settlement submitted to the district court three months before its
execution—claims to be dissatisfied with the scope of structural reforms achieved
as a result of this litigation. Objectors have channeled those frustrations into various
attacks on the settlement classes, suggesting that certification of an injunctive-relief
class alongside a damages class in this action gave rise to “cohesion,” “due process,”
and “adequacy” problems. But many of objectors’ complaints call into question
common and unobjectionable practices, such as litigating Rule 23(b)(2) and 23(b)(3)
classes simultaneously and foreclosing future challenges to agreed-upon, going-
forward conduct. There is absolutely nothing improper about those prototypical uses
!"#$% '()*+,' -./01$23% ''(* 4"5$% '9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 174/512
2
of Rule 23, and the district court considered and properly rejected each of objectors’
arguments.
Objectors’ stated concerns about the structure of the classes ultimately
devolve into complaints about the overall fairness of the settlement. But the district
court, after exhaustive evaluation, approved the settlement as both procedurally and
substantively fair. That fact-intensive determination is well-supported by the robust
structural assurances of fair and adequate representation of all interests in the
proceedings overseen by the two mediators who wholeheartedly endorsed the
settlement. It accords with the settlement’s “massive” and “meaningful” relief,
particularly when measured against the likely complexity, expense, delay, and risk
of proceeding to trial. SPA15, 61. And the district court’s holding is bolstered by
the “‘strong judicial policy in favor of settlements, particularly in the class action
context.’” McReynolds v. Richards-Cantave, 588 F.3d 790, 803 (2d Cir. 2009).
Objectors’ criticisms of the scope of the settlement relief and release do not
come close to a “clear showing that the District Court has abused its discretion.”
D’Amato v. Deutsche Bank , 236 F.3d 78, 85 (2d Cir. 2001). Objectors dramatically
understate the importance of the rule reforms obtained. Those reforms permit
merchants, for the first time ever, to engage in surcharging—a tool by which
merchants can inform customers about the costs of credit card acceptance, direct
customers toward less costly payment methods, and recoup acceptance costs.
!"#$% '()*+,' -./01$23% ''(* 4"5$% '* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 175/512
3
Conversely, objectors dramatically overstate the scope of the settlement’s release of
future claims. That release employs standard language that courts have repeatedly
approved, and the Due Process Clause provides the ultimate assurance that claims
will not—indeed, cannot—be impermissibly released. Objectors’ further challenges
to the reasonableness of the attorneys’ fee award and the settlement notice are
equally meritless.
In short, the settlement reflects a remarkable accomplishment, providing
monetary and injunctive relief of unprecedented value and scope. The district court’s
determinations that the settlement, fee award, and notice were appropriate lie well
within its broad discretion and should be affirmed.
STATEMENT OF THE ISSUES
1. Whether the district court acted within its broad discretion in
concluding that the Rule 23(b)(2) injunctive-relief and Rule 23(b)(3) damages
classes conform with their respective class certification requirements.
2. Whether the district court acted within its broad discretion in approving
the settlement—which included $7.25 billion in money damages and unprecedented
injunctive relief—as “fair, reasonable, and adequate” under Rule 23(e).
3. Whether the district court acted within its broad discretion in
calculating and approving the attorneys’ fee award as reasonable.
!"#$% '()*+,' -./01$23% ''(* 4"5$% '8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 176/512
4
4. Whether the district court acted within its broad discretion in approving
the settlement notice as reasonable.
STATEMENT OF THE CASE
A.
The Payment Card Industry
Visa and MasterCard were created as bank-owned joint ventures a half-
century ago, and were subsequently owned and controlled by the largest banks in the
United States. The banks were members of Visa and MasterCard, owned stock in
Visa and MasterCard, placed representatives on the Visa and MasterCard boards of
directors and committees, and issued Visa and MasterCard payment cards. Through
those influential positions, the member banks predictably established and enforced
network rules that produced ever-increasing “interchange fees”—the fees that a
merchant must pay to a card-issuing bank in order to accept Visa or MasterCard-
branded cards. See D.E. 1153 (Second Consolidated Amended Class Action
Complaint) ¶¶94-100.
Visa and MasterCard have grown exponentially over the last four decades. In
1970, only 16% of U.S. families had a credit card, and less than one million U.S.
merchants—approximately 20%—accepted payment cards. By 2006, 77% of U.S.
adults had at least one credit card, and merchant acceptance was ubiquitous. In 2007
alone, transaction volume on bank-issued credit cards topped two trillion dollars,
and Visa and MasterCard transactions accounted for roughly 75% of that volume.
D.E. 1153 ¶¶126, 274-276.
!"#$% '()*+,' -./01$23% ''(* 4"5$% '+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 177/512
5
As their market power grew, the interchange fees Visa and MasterCard levied
on merchants rose as well. Merchants faced a schedule of “default interchange fees”
for every transaction on the network. In practice, because private agreements to
deviate from the “default” rates were exceptionally rare, these were not just default
fees, but actual fees. Along with payroll and rent, interchange fees became one of
the largest operating costs for many businesses. By the mid-2000s, card-issuing
banks were reaping more than $30 billion annually in interchange fees. D.E. 2113-
6 (Wildfang Decl.) ¶17.
Interchange fees were not the only anticompetitive restraint adopted by the
networks and the banks that controlled them. They also adopted various “anti-
steering restraints” as network rules that every card-accepting merchant was required
to follow. Coupled with merchants’ obligations to pay default interchange fees and
to “Honor-all-Cards” bearing the Visa or MasterCard brand regardless of the issuing
bank or the amount of the interchange fee, these anti-steering restraints enabled
banks to demand exorbitant sums at the expense of merchants that had no alternative
but to continue paying the fees.
The “foremost example” of an anti-steering restraint was the anti-surcharging
rule, which prohibited merchants from adding a surcharge at the point of sale to alert
customers to the costs of payment options and recoup the costs associated with credit
card usage. D.E. 1165 (Pls.’ Mot. for Class Cert.) at 3. This rule prevented
!"#$% '()*+,' -./01$23% ''(* 4"5$% ', '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 178/512
6
merchants— who were unable, as a practical matter, to stop accepting Visa and
MasterCard—from using surcharges to “steer” customers towards less-expensive
payment methods that did not carry the same fees. Customers, in turn, were left in
the dark about those costs that they were indirectly bearing in the form of higher
prices. This disabled both merchants and customers from exerting downward
competitive pressures on interchange fees. D.E. 1153 ¶¶189-199.
Similarly, Visa’s and MasterCard’s anti-minimum purchase rules prevented
merchants from requiring a minimum cost before they would accept Visa and
MasterCard cards. In addition, their anti-discounting rules (or anti-“discrimination”
rules) prohibited merchants from offering discounts and other benefits for purchases
made with non-Visa and non-MasterCard products. See D.E. 1153 ¶8 (defining
“Anti-Steering Restraints” as “the No-Surcharge Rule; the No-Minimum Purchase
Rule; and the Networks’ so-called ‘anti-discrimination rules’”).
B. Eight Years of Hard-Fought Litigation
In June 2005, merchants filed the first of over 40 class-action complaints
alleging that Visa and MasterCard and their member banks conspired, inter alia, to
impose and fix the price of interchange fees in violation of the Sherman Act. The
class actions were consolidated later that year along with 19 individual cases before
Judge John Gleeson in the Eastern District of New York.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ': '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 179/512
7
From the outset, plaintiffs requested certification of both a damages class
under Rule 23(b)(3) and an injunctive-relief class under Rule 23(b)(2). See D.E.
317 (First Consolidated Amended Class Action Complaint) ¶97; D.E. 1153 ¶108.
Plaintiffs sought both “monetary damages to compensate them for the overcharges
caused by th[e] illegal conspiracy” and “equitable relief to protect themselves
against continuing and future harm.” D.E. 317 at 1. Both types of relief were
premised on identical facts and evidence about the defendants’ uniform course of
anticompetitive conduct. And both types of relief were equally “important” in
ensuring an effective remedy. D.E. 1165 at 39.
The settlement that ultimately emerged was the result of eight years of hard-
fought litigation that consumed enormous resources and was closely monitored by
the district court. The parties went toe-to-toe over discovery, which commenced in
2005 and took more than five years. That process entailed “more than 400
depositions, the production and review of more than 80 million pages of documents,
the exchange of 17 expert reports, and a full 32 days of expert deposition testimony.”
SPA9. The parties’ expert reports covered nearly 5,000 pages.
The parties also vigorously disputed class certification. Plaintiffs moved for
certification of the Rule 23(b)(2) and 23(b)(3) classes in 2008. Defendants opposed
certification and challenged the opinions of plaintiffs’ class certification expert. The
!"#$% '()*+,' -./01$23% ''(* 4"5$% '; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 180/512
8
district court received briefing over nearly fourteen months and held oral argument
on class certification in November 2009.
The parties additionally engaged in multiple rounds of briefing on motions to
dismiss. After one round of briefing and argument on plaintiffs’ First Supplemental
Class Action Complaint (post-IPO period), the district court partially dismissed with
leave to re-plead. Defendants then launched a second round, moving to dismiss the
First Amended Supplemental Class Action Complaint, Second Consolidated
Amended Class Action Complaint, and Second Supplemental Class Action
Complaint. The district court heard oral argument on these motions in November
2009.
The parties also exchanged cross-motions for summary judgment. In 2011,
plaintiffs sought partial summary judgment and defendants sought judgment as to
the entirety of the case. The district court received briefing over five months and
held oral argument on the cross-motions in November 2011. The parties also filed
eight Daubert motions in conjunction with the summary judgment briefing.
C. Industry Reforms During, and Due to, the Litigation
Plaintiffs’ litigation efforts brought public (and Department of Justice)
attention to the networks’ anticompetitive practices and spurred major industry
developments. Indeed, several reforms sought by plaintiffs were achieved outside
the courtroom, often as a direct result of this litigation. While those reforms marked
!"#$% '()*+,' -./01$23% ''(* 4"5$% (6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 181/512
9
a great accomplishment for merchants, they also injected delay and uncertainty into
the litigation process.
Corporate Restructurings. Shortly after the first class action was filed, and in
part to avoid “ruinous” antitrust liability, the networks abandoned their longstanding
joint venture structures. D.E. 1152 (First Amended Supplemental Class Action
Complaint) ¶149(d). MasterCard—a joint venture for over four decades—
restructured in 2006. Visa—a joint venture since 1970—followed in early 2008.
Both became publicly owned and operated, with the banks divesting their ownership
and relinquishing their board memberships and voting control over network rules.
This formal separation of the networks and banks, whereby the banks no longer
control the business decisions of Visa and MasterCard, marked a tectonic industry
shift. Cf. United States v. E. I. du Pont de Nemours & Co., 366 U.S. 316, 326 (1961)
(divestiture is the “most drastic … of antitrust remedies”).
Durbin Amendment . Beginning in 2009, class counsel also became
significantly involved in developing and drafting legislative reforms of the networks’
practices. Class counsel recommended to leading merchant groups that, instead of
seeking public-utility-like regulation of interchange fees, they focus on limiting fees
on debit card transactions to give merchants a low-cost alternative to which
merchants could eventually steer customers. The new strategy worked, and
!"#$% '()*+,' -./01$23% ''(* 4"5$% (' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 182/512
10
culminated in the Durbin Amendment to the 2010 Dodd-Frank Wall Street Reform
and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010).
The Durbin Amendment limited the networks’ anti-discounting rules,
restricting their ability to “inhibit the ability of any person to provide a discount or
in-kind incentive” to steer consumers at the point of sale toward less-expensive
forms of payment. 15 U.S.C. § 1693o-2(b)(2)(A). It also limited the networks’ anti-
minimum purchase rules, preventing them from “>?@>A>BC>?DE B@2 FA>G>BH … IJ F?H
*2KLI? BI L2B F M>?>M)M ,IGGFK NFG)2 JIK B@2 FOO2*BF?O2 AH B@FB *2KLI? IJ OK2,>B
OFK,L.” Id . § 1693o-2(b)(3)(A). P?,! critically, the Durbin Amendment authorized
the Federal Reserve Board to cap interchange fees on Visa and MasterCard debit
card transactions to ensure that they are “reasonable and proportional to the cost
incurred by the issuer.” Id. § 1693o-2(a)(3)(A). By limiting debit interchange fees,
Congress rendered debit cards a substantially lower-priced form of payment other
than cash to which merchants could steer consumers.
Department of Justice Consent Judgment. As early as 2006, DOJ and several
state attorneys general contacted class counsel and expressed interest in the
litigation. In 2008, at the urging of class counsel, DOJ opened an antitrust
investigation into Visa’s and MasterCard’s anti-steering restraints. After it issued a
Civil Investigative Demand on plaintiffs seeking “all products of discovery relating
to the Anti-Steering Rules,” class counsel granted extraordinary access to their
!"#$% '()*+,' -./01$23% ''(* 4"5$% (( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 183/512
11
document and deposition databases, work product, and advice over the next three
years. D.E. 2113-6 ¶119. That assistance directly resulted in DOJ filing its own suit
against Visa and MasterCard.
As the district court later observed, “the plaintiffs did not piggyback on
previous government action—indeed, the government piggybacked on their efforts.”
SPA59. In 2011, DOJ entered a Consent Judgment against Visa and MasterCard that
secured critical modifications to the anti-discounting rules, enabling merchants to
offer discounts at both the brand level (e.g., discounts on cards other than Visa credit
cards) and product level (e.g ., discounts on cards other than higher-cost Visa
Signature cards or MasterCard World Elite cards). In the Consent Judgment, Visa
and MasterCard also committed to providing free services to help merchants
determine the costs of accepting particular cards.
D. Mediation and Settlement
1. In the wake of these significant industry reforms, the completion of
discovery, and briefing and argument on class certification, dismissal, and summary
judgment, the parties agreed at an advanced stage of the litigation to settle their
claims. The settlement was the culmination of a painstakingly thorough and
inclusive four-year mediation process spearheaded by two of the most experienced
mediators in the country, Retired Chief Magistrate Judge Edward Infante and
Professor Eric Green.
!"#$% '()*+,' -./01$23% ''(* 4"5$% (9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 184/512
12
The parties jointly selected Judge Infante and Professor Green after months-
long negotiations. D.E. 2113-6 ¶177. Between April 2008 and December 2011, the
parties met, either jointly or separately, with one or both of the mediators
approximately 45 times, and exchanged hundreds of calls and e-mails in an attempt
to make progress toward settlement. D.E. 2113-6 ¶¶175, 181. The district court
(with assistance from the mediators) also held several multi-day settlement
conferences. Proposed class representatives—including many current-objectors—
were repeatedly invited to participate. They did participate, and were heard at length
by the mediators and the court. D.E. 1111-2 (Infante Decl.) ¶7; D.E. 1111-3 (Green
Decl.) ¶¶22-28.
The mediators presented a settlement proposal in December 2011. After
weeks of discussions, the parties—including many current-objectors—accepted that
proposal. By then, all parties were intimately familiar with the strengths and
weaknesses of their claims. Class counsel concluded that accepting the mediators’
proposal was “preferable to the only alternative, which was many more years of
litigation while merchants continued to be hamstrung by the no surcharge rules of
Visa and MasterCard and remaining anti-steering rules.” D.E. 2113-6 ¶185. In class
counsel’s view, settlement was particularly attractive “when compared … to what
was reasonably likely to be obtained by injunction in a trial before Judge Gleeson.”
Id. Class counsel recognized that even after many more years of delay and further
!"#$% '()*+,' -./01$23% ''(* 4"5$% (* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 185/512
13
litigation, victory was by no means assured; plaintiffs faced a number of potential
risks in their efforts to establish liability and damages and maintain a class action.
By February 2012, the parties—again, including many current-objectors—
agreed to negotiate toward a final settlement through the process laid out by the
mediators and the court. D.E. 1111-2 ¶8; D.E. 1111-3 ¶29. The mediators guided
months of careful debate over nearly every settlement term, with all parties
recognizing the far-reaching impact the settlement would have on the costs and
mechanics of payment card acceptance.
In July 2012, the parties—still including many current-objectors—reached a
final settlement and agreed to “set[] out the parties’ binding obligation to enter into”
the terms outlined in a Memorandum of Understanding. D.E. 1588. The district
court then tabled “all pending motions for relief (including motions concerning
discovery, class certification, dismissal, summary judgment, and the preclusion of
expert opinion testimony).” 7/17/2012 Order.
After the Memorandum of Understanding was filed, however, in the midst of
an aggressive objection campaign, several then-class representatives (now-
objectors) reversed course. Class counsel emphatically did not “fire[] their clients,”
Merchant Appellants’ Br. (“MA-Br.”) 70, as objectors contend. To the contrary, class
counsel moved to withdraw as their counsel only after those objectors withdrew their
“binding” support for the settlement and often only after new counsel appeared on
!"#$% '()*+,' -./01$23% ''(* 4"5$% (8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 186/512
14
their behalf. The final settlement, virtually identical to the July 2012 agreement, was
executed in October 2012.
2. The settlement secures substantial relief for plaintiffs. It achieves the
largest-ever cash relief in an antitrust case—two funds totaling an estimated $7.25
billion1 (before opt-out reductions)—to compensate “all persons, businesses, and
other entities that have accepted” Visa or MasterCard cards in the United States from
January 1, 2004 to the preliminary settlement approval date (November 27, 2012).
SPA118 (Settlement ¶2(a)). It also achieves an unprecedented bundle of network
rule reforms for all merchants that “accept” Visa and MasterCard cards in the United
States “as of” November 27, 2012 or after. SPA118 (Settlement ¶2(b)).
Chief among the rule reforms is the lifting of the networks’ prohibition on
surcharging, SPA141-49 (Settlement ¶42), which had been the most potent anti-
steering restraint. See D.E. 317 ¶238 (“The Anti-Steering Restraints (and
particularly the No-Surcharge Rule) are anticompetitive vertical restraints.”)
(emphasis added). In class counsel’s view, “[w]inning the surcharging tool is the
most consequential and empowering development yet in the long battle U.S.
merchants have waged to counter the anticompetitive practices and legacies in the
1
The $7.25 billion is composed of two funds: a $6.05 billion cash settlement andan estimated $1.2 billion fund based on a holdback of ten basis points in interchangefee payments by class members during an eight-month period after the opt-out
period. SPA121-23 (Settlement ¶¶10-13).
!"#$% '()*+,' -./01$23% ''(* 4"5$% (+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 187/512
15
credit-card industry.” D.E. 2113-6 ¶195. For the first time, the networks cannot
prevent merchants from imposing surcharges on Visa and MasterCard transactions
at the brand or product level to “steer” customers towards lower-cost payment
methods. Because the amount of any surcharge is disclosed before it is incurred (and
on the receipt after purchase), customers are also educated about the costs of credit
card acceptance and may in turn opt for cheaper payment methods. Indeed, even the
threat of surcharging helps incentivize networks to moderate or lower their fees to
stay competitive.
Additional rule reforms further enhance the surcharging tool. The networks
are now required to negotiate in good faith for better rates with bona fide merchant
buying groups; permit merchants to use different acceptance strategies at different
outlets; and lock in the discounting, minimum price, and other reforms of the Durbin
Amendment and DOJ Consent Judgment until July 2021. SPA140-50, 153-64
(Settlement ¶¶41, 42(g), 43, 54, 55(g), 56).
Both mediators attested that settlement negotiations were “fair, adversarial,
and always conducted at arms-length.” D.E. 1111-2 ¶12; accord D.E. 1111-3 ¶33.
Both lauded counsel for “zealously represent[ing] the interests of their clients,” D.E.
1111-2 ¶12, and giving their “best professional effort,” D.E. 1111-3 ¶33. And both
declared that the settlement terms were fair, reasonable, and adequate, “taking into
account the risks, strengths and weaknesses of [the parties’] respective positions on
!"#$% '()*+,' -./01$23% ''(* 4"5$% (, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 188/512
16
the substantive issues of the case and the risks and costs of continued litigation.”
D.E. 1111-3 ¶33; accord D.E. 1111-2 ¶13.
E. Settlement Review and Approval
The district court approved the settlement after an exhaustive review of both
the settlement process and the substantive terms. The court held a preliminary
approval hearing at which it heard from objectors and reviewed supporting evidence.
After granting preliminary approval and provisionally certifying the (b)(2) and (b)(3)
settlement classes, the court invited objectors to file written submissions and “appear
at the final approval hearing.” D.E. 1745 ¶21. The court also appointed Dr. Alan
Sykes of New York University School of Law to offer independent analysis of the
economic issues raised by the settlement. And, at the final approval hearing, the
court heard again from objectors.
The district court issued a 55-page decision granting final approval of the
settlement. See In re Payment Card Interchange Fee Antitrust Litig ., 986 F. Supp.
2d 207 (E.D.N.Y. 2013). The court first deemed the settlement procedurally fair,
concluding that the “record … demonstrates beyond any reasonable doubt that the
negotiations were adversarial and conducted at arm’s length by extremely capable
counsel.” SPA21 (emphasis added). It emphasized that “there is no indication that
the Settlement Agreement is the product of collusion,” and that “the negotiation
process fairly protected the interests of the settlement class.” SPA21-22. Even many
!"#$% '()*+,' -./01$23% ''(* 4"5$% (: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 189/512
17
objectors “were deeply involved in the settlement negotiations and mediation, and
indeed accepted the mediators’ proposal that outlined the key components of what
became the Settlement.” SPA21.
The district court then found that the settlement fell well “within the range of
reasonableness” under the multi-factor standard of Detroit v. Grinnell Corp., 495
F.2d 462, 463 (2d Cir. 1974). The court noted that the advanced stage of litigation
gave all involved “a more than adequate basis for assessing the claims” after “more
than eight years” of “full-throttle” litigation. SPA9, 11, 25. It emphasized that
further litigation would entail lengthy delays. “Numerous motions remain[ed]
pending,” the class certification motion would inevitably entail “interlocutory
review by the Second Circuit,” “a trial would take several months,” and the “losing
parties would likely appeal any adverse jury verdicts.” SPA22. And, even after
many more years of litigation, the class would still face “the prospect of uncertain
relief.” SPA35. By contrast, the settlement affords a certain and largely immediate
recovery, enabling class members to “take advantage of rules changes now” and
receive “significant monetary compensation in the near future.” SPA23.
The district court thoroughly considered and rejected the concerns of
objectors, who comprised 0.05%, or one-twentieth of 1%, of the estimated class.
The court lamented that “[t]he behavior of a small number of objectors has
threatened to undermine the efforts of the others” with “needless hyperbole,”
!"#$% '()*+,' -./01$23% ''(* 4"5$% (; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 190/512
18
“vitriol,” and the improper use of “websites that disseminated false and misleading
information.” SPA13-14, 23.2 The objectors, moreover, appeared to “assum[e] that
a complete victory on the merits is a foregone conclusion.” SPA26. In fact, a “wide
range of outstanding issues” created substantial risks and uncertainties if litigation
were to proceed. SPA25-26. For instance, “objectors assume that default
interchange is inherently illegal, but in reality it is a very complicated issue.” SPA29.
Objectors similarly assumed the illegality of the Honor-all-Cards rule, even though
there was record evidence and analogous caselaw suggesting that this rule would be
found “ procompetitive under the Rule of Reason.” SPA31. And plaintiffs faced
additional “complexities … in proving damages to the jury” and risks associated
with class certification. SPA32-34.
Objectors also “underestimated the significance of the Rule 23(b)(2) relief.”
SPA25. The district court declared surcharging “an indisputably procompetitive
development that has the potential to alter the very core of the problem this lawsuit
was brought to challenge.” SPA35-36. For merchants, the surcharging relief
removes “a central piece” of the problem. SPA37. Merchants can now provide
2 The district court observed that “90% of the objections [were generated] on boilerplate forms” downloaded from the websites, which were established “for the
precise purpose of drumming up objections and opt-outs” and misled merchantsabout their options. SPA13, 23. The court had previously been forced to issueinjunctive relief to address this misinformation campaign and “came close to holdingcertain entities in contempt.” SPA14.
!"#$% '()*+,' -./01$23% ''(* 4"5$% 96 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 191/512
19
customers with clear signals of “what it costs the merchant to accept a particular
card,” giving them valuable leverage to encourage the use of cheaper payment
methods and brands. SPA37. Customers, meanwhile, have a choice between
surcharged payment methods and lower-cost payment methods. And networks will
face incentives to “moderate or lower their interchange fees to avoid being
disfavored.” SPA37. As the court explained, “[e]ven if the objectors are right in
contending that additional dominoes must fall before the alleged anticompetitive
behavior of Visa and MasterCard is eradicated”—whether independent constraints
on surcharging posed by state laws or third parties—“those dominoes will have to
fall in other forums.” SPA18.
The district court similarly dismissed criticisms of the release. Consistent
with precedent, the settlement releases only “claims that are or could have been
alleged based on the identical factual predicate of the claims in this case.” SPA46.
Though the release “appropriately limit[s] future damages claims based on the pre-
settlement conduct of the networks,” it does not release claims “based on new rules
or new conduct or a reversion to the pre-settlement rules.” SPA46. And, again,
objectors underestimated the significance of the (b)(2) relief by painting the release
as giving away valuable claims for nothing. SPA45.
The district court squarely rejected objectors’ contention that the (b)(2) class
should have afforded members a “due process right to opt out.” SPA46. The (b)(2)
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 192/512
20
claims sought “injunctive relief from [a] bundle of network rules” that are
“precisely” the “proper subject of a (b)(2) class from which no opt outs are
permitted.” SPA46. The court also rejected criticisms of the settlement notice.
Separately, the district court issued a 17-page decision approving a $544.8
million attorneys’ fee—9.56% of the damages fund, after opt-out reductions—as “a
reasonable overall fee” in light of the “unique … size, duration, complexity, and …
relief” of this case. SPA69-70. See In re Payment Card Interchange Fee Antitrust
Litig ., 991 F. Supp. 2d 437 (E.D.N.Y. 2014). Applying the multi-factor standard of
Goldberger v. Integrated Resources, 209 F.3d 43, 47–48 (2d Cir. 2000), the court
again emphasized that the substantial injunctive relief “may very likely exceed the
value of the monetary relief in the long run.” SPA67. This far-reaching relief
confirmed the court’s judgment that class counsel “litigated the case with skill and
tenacity” and that the settlement “would not exist” but for counsel’s assumption of
risk and extraordinary efforts. SPA59, 61.
To calculate the fee, the court used a sliding scale that awarded counsel
diminishing percentages of the settlement fund as the fund increased. SPA69. It
further confirmed that the lodestar multiplier was “comparable to multipliers in other
large, complex cases.” SPA70.
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 193/512
21
SUMMARY OF ARGUMENT
I. The structure of the settlement classes, including the uncontroversial
coexistence of Rule 23(b)(2) and (b)(3) classes in a single case, fully satisfied
Rule 23. The (b)(2) class was a paradigmatic (b)(2) class seeking exclusively
injunctive, indivisible relief—namely, the elimination or modification of nationwide
network rules that apply generally to all card-accepting merchants. Precisely
because that class sought indivisible relief, no opt-outs from the class were feasible,
let alone necessary. The (b)(3) class, in contrast, sought and obtained substantial
monetary relief, and fully comported with the (b)(3) opt-out and notice requirements.
Although objectors seek to characterize the inclusion of a non-opt-out (b)(2)
class and opt-out (b)(3) class in one action as anomalous, such arrangements are
common in situations—like this one—where both injunctive relief and damages are
needed to provide an adequate remedy. Far from evading any legal requirements of
(b)(2) and (b)(3), the class structure hewed carefully to each subsection and fully
heeded the dictates of Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011). Class certification
was therefore proper under a straightforward application of Rule 23.
Objectors’ efforts to conjure up a “due process” problem from that class
structure are wholly without merit. Objectors concede that the (b)(2) claims for relief
are exclusively injunctive, but argue that opt-out rights must be provided because
the settlement bars certain future damages claims by (b)(2) class members against
!"#$% '()*+,' -./01$23% ''(* 4"5$% 99 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 194/512
22
defendants. But that is neither unusual nor legally problematic. The propriety of
(b)(2) certification turns only on the claims for relief , which are exclusively
injunctive and fully compliant with (b)(2). That a settlement releases future
challenges to the agreed-upon, going-forward conduct—including hypothetical and
uncertain future damages claims—is not surprising. Such releases are common
inducements for defendants to settle, and appropriate injunctive relief should limit
future damages claims based on the new regime, since it is designed to address the
challenged conduct prospectively. And, of course, the propriety of both the
injunctive relief and any associated releases will be properly considered as part of
the analysis of the settlement’s fairness under Rule 23(e).
There is absolutely no basis for a novel bright-line rule that classes certified
under (b)(2) can never, in a settlement release, foreclose a hypothetical future claim
seeking damages. Such a rule would prove unworkable and run afoul of the Rules
Enabling Act. Unsurprisingly, objectors cite no caselaw whatsoever for the
proposition that a (b)(2) class is no longer a (b)(2) class solely because potential
future challenges to the agreed-upon conduct are foreclosed as part of a
comprehensive settlement.
Objectors’ efforts to manufacture an adequacy-of-representation problem fare
no better. As the district court correctly concluded, class representatives and counsel
were adequate representatives of both the (b)(2) and (b)(3) classes. The structural
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 195/512
23
assurances of fair and adequate representation in the settlement negotiations were at
their apex given the involvement of Judge Gleeson, Magistrate Judge Orenstein, and
the two highly-regarded mediators. There is, moreover, no conflict of interest, much
less a fundamental conflict going to the heart of the litigation, between the (b)(2) and
(b)(3) classes. To the contrary, the class memberships overlap almost entirely; they
exist as two classes by virtue of Rule 23, and not by virtue of different claims,
different facts, or antagonistic interests. The substantial (b)(2) relief and massive
(b)(3) damages fund confirm only that neither class interest was left out in the cold,
and both classes reaped significant benefits from class counsel’s zealous advocacy.
II. The district court’s determination that the settlement as a whole fell
within a “range of reasonableness,” Grinnell , 495 F.2d at 463, was an appropriate
exercise of its broad discretion. The notion that the largest-ever cash relief in an
antitrust class action settlement was “reasonable” hardly requires extended
comment. And, as the district court recognized, the injunctive reforms of the
networks’ longstanding merchant restraints may prove even more valuable in the
long run.
Chief among these reforms is the removal of anti-surcharging restraints,
which for decades prevented merchants from imposing surcharges on Visa and
MasterCard transactions to steer customers to less-costly methods of payment and
incentivize the networks to lower their interchange fees. Other reforms, such as the
!"#$% '()*+,' -./01$23% ''(* 4"5$% 98 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 196/512
24
buying group provision and all-outlets provision, will only enhance merchants’ new
surcharging opportunities and exert further downward pressures on interchange fees.
The release in exchange for that injunctive relief, moreover, is a standard-
form release that courts have repeatedly approved. Objectors insinuate that the
settlement releases certain future challenges in violation of due process or public
policy. But as the district court found and as the parties agreed below, the releases
merely foreclose challenges to the going-forward regime agreed upon in the
settlement and, in any event, must be interpreted to reflect, not violate, due process
limits. Objectors seek no less than an improper advisory opinion to predetermine
issues that the release does not even raise.
III. The district court’s determination that an attorneys’ fee of 9.56% of the
damages fund was “‘reasonable’ under the circumstances,” Goldberger , 209 F.3d at
47, was likewise an appropriate exercise of its broad discretion. The district court
grounded its analysis in the “unique … size, duration, complexity, and … relief” of
this case, and appropriately lauded class counsel and the nearly 60 additional law
firms that worked on this case over eight years for their “skill and tenacity” in
achieving the “significant success” of the settlement. SPA56, 61. Objectors dispute
the district court’s assessment of counsel’s performance and the settlement relief,
and quibble with the specific percentages used in its sliding-scale percentage
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 197/512
25
calculation of the fee amount. But those arguments merely rehash their meritless
criticisms of the settlement as substantively unreasonable.
IV. Finally, the district court’s determination that the settlement notice was
“reasonable[],” Soberal-Perez v. Heckler , 717 F.2d 36, 43 (2d Cir. 1983), was also
an appropriate exercise of its broad discretion. The notice need only fairly apprise
prospective class members of the terms of the settlement and of options available to
them moving forward. The notice here — which described the litigation and
settlement terms, quoted the releases, described the request for attorneys’ fees, and
explained the procedures for filing objections and opting out — readily met that
standard. Objectors posit various misstatements and omissions in the notice, but the
district court considered and rejected those arguments several times. The district
court’s judgment should be affirmed in all respects.
STANDARD OF REVIEW
This Court will “disturb a judicially-approved settlement only when an
objector has made a ‘clear showing that the district court has abused its discretion.’”
D’Amato, 236 F.3d at 85 (emphasis added). A court abuses its discretion only “when
its decision rests on an error of law or a clearly erroneous factual finding, or when
its decision cannot be located within the range of permissible decisions.” Charron
v. Wiener , 731 F.3d 241, 247 (2d Cir. 2013). This “considerable deference” is rooted
in a recognition that the district court is uniquely “‘exposed to the litigants, and their
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 198/512
26
strategies, positions and proofs.’” Joel A. v. Giuliani, 218 F.3d 132, 139 (2d Cir.
2000).
Similarly, this Court will disturb a district court’s determination on class
certification, as well as its rulings that individual Rule 23 requirements have been
met, only upon an abuse of discretion. In re IPO Sec. Litig., 471 F.3d 24, 31–32 (2d
Cir. 2006). Where the district court has granted class certification, this Court accords
“noticeably more deference than when we review a denial.” In re Salomon Analyst
Metromedia Litig ., 544 F.3d 474, 480 (2d Cir. 2008).
This Court likewise reviews attorneys’ fee awards, and the form and content
of notice to class members, for an abuse of discretion. See Goldberger , 209 F.3d at
47-48; Masters v. Wilhelmina Model Agency, 473 F.3d 423, 438 (2d Cir. 2007).
ARGUMENT
I. The Structure Of The Settlement Classes Conforms Precisely To Bedrock
Certification Requirements Under Rule 23.
From the inception of this litigation—with the support of all class
representatives, including many current-objectors—plaintiffs consistently sought
certification of two classes: a class seeking prospective injunctive relief under Rule
23(b)(2), and a class seeking retrospective monetary relief under Rule 23(b)(3).
Those classes readily satisfied their respective subsections of Rule 23. The (b)(2)
class sought exclusively indivisible, generally applicable injunctive relief and fully
complied with all requirements for a (b)(2) class. The (b)(3) class, in turn, sought
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 199/512
27
monetary relief, and fully complied with all requirements of Rule 23(b)(3), including
notice to the class and an opportunity to opt-out. The district court thus correctly
concluded that certification of these classes was proper.
Objectors attempt to channel their substantive objections to the settlement—
issues that are properly addressed in a review of the settlement’s fairness under Rule
23(e), see infra Part II—into various attacks on the “structure” of the classes. But
as Rule 23(a) and (b) arguments, the objections are simply misplaced. The district
court considered and rejected all of objectors’ arguments and correctly concluded
that this case involves a textbook case for certification under Rule 23.
A.
The Rule 23(b)(2) Class Unquestionably Brought Claims For
“Indivisible” Relief.
1. Rule 23(b)(2) allows class treatment when the alleged wrongdoer “has
acted or refused to act on grounds that apply generally to the class, so that final
injunctive relief or corresponding declaratory relief is appropriate respecting the
class as a whole.” Fed. R. Civ. P. 23(b)(2); see also 7AA Wright & Miller, Federal
Practice and Procedure § 1775 (3d ed. 1998) (“[T]wo basic factors … must be
present … (1) the opposing party’s conduct or refusal to act must be ‘generally
applicable’ to the class and (2) final injunctive or corresponding declaratory relief
must be requested for the class”). It is well-settled that the “key to the (b)(2) class
is ‘the indivisible nature of the injunctive or declaratory remedy warranted—the
!"#$% '()*+,' -./01$23% ''(* 4"5$% 9; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 200/512
28
notion that the conduct is such that it can be enjoined or declared unlawful only as
to all of the class members or as to none of them.’” Dukes, 131 S. Ct. at 2557.
That characteristic does not require class members to be in “an identical
situation,” Rich v. Martin Marietta, 522 F.2d 333, 340 (10th Cir. 1975), or have
“suffered identical injuries,” Parsons v. Ryan, 754 F.3d 657, 688 (9th Cir. 2014), or
indeed even “be aggrieved by or desire to challenge defendant’s conduct.” Wright
& Miller § 1775; see also Fed. R. Civ. P. 23 advisory committee notes (1966)
(“Action or inaction is directed to a class within the meaning of this subdivision even
if it has taken effect or is threatened only as to one or a few members of the class”).
Instead, all that is required to proceed as a (b)(2) class is that “the relief sought must
perforce affect the entire class.” Dukes, 131 S. Ct. at 2558.
As the Supreme Court has underscored, “[t]he procedural protections
attending the (b)(3) class—predominance, superiority, mandatory notice, and the
right to opt out—are … unnecessary to a (b)(2) class” precisely because “[w]hen a
class seeks an indivisible injunction benefitting all its members at once, there is no
reason to undertake a case-specific inquiry into whether class issues predominate or
whether class action is a superior method of adjudicating the dispute.” Id. at 2558.
Those characteristics are simply self-evident. Indeed, even an individual suit
enjoining defendants’ nationwide operations would affect all members of the class;
!"#$% '()*+,' -./01$23% ''(* 4"5$% *6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 201/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 202/512
30
restraints necessarily “redesigns the relationship between … each merchant and the
networks in precisely the same manner.” SPA52.
Because this case involves challenges to nationwide, generally applicable
network rules, it is far afield from a scenario in which “each individual class member
would be entitled to a different injunction … against the defendant.” Dukes, 131 S.
Ct. at 2557; see also In re IKO Roofing Prods. Litig ., 757 F.3d 599, 602 (7th Cir.
2014) (unlike in Dukes, “[i]n a suit alleging a defect common to all instances of a
consumer product … the conduct does not differ”). Because Visa and MasterCard
are nationwide networks each with uniform rules, it would have been impossible to
have a patchwork of injunctions that enjoined the challenged network rules only with
respect to certain merchants. The district court thus had little difficulty concluding
that this is “precisely” the kind of case for which Rule 23(b)(2) was intended.
SPA46; see also Fed. R. Civ. P. 23 advisory committee notes (1996) (citing example
of a (b)(2) “class of purchasers, say retailers of a given description, against a seller
alleged to have undertaken to sell to that class at [discriminatory] prices”).
Making the application of (b)(2) even more straightforward, the (b)(2) claims
here consist exclusively of claims for injunctive relief. In Dukes, the Supreme Court
made clear that claims for monetary relief cannot be litigated in a (b)(2) class
alongside bona fide claims for injunctive or declaratory relief, “at least where … the
monetary relief is not incidental to the injunctive or declaratory relief.” 131 S. Ct.
!"#$% '()*+,' -./01$23% ''(* 4"5$% *( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 203/512
31
at 2557. Because the Supreme Court expressly left open the possibility that some
truly incidental monetary relief might still be allowed in a (b)(2) action, objectors
overstate matters by asserting, based on Dukes, that Rule 23(b)(2) “applies only
when the case consists exclusively of common claims.” MA-Br. 34. But in all
events, the (b)(2) class at issue here seeks only indivisible injunctive relief, which
Dukes confirmed unquestionably belongs in Rule 23(b)(2).
2. Objectors’ assertion that the (b)(2) class is not “cohesive” is badly
misplaced. MA-Br. 44-66. As an initial matter, class “cohesion” is not expressly
required by the text of Rule 23(b)(2) or any Supreme Court precedent interpreting
that rule. But even if “cohesion” is required, it is shorthand for the need for generally
applicable, class-wide injunctive relief, which is amply satisfied here. This Court
has observed, in the few instances where it used the term in passing, that “a Rule
23(b)(2) class seeking declaratory and injunctive relief is cohesive by nature .”
Handschu v. Special Servs. Div., 787 F.2d 828, 833 (2d Cir. 1986). That is, “[w]here
class-wide injunctive or declaratory relief is sought in a (b)(2) class action for an
alleged group harm, there is a presumption of cohesion and unity between absent
class members and the class representatives.” Robinson v. Metro-North, 267 F.3d
147, 165 (2d Cir. 2001).
Objectors do not come close to overcoming this “presumption” of cohesion.
To the contrary, this effort to reform the practices employed in a nationwide network
!"#$% '()*+,' -./01$23% ''(* 4"5$% *9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 204/512
32
is the very paradigm of a (b)(2) case. Objectors’ core argument is that the (b)(2)
class was not cohesive because it was very large, and included merchants that had
“varying interests” in the relief ultimately obtained. MA-Br. 53-61. But that is
wrong for a number of reasons. Whatever differences there may be among class
members in terms of their “size[s]” and “business models,” MA-Br. 53-54, they are
all subject to the defendants’ generally applicable network rules and practices, which
will be impacted on a nationwide basis by the going-forward relief. That is all the
cohesion Rule 23(b)(2) would demand.
Objectors cite a smattering of decisions from other jurisdictions rejecting
(b)(2) classes as non-cohesive, but the facts of those cases only underscore the lack
of any cohesion issue here. Most of those decisions arose in the mass tort context,
where courts “employ[] Rule 23(b)(2) sparingly” because “factual differences
among individual class members may affect critical elements of plaintiffs’ claims ,
such as proximate causation, reliance and defendant’s affirmative defenses.”
1 McLaughlin on Class Actions § 5:15 (10th ed.) (emphasis added). For example,
the Eighth Circuit decertified a (b)(2) class of artificial heart valve patients seeking
a medical-monitoring injunction because “each plaintiff’s need (or lack of need) for
medical monitoring is highly individualized,” based on the patient’s “medical
history” and “risk factors,” the “different elements triggering culpability,” and other
considerations. In re St. Jude Medical , 425 F.3d 1116, 1122 (8th Cir. 2005); see also
!"#$% '()*+,' -./01$23% ''(* 4"5$% ** '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 205/512
33
Barnes v. Am. Tobacco, 161 F.3d 127, 146 (3d Cir. 1998) (denying certification of
medical-monitoring class in suit against cigarette manufacturers).
Here, in contrast, the injunctive reforms sought are generally applicable, and
the same rules and rule modifications apply to all merchants. And objectors identify
no way in which the purported differences among class members would affect the
elements of a claim for that injunctive relief under the Sherman Act and Clayton Act.
The identity of the particular merchant-plaintiff would have no bearing whatsoever
on whether the challenged network rules were the product of unlawful restraints of
trade.
Objectors also claim that the (b)(2) class was not cohesive because some states
would prohibit merchants from surcharging credit card transactions even if
surcharging were permitted by the terms of the settlement. In support of that
argument, objectors cite Amchem Prods. v. Windsor, 521 U.S. 591 (1997), for the
proposition that “variations in state law” can undermine (b)(2) cohesion. But
Amchem involved a class seeking monetary relief under Rule 23(b)(3), and the
differing state laws went to the very availability of plaintiffs’ causes of action (and
thus whether common issues “predominated” among the class). As the Court
explained, state law “varied widely on such critical issues as ‘viability of [exposure-
!"#$% '()*+,' -./01$23% ''(* 4"5$% *8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 206/512
34
only] claims [and] availability of causes of action for medical monitoring.’” Id. at
609-10.3
There is no comparable concern in this case or in (b)(2) classes more broadly.
State anti-surcharging laws hardly immunize defendants’ conduct under the federal
antitrust laws, and at most limit the extent to which some class members will benefit
from the relief obtained. But that does not change the reality that defendants’ rules
and conduct will change on a nationwide basis in a manner applicable to all class
members. The fact that some class members may not be able to take full advantage
of the change because of independent state-law obstacles to changing the class
members’ conduct does not create a Rule 23(b)(2) problem. See 2 Newberg on Class
Actions § 6:15 (4th ed. 2002) (“That not all members of the class may seek or desire
the same relief, or may otherwise have disparate interests, will not … bar the
certifying of a class action seeking injunctive and declaratory relief”).4
3 Objectors also cite In re AIG Sec. Litig ., 689 F.3d 229, 243 (2d Cir. 2012), butthat case merely cited Amchem and noted that the district court should address in thefirst instance whether “variations in state law might cause class members’ intereststo diverge.” Here, Judge Gleeson fully considered such issues and concluded thatany state-by-state variation in surcharging rules was insufficient to defeat classcertification. SPA38-41.
4 Related speculation that health insurers might be actually or effectively
prevented from surcharging by federal and state regulations—including whollyhypothetical effects of the Affordable Care Act’s Medical Loss Ratio rules—likewisehas no bearing on Rule 23(b)(2) cohesion in the relevant sense. See Blue Cross Br.18-21.
!"#$% '()*+,' -./01$23% ''(* 4"5$% *+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 207/512
35
Objectors, moreover, confuse an expectation of some minimal cohesion with
a standard of equal benefit or after-the-fact satisfaction from the relief obtained.
MA-Br. 58-66; cf. Amchem, 521 U.S. at 623 (noting that (b)(3) predominance inquiry
“trains on the legal or factual questions that … preexist any settlement ”) (emphasis
added). There is absolutely no support for such an impossible-to-satisfy standard.
A (b)(2) class does not unravel merely because certain class members are “more
sanguine” about, or realize “‘greate[r] savings’” from, the relief obtained. MA-Br.
58, 62. At bottom, objectors’ so-called “cohesion” arguments are just challenges to
the substantive fairness of the settlement rather than the propriety of class
certification. Any concerns about whether certain class members received enough
relief from the ultimate settlement, see MA-Br. 58-61, are certainly relevant to
whether the settlement was “fair, reasonable, and adequate” under Rule 23(e). But
those concerns do not change the fact that Visa and MasterCard applied the
challenged network rules to all merchants, and that any modifications to the network
rules effectuated by this litigation would apply to each and every merchant that
accepts Visa and MasterCard.
* * *
In short, this class falls in the heartland of Rule 23(b)(2). “[A]ll the members
of the injunctive relief class were subject to the same rules, … the relief afforded by
that class is a change to those rules,” and all members of the (b)(2) class sought
!"#$% '()*+,' -./01$23% ''(* 4"5$% *, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 208/512
36
injunctive relief and injunctive relief alone. SPA53 n.20. The district court did not
abuse its discretion in finding the criteria for Rule 23(b)(2) certification satisfied.
B. The Rule 23(b)(2) Class Required No Opt-Out Rights; All Claims
for Individualized Monetary Relief Were Separately and Properly
Certified Under Rule 23(b)(3).
1. Precisely because the hallmark of a (b)(2) class is a claim for indivisible
injunctive or declaratory relief, (b)(2) classes provide “no opportunity for ... class
members to opt out, and do[] not even oblige the district court to afford them notice
of the action.” Dukes, 131 S. Ct. at 2558. Since the relief obtained through a (b)(2)
class action is—by definition—generally applicable to all class members, an
individual cannot request exclusion and pursue relief individually. As the district
court explained, “[i]f merchants could opt out of the (b)(2) class, they would reap
the benefits of that relief anyway.” SPA46; see also Jefferson v. Ingersoll , 195 F.3d
894, 897 (7th Cir. 1999) (“individual suits would confound the interest of other
plaintiffs … when an injunction affects everyone alike”).
Indeed, “[t]he procedural protections attending the (b)(3) class” are
inapplicable precisely because “[w]hen a class seeks an indivisible injunction
benefitting all its members at once, there is no reason to undertake a case-specific
inquiry into whether class issues predominate or whether class action is a superior
method of adjudicating the dispute.” Dukes, 131 S. Ct. at 2558. As the Rule 23
Advisory Committee explained, given the “characteristics of the [(b)(2)] class,”
!"#$% '()*+,' -./01$23% ''(* 4"5$% *: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 209/512
37
there is “no right to request exclusion.” Fed. R. Civ. P. 23 advisory committee notes
(2003). Requiring notice would not only be pointless but counterproductive,
creating “the risk that notice costs may deter the pursuit of class relief” and thereby
“crippl[ing] actions that do not seek damages.” Id. Whereas the opt-out right in
(b)(3) classes follows directly from the ability to pursue individual claims for
damages, asserting an opt-out right in a (b)(2) class is a non sequitur.
2. The district court fully understood these basic principles and certified
both a valid (b)(2) mandatory class and an equally valid (b)(3) opt-out class.5 As the
court easily concluded, “[e]ach class … satisfies its respective subsection of Rule
23(b)” and “certification is proper.” SPA53 n.20.
Including two valid classes in a single action is neither remarkable nor
problematic. See Fed. R. Civ. P. 23 advisory committee notes (2003) (noting notice
requirements for the (b)(3) class only where “a Rule 23(b)(3) class is certified in
conjunction with a (b)(2) class”). Two rights do not somehow make a wrong.
“‘[W]here injunctive relief and damages are both important components of the relief
requested, court[s] have regularly certified an injunctive class under Rule 23(b)(2)
and a damages class under Rule 23(b)(3) in the same action.’” In re NASDAQ
5 A number of merchants chose to exercise their right to opt-out of the (b)(3) class.Those plaintiffs’ individual claims for money damages remain pending before thedistrict court.
!"#$% '()*+,' -./01$23% ''(* 4"5$% *; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 210/512
38
Antitrust Litig., 169 F.R.D. 493, 515 (S.D.N.Y. 1996); see also Gooch v. Life
Investors Ins., 672 F.3d 402, 428-29 (6th Cir. 2012) (appropriate to certify distinct
(b)(2) and (b)(3) classes, where (b)(2) relief “is a separable and distinct type of
relief”).6
Here, from the outset of the litigation, plaintiffs requested certification of both
a (b)(3) class for “monetary damages to compensate them for … overcharges” and
a (b)(2) class for “equitable relief to protect themselves against continuing and future
harm.” D.E. 317 at 1. The damages provided relief for excessive interchange fees
already paid, while the injunctive relief addressed defendants’ anticompetitive
practices going forward. Plaintiffs consistently maintained—long before settlement
even entered the picture—that the injunctive relief was “as important as the
damages.” D.E. 1165 (Pls.’ Mot. for Class Cert.) at 39; see also Velez v. Novartis,
244 F.R.D. 243, 271 (S.D.N.Y. 2007) (“If Plaintiffs prevail on the merits … it would
serve little purpose to award money damages for discrimination without addressing
the institutional structure that perpetuates it.”).
6 E.g., Huyer v. Wells Fargo, 295 F.R.D. 332, 345 (S.D. Iowa 2013); Bristol v.
Louisiana-Pacific, 916 F. Supp. 2d 357, 370 (W.D.N.Y. 2013); Stinson v. City of N.Y.,282 F.R.D. 360, 381 (S.D.N.Y. 2012); In re Vitamin C Antitrust Litig ., 279 F.R.D. 90(E.D.N.Y. 2012); Easterling v. Dep’t of Corr., 278 F.R.D. 41 (D. Conn. 2011);
Jermyn v. Best Buy, 276 F.R.D. 167 (S.D.N.Y. 2011).
!"#$% '()*+,' -./01$23% ''(* 4"5$% 86 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 211/512
39
The district court agreed, suggesting that a damages-only award would permit
the networks’ “merchant restraints [to], in effect, place the merchants back where
they started,” thus allowing the networks to simply “recoup[] any associated lost
revenues by tinkering with … other fees.” SPA16. Injunctive relief targeted at those
merchant restraints was therefore “crucial” because it would avert such
circumvention and permit merchants themselves to exert competitive pressures on
interchange fees. SPA18.
Objectors are thus flatly wrong to characterize the structure of the classes as
an “artificial contrivance that inverted the design of Rule 23.” MA-Br. 45. There is
nothing at all anomalous or unusual about pairing a non-opt-out (b)(2) class and an
opt-out (b)(3) class in the same case. The existence of both classes was a necessary
byproduct of the distinct subsections of Rule 23(b) and plaintiffs’ position that
defendants had violated the antitrust laws (thus, the (b)(3) class) and would continue
to do so absent injunctive relief (thus, the (b)(2) class).
3. Given the need for both backward-looking monetary relief and
forward-looking injunctive relief, the (b)(2) class was not in any way a “sham
request[] for injunctive relief [to] provide cover for (b)(2) certification of claims that
are brought essentially for monetary recovery.” Robinson, 267 F.3d at 164; cf.
Kartman v. State Farm, 634 F.3d 883, 889 (7th Cir. 2011) (noting “technique of
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 212/512
40
recasting a straightforward claim for damages as a claim for damages and injunctive
relief” to “make [a] case more amenable to class certification”).
For that reason, objectors’ efforts to shoehorn this case into a Dukes scenario
are unavailing. In Dukes, the plaintiffs sought injunctive relief, declaratory relief,
and backpay, all in a single (b)(2) class. The Supreme Court rejected that maneuver,
holding that because the individualized backpay claims were more than “incidental
to the injunctive or declaratory relief,” they instead “belong[ed] in Rule 23(b)(3).”
131 S. Ct. at 2557-58.
The (b)(2) and (b)(3) classes in this case are consistent with both the letter and
spirit of Dukes. This is not an attempt to smuggle damages claims into a (b)(2) class,
as the existence of the parallel (b)(3) class attests. There was no such parallel (b)(3)
class in Dukes, which suffices to distinguish it. That the (b)(2) settlement foreclosed
future efforts to obtain damages based on the agreed-upon, going-forward conduct
is an entirely distinct issue and entirely unobjectionable, as explained next.
C. There Is Nothing Improper About Having a Rule 23(b)(2) Class
Settlement Foreclose Possible Future Claims Seeking Damages.
1. The (b)(2) class here sought injunctive relief and injunctive relief alone.
Thus, objectors’ claim to an opt-out right depends not on the claims for relief of the
(b)(2) class, which are wholly unobjectionable, but entirely on the fact that the
settlement featured a release that foreclosed future challenges to the networks’
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 213/512
41
agreed-upon, going-forward conduct, including unknown future claims seeking
damages based upon that conduct.
That argument mixes apples and oranges. It wholly rewrites the established
certification criteria, under which “[t]he dispositive factor that must be assessed in
determining whether a class may be certified under Rule 23(b)(2) is the type of relief
the plaintiffs actually seek”—not the type of future claims released by the settlement.
1 McLaughlin on Class Actions § 5:15. As the Supreme Court explained in Dukes,
(b)(2) certification turns on the “relief sought,” “requests for … relief,” “claims for
… relief,” “remedy warranted,” and relief “entitled to.” 131 S. Ct. at 2557. The
“relief” sought by the (b)(2) class here—changes to defendants’ network rules—was
classic injunctive relief that unquestionably belonged in (b)(2).
Objectors’ so-called “due process” complaint about the release of hypothetical
and uncertain future damages claims as part of the settlement of a non-opt-out class
is untethered to the specifics of this case. They are essentially advancing a bright-
line rule under which (b)(2) classes can never release a future damages claim in
settlement. Tellingly, however, objectors fail to identify even a single case, and to
our knowledge there is none, that has ever based the propriety of (b)(2) class
certification on the nature of future claims foreclosed by a settlement release, as
opposed to the existing claims for which relief is sought.
!"#$% '()*+,' -./01$23% ''(* 4"5$% 89 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 214/512
42
To the contrary, numerous (b)(2) settlement classes have released future
claims seeking relief for going-forward conduct. See, e.g., San Diego Police
Officers’ Ass’n v. San Diego City Emps.’ Ret. Sys., 568 F.3d 725, 734-36 & n.7 (9th
Cir. 2009); Nottingham Partners v. Trans-Lux, 925 F.2d 29, 32-34 (1st Cir. 1991);
TBK Partners v. W. Union, 675 F.2d 456, 459-60 (2d Cir. 1982); Scarver v. Litscher ,
371 F. Supp. 2d 986, 997 (W.D. Wis. 2005); Ass’n For Disabled Ams. v. Amoco, 211
F.R.D. 457, 472 (S.D. Fla. 2002). More often, (b)(2) certification cases simply do
not address the released claims, which go more to the settlement’s fairness under
Rule 23(e) than the Rule 23(b)(2) criteria.
Each of the cases cited by objectors in support of their purported opt-out
rights, see MA-Br. 32-43, is readily distinguishable. Objectors primarily rely on
cases involving classes certified under (b)(3). For instance, they cite the Supreme
Court’s statement in Phillips Petroleum v. Shutts that if a court “wishes to bind an
absent plaintiff concerning a claim for money damages or similar relief at law, it
must provide minimal procedural due process protection,” including “an opportunity
to remove himself from the class.” 472 U.S. 797, 811-12 (1985) (emphasis added).
But Shutts involved claims for money damages certified under the state-law
equivalent of a (b)(3) class.
Objectors also note this Court’s quotation of Shutts in Stephenson v. Dow
Chemical , 273 F.3d 249, 258 (2d Cir. 2001), but Stephenson likewise involved a
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 215/512
43
(b)(3) class with retrospective damages claims. And objectors mistakenly rely on In
re Visa Check/MasterMoney Antitrust Litig ., 280 F.3d 124 (2d Cir. 2001), claiming
that this Court affirmed the certification of a (b)(3) class to avoid “‘the primary
concern … about Rule 23(b)(2),’ i.e., ‘the absence of mandatory notice and opt-out
rights.’” MA-Br. 36. In fact, the Court stated in Visa Check that “the primary
concern about certifying a class with significant damages under Rule 23(b)(2) is the
absence of mandatory notice and opt-out rights.” 280 F.3d at 147 (emphasis added).
This Court’s precise concern was with certifying “significant damages” claims in a
non-opt-out class, and it did not reach the propriety of (b)(2) certification.
The other cases objectors cite involved individualized monetary claims that,
although improperly certified under a different subsection, manifestly belonged in
(b)(3). For instance, Dukes noted the importance of opt-out rights, but in the context
of already-accrued claims for individualized monetary backpay, which the Court
held should have been certified under (b)(3). Hecht v. United Collection Bureau,
691 F.3d 218 (2d Cir. 2012), similarly underscored the importance of opt-out rights,
but in an even-more-extreme circumstance: the class, though somehow certified
under (b)(2), had only sought damages claims in its complaint.
It is no coincidence that objectors’ opt-out authorities all involve either (b)(3)
actions or cases that should have been (b)(3) actions. Courts are justifiably
concerned about efforts to evade the protections of (b)(3) by shoehorning damages
!"#$% '()*+,' -./01$23% ''(* 4"5$% 88 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 216/512
44
claims into a (b)(2) class. But that is manifestly not the problem in a case like this,
where the damages claims are placed into a separate (b)(3) class with full opt-out
rights. Cf. Robinson, 267 F.3d at 165 (“Where class-wide injunctive or declaratory
relief is sought in a (b)(2) class action … adequate representation will generally
safeguard absent class members’ interests and thereby satisfy the strictures of due
process.”).
Moreover, in a (b)(2) settlement, a release of hypothetical and uncertain future
damages claims based on the injunction-modified, going-forward conduct is an
unobjectionable feature. Particularly in a (b)(2) class that includes substantial
prospective injunctive relief designed to address future violations, the future claims
“released” may well not exist if the injunction works as intended and helps restore
competitive conditions. Thus, objectors’ concerns amount to no less than a sweeping
contention that Rule 23(b)(2)—which does contemplate such settlements but does
not provide an opt-out right—is unconstitutional on its face. There is simply no
basis for arguing that due process, Rule 23, or anything else supports a per se rule
against foreclosing hypothetical future damages claims in a (b)(2)-certified class.
2. Objectors’ proposed bright-line rule—that a hypothetical future claim
seeking damages can never be foreclosed in the resolution of a (b)(2) class action—
is not only wholly unsupported, but unworkable. It would mean that (b)(2) classes
could be unproblematically certified for litigation, but become impossible to settle.
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 217/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 218/512
46
a similar settlement of the same underlying substantive claim unlawful if it were
negotiated by a class of merchants. Using the limited procedural device of Rule 23
to put class action plaintiffs on an inferior footing to individual plaintiffs in this
manner would squarely “abridge” substantive rights. Cf. Ortiz v. Fibreboard , 527
U.S. 815, 845 (1999) (noting potential Rules Enabling Act problem based on
“tension between the limited fund class action’s pro rata distribution in equity and
the rights of individual tort victims at law”). As the Supreme Court has stated, “[a]
class action … merely enables a federal court to adjudicate claims of multiple parties
at once, instead of in separate suits,” and “leaves the parties’ legal rights and duties
intact and the rules of decision unchanged.” Shady Grove Orthopedic v. Allstate,
559 U.S. 393, 406-08 (2010) (plurality opinion).
In the end, objectors fail to avoid the commonsense conclusion that this (b)(2)
class seeking only injunctive relief is a proper (b)(2) class. Though objectors have
concerns about the breadth of the relief and release, those arguments ultimately have
little to do with class certification and everything to do with the fairness of the
settlement. E.g., MA-Br. 38 (settlement “releases such claims entirely [for] no
changes … aside from limited surcharging relief”). Such concerns certainly do not
support a bright-line rule that class certification under Rule 23(b)(2) categorically
prohibits foreclosing future damages claims. None of this is to say that the release
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 219/512
47
of future claims should escape judicial scrutiny altogether, but it is to say that the
proper place for that analysis is in Rule 23(e).
D. Both the Rule 23(b)(2) Class and Rule 23(b)(3) Class Were
Adequately Represented.
1. Litigating (b)(2) and (b)(3) classes in tandem avoids problems by
protecting the opt-out rights of the members of the (b)(3) class; it does not remotely
introduce an adequacy-of-representation problem under Rule 23(a)(4). Adequacy
requires that the “representative parties will fairly and adequately protect the
interests of the class.” Fed. R. Civ. P. 23(a)(4). “[D]istrict courts must make sure
that the members of the class possess the same interests, and that no fundamental
conflicts exist among the members.” Charron, 731 F.3d at 249. As is well-settled
in this Court, “[a] conflict or potential conflict alone will not … necessarily defeat
class certification — the conflict must be ‘fundamental,’” Denney v. Deutsche Bank ,
443 F.3d 253, 268 (2d Cir. 2006), and go “‘to the very heart of the litigation.’”
Charron, 731 F.3d at 250.
Based on its deep familiarity with the litigation and parties, the district court
did not abuse its discretion in concluding that class representatives and counsel
“adequately represente[d] both the (b)(2) and the (b)(3) settlement classes.” SPA52.
Over an eight-year period, “experienced and able” class counsel “litigated the case
with skill and tenacity,” expending 500,000 hours of work on the case. SPA21, 61.
They “reviewed more than 50 million pages of documents in discovery and deposed
!"#$% '()*+,' -./01$23% ''(* 4"5$% 8; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 220/512
48
more than 400 witnesses.” SA103. And both the district court and the mediators
concluded that the intensive settlement negotiations were “fair,” “adversarial,” and
“conducted at arm’s length.” SPA21.
Indeed, this Court has said repeatedly that the inclusion of independent
mediators “helps to ensure that [settlement] proceedings were free of collusion and
undue pressure.” D’Amato, 236 F.3d at 85; Suffolk Cnty. v. Long Island Lighting,
907 F.2d 1295, 1323 (2d Cir. 1990). Here, counsel for the parties met jointly or
separately with one or both mediators — mediators the parties jointly selected — on
approximately 45 occasions. D.E. 2113-6 ¶¶175, 181. And those “structural
assurance[s] of fair and adequate representation” were further enhanced by the
participation of Judges Gleeson and Orenstein, pursuant to the request of all parties,
near the end of the process. Amchem, 521 U.S. at 627. Class representatives,
meanwhile, “participated in discovery, in mediation, in court sessions, in the
evaluation of the mediators’ proposals, and in the formulation of the Settlement
Agreement,” readily “fulfill[ing] all of the obligations associated with being class
representatives.” SPA52.
Beyond that, the settlement as a whole provides no “evidence of prejudice to
the interests of a subset of plaintiffs.” In re Literary Works Copyright Litig., 654
F.3d 242, 252 (2d Cir. 2011). This was not a “ pre-packaged” settlement that was
indicative of collusion between the lead plaintiffs and the defendants. Class counsel
!"#$% '()*+,' -./01$23% ''(* 4"5$% +6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 221/512
49
recommended settlement to the court only after years of hard-fought litigation.
Discovery was complete, motions for dismissal, summary judgment, and class
certification had been fully briefed and argued, and the parties had engaged in an
arduous four-year mediation process. Nor was this a settlement conceived of by
class counsel in collusion with the defendants; it was “the mediators’ proposal that
outlined the key components of what became the Settlement” (notably, a proposal
accepted by many current-objectors). SPA21. The mediators were not somehow
complicit in an effort to disadvantage an underrepresented subset of the class.
Nor was this a lowball settlement; it secures the largest-ever cash recovery in
an antitrust class action settlement and historic reforms of decades-old network rules.
The class representatives properly discharged their obligation to represent “the best
interests of the class as a whole,” “rather than … any individual members of it,” Fed.
R. Civ. P. 23 advisory committee notes (2003), achieving results that were not merely
adequate, but outstanding. See infra Part II.
2. Objectors nonetheless insist that there was a fundamental conflict of
interest between the (b)(2) and (b)(3) classes that rendered class representatives and
counsel incapable of adequately representing (b)(2) class members.7 Objectors
7 Objectors’ assertion that “class counsel fired their clients … so that all that
remained were class representatives committed to a deal that gave the (b)(3) classmoney in exchange for a broad release from the (b)(2) class” misstates the record.MA-Br. 70. The objectors that were formerly class representatives all agreed to themediators’ settlement proposal and participated in settlement conferences. Of those
!"#$% '()*+,' -./01$23% ''(* 4"5$% +' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 222/512
50
primarily attempt to analogize this case to Amchem, Ortiz, and other cases “involving
subgroups with … antagonistic interests.” MA-Br. 67. In those cases, objectors
contend, the Supreme Court emphasized the importance of creating subclasses and
appointing separate counsel for such “antagonistic” subgroups. But objectors
overread Amchem and Ortiz and, in search of a real conflict, imagine tradeoffs here
between retrospective damages and prospective injunctive relief.
Amchem and Ortiz do not remotely impose a per se requirement of separately
represented subclasses whenever there is tension among class members. Instead, the
Supreme Court required that intra-class conflicts be addressed by “structural
assurance[s] of fair and adequate representation,” of which subclasses are but one
example. See Amchem, 521 U.S. at 627 (“structure of the negotiations” matters as
well). Here, Judge Infante, Professor Green, Judge Gleeson, and Magistrate Judge
Orenstein all confirmed “a record that demonstrates beyond any reasonable doubt
that the negotiations were adver sarial and conducted at arm’s length.” SPA21
(emphasis added).
former class representatives, all but one agreed to the July 2012 Memorandum ofUnderstanding committing to the final settlement. Only after those then-classrepresentatives changed their minds, and often only after new counsel of record
appeared on their behalf, did class counsel move to withdraw as their counsel. SeeFed. R. Civ. P. 23 advisory committee notes (2003) (“class representatives do nothave an unfettered right to ‘fire’ class counsel” and “cannot command class counselto accept or reject a settlement proposal”).
!"#$% '()*+,' -./01$23% ''(* 4"5$% +( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 223/512
51
Moreover, Amchem and Ortiz involved “parties mov[ing] jointly for
conditional class certification and approval of a settlement agreement” where “[t]he
district court granted the motion without any litigation.” Joel A., 218 F.3d at 139
(distinguishing Amchem on this ground). Here, by contrast, the adequacy of
representation was demonstrated through years of contested litigation. Imposing a
separate representation requirement at the tail end would be wholly impractical, and
contrary to the interests of both classes by making simultaneous settlements of
damages and injunctive relief claims virtually impossible.
More fundamentally, the (b)(2) and (b)(3) classes here are not “subgroups
with … antagonistic interests.” Indeed, they are not subgroups at all — they are
largely one and the same group. Any merchant that was in business before
November 27, 2012 and continues to operate going forward will receive monetary
relief through the (b)(3) class (subject to an opt-out) and will benefit from the rule
changes obtained through the (b)(2) class.
Objectors note that the overlap between the two classes is not total . MA-Br.
75-76. But objectors cite no cases applying that stringent of a standard in evaluating
adequacy. Indeed, objectors primarily rely on Amchem, which involved a conflict
between two mutually exclusive groups—plaintiffs that were “currently injured” by
asbestos, and “exposure-only plaintiffs” that faced only potential future injuries. 521
U.S. at 595. There was thus a far more serious risk that counsel would be unable to
!"#$% '()*+,' -./01$23% ''(* 4"5$% +9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 224/512
52
simultaneously represent the interests of both groups. Id.; see also Ortiz , 527 U.S.
at 857 (“presently injured” versus “future claimants”; “Pre-1959 claimants” versus
“post-1959 claimants”); Eubank v. Pella, 753 F.3d 718, 721 (7th Cir. 2014)
(“customers who had already replaced or repaired their defective windows” versus
“those who hadn’t”).
Nor does this case remotely resemble In re Literary Works, 654 F.3d 242, in
which three categories of claims (A, B, and C) vied for an allocation of funds from
a fixed sum. Any increase in C’s allocation required a corresponding decrease in A
and B’s allocation. And if the claims exceeded the fixed sum, Category C claims
exclusively bore the brunt of any necessary reductions. In that context, this Court
reasonably found that Category C-only plaintiffs—the “largest contingent” of class
members—had diverging interests “as to the distribution of that recovery” from
plaintiffs with Category A and B claims. Id. at 252, 254. Here, those distribution
and tradeoff concerns have no bearing at all. The vast majority of plaintiffs had both
(b)(2) and (b)(3) claims, and both categories of plaintiffs sought distinct types of
relief that were not capped.
The near-total overlap between the (b)(2) and (b)(3) classes, moreover,
reinforces their complementary, not “antagonistic,” relationship. Objectors posit a
“structural dilemma” in (b)(2) and (b)(3) relief, whereby class representatives are
inherently driven to trade future-looking (b)(2) interests for present (b)(3) benefits.
!"#$% '()*+,' -./01$23% ''(* 4"5$% +* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 225/512
53
See MA-Br. 71 (“Representatives with present interests simply cannot fight for the
best possible relief for future-looking claims.”). But (b)(2) and (b)(3) have
peacefully co-existed for decades, and litigants routinely combine them when
seeking both prospective and retrospective relief. See supra n.6. There is simply no
support for objectors’ suggestion that these two standard forms of class actions
somehow become volatile when combined either in this case or more generally.
Here, the district court correctly recognized that the two types of relief worked
as essential and complementary components of one fair, reasonable, and adequate
remedy. And, precisely because (b)(2) and (b)(3) interests are typically aligned and
rooted in common claims, objectors fail to cite a single case citing a conflict of
interest between a (b)(2) and (b)(3) class that rendered class counsel unable to
represent both groups simultaneously. They exist as two “classes” not because of
factual “‘differences among members of a class … such that subclasses must be
established,’” Amchem, 521 U.S. at 627, but by virtue of Rule 23(b).8
8 Certain objectors contend that, although they are members of the merchantclass, they were not adequately represented because they do additional business ina non-merchant capacity. See American Express Br. 15-24; First Data Br. 25-34. Asthe district court correctly held, “[t]hese objectors seek to make something of
nothing.” SPA47. The settlement unambiguously “does not bar claims that a classmember may have in its capacity as a payment-card competitor, an ATM operator,or any other capacity other than as a merchant that accepts Visa and MasterCardcredit cards” in the United States. SPA47 (emphasis added).
!"#$% '()*+,' -./01$23% ''(* 4"5$% +8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 226/512
54
Nor is there any conflict of interest between present and future merchants
within the (b)(2) class. Objectors note that in Stephenson, certain “future” claimants
were deemed inadequately represented by class representatives who previously
negotiated a (b)(3) class settlement. But those “future” claimants had retrospective
damages claims for Agent Orange-related injuries sustained in the 1960s and 1970s
in Vietnam. This Court simply held that the veterans who became aware of their
Agent Orange-related injuries after 1994—when the (b)(3) settlement damages fund
was “deplet[ed],” leaving no more relief —were inadequately represented in
negotiations for that relief. 273 F.3d at 258.
Here, by contrast, the (b)(2) relief is prospective and will indivisibly benefit
all present and future merchants. Far from there being some radical asymmetry
between present merchants and those objectors who purport to be “predominantly
concerned with future injuries,” Blue Cross Br. 23, all merchants similarly benefit
from the rule reforms. Indeed, the vast majority of the class is composed of ongoing
merchants with as much of a concern with future injuries as any future merchants
that do not yet exist. See, e.g., Dewey v. Volkswagen, 681 F.3d 170, 185-86 (3d Cir.
2012) (“a ‘past’ claimant[] can continue to suffer leakage into the future to the same
extent as a future claimant”).
3. In the end, objectors cannot seriously dispute that class representatives
and counsel shared their interest in (b)(2) relief. Objectors instead lament that class
!"#$% '()*+,' -./01$23% ''(* 4"5$% ++ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 227/512
55
representatives had less interest and put “greater emphasis” on (b)(3) relief. MA-
Br. 68 (emphasis added). And so the alleged fundamental conflict ultimately boils
down to a difference in the degree of “emphasis” between two types of relief that
virtually all class members were jointly pursuing. That does not come close to an
adequacy defect necessitating separate counsel. “All class settlements … strike
compromises,” and if “compromises automatically created subclasses that required
separate representation, the class action procedure would become even more
cumbersome.” Charron, 731 F.3d at 253-54; see also Dewey, 681 F.3d at 186-87
(“To hold that … differing valuations [of class-wide relief] by themselves render the
representative plaintiff inadequate would all but eviscerate the class action device.”);
Gooch, 672 F.3d at 429.
In all events, there was no difference in emphasis between the two types of
relief . To be sure, comparing monetary to injunctive success is an imperfect
exercise, cf. Bendix v. Midwesco, 486 U.S. 888, 897 (1988) (Scalia, J., concurring)
(“like judging whether a particular line is longer than a particular rock is heavy”),
and would mean, perversely, that the greater the representatives’ monetary
achievement, the less adequate their representation. But as the district court properly
found, the value of the injunctive relief here “may very likely exceed the value of the
monetary relief in the long run.” SPA67 (emphasis added).
!"#$% '()*+,' -./01$23% ''(* 4"5$% +, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 228/512
56
Of course, objectors disagree with that assessment and think that the class
representatives and counsel should have held out longer for a better deal. But again,
that merely underscores that objectors’ driving concerns (which are meritless, see
infra Part II) relate to the reasonableness of the settlement relief and release. Again,
those issues do not escape judicial scrutiny altogether. But any such concerns should
be directed to Rule 23(e) and its analysis of the settlement’s overall fairness rather
than repackaged as an “adequacy” defect under Rule 23(a)(4). See, e.g., Petrovic v.
Amoco, 200 F.3d 1140, 1146 (8th Cir. 1999) (objectors’ “challenge [to] the propriety
of the award of compensation” was “more properly directed to the objectors’
contention that the settlement was not fair, adequate, and reasonable” than
adequacy).
II.
The District Court Acted Well Within Its Broad Discretion In Finding
The Overall Settlement Fair, Reasonable, and Adequate Under Rule
23(e).
Objectors’ various attacks on class certification in the guise of cohesion, due
process, and adequacy issues are really just flawed efforts to repackage unpersuasive
challenges to the overall fairness of the settlement. Those arguments fare no better
under the Rule 23(e) rubric where they belong. Rule 23(e)(2) does not demand that
the settlement be perfect; it need only fall within a “range of reasonableness.”
Grinnell , 495 F.2d at 463.
!"#$% '()*+,' -./01$23% ''(* 4"5$% +: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 229/512
57
The district court’s judgment that this settlement fell within that range of
reasonableness—rooted in the court’s unique “expos[ure] to the litigants, and their
strategies, positions and proofs”—warrants “considerable deference.” Joel A., 218
F.3d at 139. Indeed, the district court is owed “heightened” deference where, as
here, “experience has imparted to the judge a particularly high degree of
knowledge.” Id. The court’s discretionary judgment, moreover, was shared by the
two independent mediators who steered the negotiations and proposed the
parameters of the eventual agreement. D.E. 1111-2 ¶12; D.E. 1111-3 ¶33; see also
Wal-Mart , 396 F.3d at 116 (applying “presumption of fairness” to class settlement
“reached in arm’s-length negotiations between experienced, capable counsel after
meaningful discovery”). Those “in the best position to evaluate whether the
settlement constitutes a reasonable compromise,” Handschu, 787 F.2d at 833,
pronounced this settlement a more than reasonable resolution.
A. The Relief Obtained by the Class is Outstanding.
1. The $7.25 Billion Damages Fund is the Largest-Ever Cash Relief in
an Antitrust Class Action Settlement.
Against “the prospect of uncertain relief” years down the line, the settlement
secures “significant monetary compensation in the near future” in the form of an
estimated $7.25 billion damages fund. SPA23. That historic sum represents the
largest-ever cash relief in an antitrust class action settlement, and is more than double
the recovery in any previous private antitrust action. It is also the third-largest class
!"#$% '()*+,' -./01$23% ''(* 4"5$% +; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 230/512
58
action settlement in history. The notion that this massive monetary recovery could
somehow be inadequate beggars belief. Cf. Wal-Mart , 396 F.3d at 119 (describing
$3 billion settlement paid over ten years as “staggering”); In re Visa
Check/MasterMoney Antitrust Litig., 297 F. Supp. 2d 503, 512 (E.D.N.Y. 2003)
(approving $3 billion settlement paid over ten years).
Rather than attack the adequacy of this massive recovery, objectors ignore it
altogether. Objectors focus singularly on the (b)(2) injunctive relief, which they
denigrate as “[l]iterally nothing.” MA-Br. 76. But it is well-settled that the
reasonableness of a settlement must be “taken as a whole.” Maywalt v. Parker &
Parsley Petrol., 67 F.3d 1072, 1079 (2d Cir. 1995). “[I]t is not the Court’s
prerogative to pick and choose terms of the settlement, [or] redact portions of the
agreement.” McBean v. New York , 233 F.R.D. 377, 382 (S.D.N.Y. 2006). Thus,
courts look to the non-exhaustive “Grinnell factors” with a recognition that not every
factor must weigh in favor of settlement; “rather the court should consider the totality
of these factors in light of the particular circumstances.” Thompson v. Metro. Life,
216 F.R.D. 55, 61 (S.D.N.Y. 2003).
Objectors even go so far as to fault the district court for not conducting a
stand-alone Grinnell analysis “exclusively” for the (b)(2) relief. Merchant Trade
Groups’ Br. (“MTG-Br.”) 33-36. Objectors are mistaken about the value of the
(b)(2) relief, see infra Part II.A-2-4, and ignore that the district court specifically
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 231/512
59
addressed and affirmed that the (b)(2) relief was reasonable and reasonably justified
the release. SPA36-47. Their formalistic insistence on two separate multi-factor
Grinnell analyses—when the (b)(2) and (b)(3) analyses overlapped almost
entirely—is meritless and directly at odds with the holistic Rule 23(e) inquiry.
Unsurprisingly, courts addressing global settlements involving (b)(2) and (b)(3)
classes have not applied the Grinnell factors to each class in isolation. See, e.g.,
Charron v. Pinnacle Grp., 874 F. Supp. 2d 179, 196 (S.D.N.Y. 2012) (“the
Settlement … offers them redress for past injuries, while affording significant
systemic benefits (protocols, monitoring, lease audit, injunction)”); New England
Carpenters Fund v. First DataBank , 602 F. Supp. 2d 277, 281 (D. Mass. 2009) (“$2.7
million cash payment combined with the AWP rollback provisions constitutes a
reasonable settlement”). Indeed, objectors fail to cite a single example of what they
demand: a stand-alone “(b)(2) Grinnell analysis … focus[ed] exclusively on the
value of the rules changes, the impact of the mandatory release, and the risks of
litigating the injunctive claims.” MTG-Br. 34.
In any event, there is simply no brushing aside the “massive damages fund”
that promises millions of merchants long-awaited compensation for long-
accumulated overcharges. SPA61. When considered together with the valuable
injunctive reforms, the relief achieved was far more than “fair, reasonable, and
adequate.”
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 232/512
60
2. The Removal of Restraints on Surcharging Offers Valuable Relief.
The damages fund standing alone, while massive, would risk allowing
“merchant restraints [to], in effect, place the merchants back where they started,”
permitting the networks to simply “recoup any associated lost revenues by tinkering
with … other fees.” SPA16. Thus, the settlement also secures groundbreaking
injunctive reforms of several long-entrenched merchant restraints that had allowed
the networks and banks to charge excessive interchange fees—reforms that the
district court found “may very likely exceed the value of the monetary relief in the
long run.” SPA67 (emphasis added). These immediately effective rule reforms,
which “class members [could] take advantage of … now,” further counseled against
the alternative of pursuing “many more years of litigation while merchants continued
to be hamstrung by the no surcharge rules of Visa and MasterCard and remaining
anti-steering rules.” D.E. 2113-6 ¶185.
The “heart” of injunctive relief was the lifting of the networks’ bans on
surcharging. SPA22. Plaintiffs pushed “very hard to obtain” this change, and
defendants steadfastly resisted it. SPA36. From the inception of the litigation, the
anti-surcharging rules were viewed as a “linchpin to the problem, as far as the
merchants [were] concerned.” SPA9; see also D.E. 1165 at 3 (“foremost example”
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 233/512
61
of an anti-steering restraint). Even numerous objectors publicly touted the value of
surcharging relief.9
“For the first time” since the networks were created a half-century ago,
merchants can impose a surcharge on Visa and MasterCard credit card transactions
at the point of sale to recover the full costs of acceptance of such transactions and
steer customers to less costly payment methods and brands. SPA15. This marks a
sea change in the payment industry. Merchants gain valuable leverage from being
able to educate customers about the costs of accepting credit cards. In the district
court’s words, surcharges can finally “make transparent and avoidable what has been
opaque and inevitable.” SPA37. Levying a surcharge on credit card payments
enables merchants to steer customers towards using lower-cost and non-surcharged
payment methods or brands. D.E. 2111-5 (Frankel Decl.) ¶¶68-69.
A surcharge is even more effective than a discount in this regard because
customers react more strongly to losses from “perceived penalties (such as a
surcharge) than … perceived rewards.” Id . ¶48. Cash, check, and debit card
customers will no longer be forced to subsidize the additional costs of serving credit
9 See Credit Card Interchange Fees: Antitrust Concerns? Hearing Before S.
Comm. on the Judiciary, 109th Cong. 41 (2006) (NACS witness) (anti-surcharging
rule “is part of the reason why this is a broken market” and “should not exist”); id.at 28 (Merchants Payments Coalition) (anti-surcharging rule is “part of theiranticompetitive scheme to fix interchange fees” that “reinforces … price fixingefforts”).
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 234/512
62
card customers. Id . ¶35. As customers opt for cheaper payment methods and brands,
meanwhile, merchants may benefit from decreased card-acceptance costs and
increased revenues from the surcharges. Id . ¶¶68-69. In the long run, merchants
may lower their posted retail prices (further benefitting customers) and boost their
total sales.
Even the threat of surcharging benefits all merchants regardless of whether
they surcharge. The networks will face an incentive to lower or moderate their
interchange fees because they will lose more transactions if they maintain high
interchange fees with surcharging than without. The district court specifically noted
expert estimates that, in all, surcharging may save merchants “$26.4 to $62.8 billion
in acceptance costs over the next decade.” SPA35-36. It represents “an indisputably
procompetitive development that has the potential to alter the very core of the
problem this lawsuit was brought to challenge.” SPA35.
Objectors’ briefs are replete with references to the “illusory” and “limited
surcharging relief.” MA-Br. 38; MTG-Br. 54. But objectors do not deny, nor could
they, the pro-competitive effects of surcharging. Instead, drawing on various facts
external to the litigation and the settlement, they complain that lifting prohibitions
on surcharging does not guarantee that every merchant will begin affirmatively
surcharging. The district court considered and rejected each of those arguments as
“unpersuasive.” SPA36.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 235/512
63
First, objectors suggest various reasons why some merchants might choose
not to surcharge. For example, they note that some merchants operate in industries
that “are so competitive that surcharging is highly unlikely.” MA-Br. 55. As the
district court reasoned, “the mere fact that merchants may choose not to avail
themselves of the proposed relief … does not compel the conclusion that the
indisputably procompetitive rules changes are not a valuable achievement.” SPA41;
see also LaGarde v. Support.com, 2013 WL 1283325, at *6 (N.D. Cal. 2013) (while
“it is unknown as to how many class members will actually take advantage” of relief,
“these deficiencies do not weigh against a finding of fairness and adequacy”);
Handschu v. Special Servs. Div., 605 F. Supp. 1384, 1417 (S.D.N.Y. 1985), aff’d ,
787 F.2d 828 (2d Cir. 1986) (“The settlement does not achieve everything they wish
for. Few settlements do. But insisting on everything disregards the limitations …
arising out of present law….”).
Objectors also argue that American Express’s separate anti-surcharging rule
diminishes the value of surcharging relief. They contend that, because American
Express generally carries higher acceptance costs than Visa and MasterCard,
merchants will not surcharge Visa or MasterCard cards if it drives customers to
American Express. Thus, objectors reason, merchants who choose to maintain their
relationships with American Express would not be able to take advantage of
surcharging opportunities immediately.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 236/512
64
But, again, neither the court nor class counsel can control a merchant’s choice
to continue accepting cards issued by American Express or any other entity not a
party to this lawsuit. As the district court noted, objectors have “no solution for that
[American Express] problem … because there could not be one in this case,”
SPA42—even if plaintiffs had proceeded to trial and prevailed. But that does not
mean that the “American Express problem” is intractable, just that it is the subject
of a different lawsuit. In fact, American Express subsequently agreed, as part of a
settlement in a different class action, to allow merchant surcharging in certain
circumstances. See In re Am. Express Anti-Steering Rules Antitrust Litig. (II), No.
11-md-2221, D.E. 306-2 ¶8(e) (E.D.N.Y. Jan. 7, 2014). Thus, the settlement of this
case provided substantial relief vis-à-vis the defendants here, which is all that can
realistically be expected of this lawsuit, and the value of that relief became magnified
by external events.
Next, objectors point to laws on the books in approximately ten states that
would impede merchants from surcharging in those jurisdictions. Merchants in
those states previously faced two independent obstacles to surcharging—
prohibitions from the networks and from the states—and now face only one.
Objectors complain that the remaining state-law obstacle limits the value of the relief
for merchants in those states. But removing state-law obstacles again goes well
“beyond the scope of th[e] lawsuit.” SPA52. As the district court concluded, “[e]ven
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 237/512
65
if the objectors are right in contending that additional dominoes must fall before the
alleged anticompetitive behavior of Visa and MasterCard is eradicated, those
dominoes will have to fall in other forums.” SPA18.
In all events, objectors overstate the extent of the state-law obstacles and
understate the extent to which the relief obtained here will itself cause other
dominoes to fall. The district court noted that even in the ten states that limit
surcharging, “at least some state laws are enforced in a manner that prohibits
surcharging only when the merchant fails to sufficiently disclose the increased prices
for credit card use.” SPA38. Even if merchants in those states forgo surcharging
altogether, the court added, the fact that “interchange fees are set on a nationwide
basis” means that surcharging in other states—or even the threat of surcharging—
will exert downward competitive pressures on interchange fees to the benefit of all
merchants nation-wide. SPA38; see also In re Motor Fuel Sales Practices Litig .,
271 F.R.D. 263, 289 & n.36 (D. Kan. 2010) (all class members benefit; class
members from “non-conversion” states have “a right to purchase ATC fuel from
Costco in conversion states”).
Indeed, the relief imposed here puts undeniable pressure on those state laws.
It is one thing for state law to reinforce the uniform practice of Visa, MasterCard,
and American Express. It is quite another thing for state laws to remain as the only
obstacle to more-transparent pricing after contractual surcharging prohibitions have
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 238/512
66
been eliminated as part of antitrust settlements. In fact, just as the American Express
issue was addressed in separate litigation, these state laws are also under attack in
separate litigation. As the district court recognized, a recent decision barring
enforcement of one such law on constitutional grounds, see Expressions Hair Design
v. Schneiderman, 975 F. Supp. 2d 430 (S.D.N.Y. 2013) (appeal pending), indicates
that the dominoes may already be falling, and that independent events will only
magnify the already-substantial value of the surcharging relief.
Finally, objectors point to the potential for networks to enter bilateral
agreements with merchants and speculate that they could “offer[] [a] merchant a
break on its interchange rates in exchange for its agreement not to surcharge.” MA-
Br. 62. But far from “swallow[ing] the Settlement’s surcharging relief,” MTG-Br.
55, this underscores the broader benefits of that relief. As a direct result of the threat
to surcharge, networks may be pressured to moderate and make concessions on
interchange fees. See D.E. 2113-6 ¶196 (after Australia rescinded anti-surcharging
rules in 2003, merchants used threat of surcharging to negotiate significantly lower
American Express fees).
In the end, all merchants have an interest in lifting the anti-surcharging
restraints because “all merchants have the same interest in being able to inform
cardholders at the point of sale of the acceptance costs of their credit cards and to
either steer them to lower-cost alternatives or recoup the cost of acceptance.”
!"#$% '()*+,' -./01$23% ''(* 4"5$% ,: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 239/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 240/512
68
large merchants.” D.E. 2111-5 ¶56. Objectors do not deny that the reform is pro-
competitive; they merely question the extent to which it will be utilized. But again,
that “unknown … do[es] not weigh against a finding of fairness and adequacy.”
LaGarde, 2013 WL 1283325, at *6. As plaintiffs’ expert attested, even modest
competitive pressures on interchange fees produced by buying group efforts may
produce substantial savings. D.E. 2111-5 ¶¶55-57, 66.
Meanwhile, merchants were previously compelled in practice to accept Visa
or MasterCard cards at all their outlets and banners (brands) because the networks
made volume discounts on interchange fees contingent on that across-the-board
acceptance. The settlement’s all-outlets provision eliminates that practice.
Merchants may now accept Visa or MasterCard cards at some, but not all, of their
businesses without being penalized with the volume discounts. SPA140-41, 153-54
(Settlement ¶¶41, 54). Thus, for instance, a merchant can now decline to accept the
network’s cards at its discount store banner to keep costs and prices as low as
possible, yet continue to accept the cards in its other stores. Because the higher the
fees, the more likely the merchant is to refuse acceptance of a card brand, this rule
change will further “increase the elasticity of demand with respect to merchant fees,
and thus intensify the competitive constraints facing the Networks over the level of
their merchant fees.” D.E. 2111-5 ¶54.
!"#$% '()*+,' -./01$23% ''(* 4"5$% :6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 241/512
69
Finally, plaintiffs challenged Visa’s and MasterCard’s anti-discounting and
anti-minimum-price rules, which prevented merchants from offering discounts and
banned minimum purchase amounts for credit card usage. The Durbin Amendment
and DOJ Consent Judgment—developments that “piggybacked on [plaintiffs’]
efforts,” SPA59—took superseding steps toward dismantling those rules. They
enabled merchants to offer discounts, rebates, and other in-kind incentives and set
minimum purchase amounts, and required Visa and MasterCard to provide, at no
cost, services to help merchants determine the acceptance costs of Visa and
MasterCard credit cards.
The discounting, minimum-purchase, and cost information provisions of the
settlement now lock in, until 2021, the dismantling of those anti-steering restraints.
SPA139-40, 150-51, 153, 164 (Settlement ¶¶40, 44, 53, 57). The Durbin
Amendment and DOJ Consent Judgment, while achieving crucial tools, were also
subject to the vagaries of modification and repeal. The settlement firmly shields
those gains from erosion by the whims of public opinion or Rule 60(b) assertions of
changed circumstances, ensuring that they remain valuable enhancements to
merchants’ newfound ability to surcharge. Merchants are now assured of their
ability to offer discounts and minimum purchase rules in addition to, or in lieu of,
surcharges — an empowering toolbox with which they can steer customers toward
!"#$% '()*+,' -./01$23% ''(* 4"5$% :' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 242/512
70
more cost-effective payment methods, brands, and products, and incentivize
networks to keep interchange fees in check.
4. The Settlement Is Not Unreasonable Merely Because It Does Not
Include All of the Relief Sought by Objectors.
Based on its extensive knowledge of the litigation, the district court concluded
that rule reforms achieved would “meaningfully blunt” any lingering
anticompetitive effects of the Honor-all-Cards and default-interchange rules.
SPA45, 61. Objectors, however, lament the fact that this settlement does not obtain
the wholesale rescission of the Honor-all-Cards and default-interchange rules as
well. MA-Br. 14, 17. That objectors (like any plaintiff) would have preferred even
more relief is understandable. But as this Court has said time and again: “Each side
gives up a number of things. This is the way settlements usually work.” Wal-Mart ,
396 F.3d at 113. “The fact that a proposed settlement may only amount to a fraction
of the potential recovery does not, in and of itself, mean that the proposed settlement
is grossly inadequate and should be disapproved.” Grinnell, 495 F.2d at 455 & n.2;
see also Handschu, 605 F. Supp. at 1385 (“It is beside the point for objectors to …
criticize the settlement because it falls short of a state of law they devoutly desire
but have not yet achieved”).
As they did below, o bjectors fail to grapple with the “limitations on the relief
that would be available even if success were achieved” and “assum[e] that a
complete victory on the merits is a foregone conclusion.” SPA25-26. But continuing
!"#$% '()*+,' -./01$23% ''(* 4"5$% :( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 243/512
71
with litigation was not without serious risks. See Defendants-Appellees Br. Part I.A-
2. In fact, the district court noted that plaintiffs faced an uphill battle on their
challenges to the default interchange and Honor-all-Cards rules. The district court
pointedly criticized objectors for “assum[ing] that default interchange is inherently
illegal, [when] in reality it is a very complicated issue.” SPA29. It noted that no
court had “ever held that Visa or MasterCard’s default interchange rules violate the
antitrust laws,” and that the practices had procompetitive effects for consumers that
may have outweighed any anticompetitive harm. SPA30.
The district court further questioned whether a court could even permissibly
engage in “the regulation of interchange fees … if the plaintiffs obtained a complete
victory on the merits.” SPA14, 16. Likewise, the court noted that plaintiffs would
have to confront adverse caselaw implicating the Honor-all-Cards rule that made it
“no sure thing … that Class Plaintiffs will be able to prove they have anticompetitive
effects to such an extent that they violate the antitrust laws.” SPA32. The district
court also discussed risks that plaintiffs may have faced in establishing damages and
maintaining class status.
In light of the substantial delays and uncertainties that extending the litigation
for many more years would entail, it was eminently reasonable to conclude that the
settlement relief — most of which was immediately effective — was the best possible
outcome for plaintiffs. Under the totality of the circumstances, the settlement easily
!"#$% '()*+,' -./01$23% ''(* 4"5$% :9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 244/512
72
falls within a “range of reasonableness.” That the settlement does not obtain all of
the relief that some objectors would have preferred does not in any way take it
outside that realm of reasonableness.
B. The Standard Release Conforms With All Applicable Law.
In exchange for the substantial damages and restructured network practices,
the settlement releases all claims “that are alleged or which could have been alleged”
by plaintiffs in this litigation.10 SPA169 (Settlement ¶68). That is a standard form
of release that courts have repeatedly approved in class settlements. It is a form of
release, moreover, that this Court has recognized is “often” pivotal to “achieve
comprehensive settlement of class actions.” In re Literary Works, 654 F.3d at 247-
48; see also Wal-Mart , 396 F.3d at 106 (“‘[c]lass action settlements simply will not
occur if the parties cannot set definitive limits on defendants’ liability’”).
Objectors complain about the release of hypothetical and uncertain future
claims seeking damages, but that is really just a reprise of their mistaken criticisms
of the settlement reforms as “[l]iterally nothing.” MA-Br. 76. The structural reforms
are, as the district court found, designed to provide substantial and “meaningful”
10 See SPA169-70 (Settlement ¶68) (releasing claims “arising out of or relating inany way to any conduct, acts, transactions, events, occurrences, statements,
omissions, or failures to act of any Rule 23(b)(2) Settlement Class Released Partythat are alleged or which could have been alleged from the beginning of time untilthe date of the Court’s entry of the Class Settlement Preliminary Approval Order”)(emphasis added).
!"#$% '()*+,' -./01$23% ''(* 4"5$% :* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 245/512
73
relief. SPA15. There is nothing unusual about foreclosing hypothetical future claims
based on conduct addressed prospectively by a valid injunction. The injunction’s
immediately-effective, meaningful reforms—coupled with other industry reforms
triggered by this litigation, such as the separation of the payment networks from the
banks, the DOJ Consent Judgment, and the Durbin Amendment—dramatically
change the landscape going forward, such that the value of any foreclosed future
claims will likely be de minimis.
Moreover, as the district court correctly concluded, the release covers “only
the claims that may properly be extinguished by the settlement of a class action.”
SPA44. It is of no moment that the release covers rules and practices that were not
expressly challenged in this action. The four corners of a complaint have never
delineated the outer bounds of a release. To the contrary, it is well-settled that “class
action releases may include claims not presented and even those which could not
have been presented as long as the released conduct arises out of the ‘identical
factual predicate’ as the settled conduct.” Wal-Mart , 396 F.3d at 107. Time and
again, this Court has approved nearly identical releases as consistent with the
“identical factual predicate” test. Cf. Visa Check , 297 F. Supp. 2d at 512 (“‘claims
which have been asserted or could have been asserted’”); In re Literary Works, 654
F.3d at 247 (“claims that were or could have been pled”).
!"#$% '()*+,' -./01$23% ''(* 4"5$% :8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 246/512
74
That is all that this straightforward release does. As the district court
determined, the settlement simply “releases … claims that are or could have been
alleged based on the identical factual predicate of the claims in this case.” SPA46.
At the final approval hearing, defendants agreed unequivocally—as they reiterate
here, Defendants-Appellees’ Br. Part II—that “the release is limited by the Identical
Factual Predicate Doctrine which is the law of the Second Circuit.” D.E. 6094 at
36 (emphasis added); see also id. (Defs: “Nobody is proposing that the release be
construed beyond the Identical Factual Predicate Doctrine.”).
Claims about the rules and conduct that enabled the networks to maintain
supra-competitive default interchange fees, their IPOs, or their status as structural
conspiracies by virtue of their rules, are thus released. Claims about any new rules
and conduct are not released.11 Claims about any reversion to the pre-settlement
rules are likewise not released. See id . at 228-29 (defendants agreeing with
plaintiffs’ list of conduct not covered by the release). The district “court’s findings
regarding the parties’ intentions will be respected on appeal unless they are clearly
erroneous.” W. Alton Jones Found. v. Chevron, 97 F.3d 29, 33 (2d Cir. 1996).
11 This release is thus far afield from the release rejected in Nat’l Super Spuds v.
N.Y. Mercantile Exch. , 660 F.2d 9 (2d Cir. 1981). There, the release of claims based
on “unliquidated” contracts was deemed improper when the claims, the complaint,the class certification opinion, and the settlement notice all exclusively concerned“liquidated” contracts. Id. at 16-17. Even “class action plaintiffs did not purport torepresent” anyone with “claims based on unliquidated contracts.” Id. at 17.
!"#$% '()*+,' -./01$23% ''(* 4"5$% :+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 247/512
75
Indeed, “‘[f]ew persons are in a better position to understand the meaning of a
[settlement] than the district judge who oversaw and approved it.’” United States v.
Local 359, United Seafood Workers, 55 F.3d 64, 68 (2d Cir. 1995).
For clarity’s sake, the settlement notes that the released claims include future
claims based on the networks’ “continued … adherence” to (1) rules or conduct left
unmodified by the settlement that are challenged or could have been challenged, (2)
rules or conduct modified by the settlement, and (3) rules or conduct “substantially
similar” to (1) or (2). SPA171 (Settlement ¶68(g)-(h)). That unremarkable provision
merely bars collateral attacks on continued adherence to the practices agreed upon
in the settlement. See In re Literary Works, 654 F.3d at 248 (“release of claims
regarding future infringements is not improper”).12
As the district court noted, there may well be “room for litigation over whether
future rules are ‘substantially similar,’” but the limitation ensures that only non-
substantive changes to the agreed-upon, going-forward rules and conduct are
released. SPA47. As the court reasonably explained, that limitation appropriately
cabins the release, and there is no need for an advisory opinion that would “catalog
here all the claims that fall within or without the release.” SPA47. That accords
with the settled principle “that the court conducting the action cannot predetermine
12 Contrary to objectors’ insinuations, see MA-Br. 76, the release would not applyif defendants were, after 2021, to revert to their previous rules.
!"#$% '()*+,' -./01$23% ''(* 4"5$% :, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 248/512
76
the res judicata effect of the judgment; this can be tested only in a subsequent
action.” Fed. R. Civ. P. 23 advisory committee notes (1966).
The “substantially similar” limitation likewise readily distinguishes the
various cases, cited by objectors, in which courts have found releases of future
claims to violate public policy. In Lawlor v. National Screen Service, 349 U.S. 322
(1955), for instance, the Supreme Court suggested that “a partial immunity from
civil liability for future violations” would be “consistent with neither the antitrust
laws nor the doctrine of res judicata.” Id. at 329. The released claims, however,
involved conduct that was “all subsequent to the … judgment,” “did not even then
exist [at the time of settlement] and … could not possibly have been sued upon in
the previous case.” Id. at 328. This release, by contrast, bars only claims “that are
alleged or which could have been alleged” in this case, including future claims
arising out of the practices sanctioned in the structural reforms embraced by the
district court.13
13 See also Williams v. G.E. Capital , 159 F.3d 266, 274 (7th Cir. 1998) (enforcingrelease of claims that “even if … not ripe” were “closely enough related to the[released] disclosure claims that everything could be resolved in the settlement”); Inre Managed Care Litig ., 2010 WL 6532985, at *12 (S.D. Fla. 2010) (enforcingrelease barring lawsuit based on continuation of pre-release conduct); Schwarz v.
Dall. Cowboys, 2001 WL 1689714, at *1 (E.D. Pa. 2001) (approving release of “a
continuation of such policies, practices, contracts, conduct or provisions”); see alsoVKK Corp. v. NFL, 244 F.3d 114, 126 (2d Cir. 2001) (“It is not uncommon … for arelease to prevent the releasor from bringing suit against the releasee for engagingin a conspiracy that is later alleged to have continued after the release’s execution.”).
!"#$% '()*+,' -./01$23% ''(* 4"5$% :: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 249/512
77
Nor can this release be said to grant antitrust “immunity,” when the challenged
conduct has not been held by the courts to be “clearly illegal” under the antitrust
laws. Robertson v. NBA, 556 F.2d 682, 686 (2d Cir. 1977). It is well-settled that a
court should not reject a settlement on grounds that it authorizes illegality if “‘the
alleged illegality … is not a legal certainty’”; that would “in effect try the case by
deciding unsettled legal questions.” Id.; see also Armstrong v. Bd. of Sch. Dirs., 616
F.2d 305, 321 (7th Cir. 1980) (“before a settlement may be rejected because it
initiates or authorizes a clearly illegal or unconstitutional practice, prior judicial
decisions must have found that practice to be illegal or unconstitutional as a general
rule”).
More generally, there is no basis to adopt objectors’ maximalist interpretation
of the release to conjure up a due process or public policy problem. Under bedrock
canons of contract construction and constitutional avoidance, this Court need only
read the release consistent with its standard terms, rather than impute an intent to
invite objectors’ parade of horribles. See In re Johns-Manville, 759 F.3d 206, 216
(2d Cir. 2014) (“common canons of contract construction call upon us to reject …
an interpretation” that assumes order “bound entities without constitutionally
sufficient notice”). Indeed, the Due Process Clause is the ultimate backstop.
Precisely because a release cannot release claims in a manner that deprives future
litigants of their due process rights, releases are interpreted to reflect, not violate,
!"#$% '()*+,' -./01$23% ''(* 4"5$% :; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 250/512
78
those limits. See id. (interpreting order to “bar claims only by those parties that
received constitutionally sufficient notice”). Any future concerns that those limits
are being crossed can be addressed if and when such issues actually arise.
In short, the (b)(2) release here is a standard provision, fully consistent with
due process, that reflects the importance of the structural relief and the practical
necessity of giving defendants legal peace in exchange for the substantial relief
obtained. The district court’s considered judgment that the release is a proper
component of a fair, reasonable, and adequate settlement warrants deference and
should be affirmed.
III.
The District Court Acted Well Within Its Broad Discretion In Finding
The Fee Award Reasonable.
“In a certified class action, the court may award reasonable attorney’s fees.”
Fed. R. Civ. P. 23(h). The key consideration is what is “‘reasonable’ under the
circumstances.” Goldberger , 209 F.3d at 47. The circumstances here include nearly
a decade of hard-fought litigation, the largest antitrust class action settlement award
in history, and injunctive relief that likely will prove more valuable still. The district
court approved a $544.8 million attorneys’ fee—approximately 9.56% of the net
cash fund, after opt-out reductions—as a reasonable award )?,2K these “)?>Q)2 JFOBL
and circumstances of the settlement.” (RP%9' 1@FB determination, laid out in a
dedicated fees opinion with painstaking transparency and detail, falls comfortably
within the district court’s ample discretion and should be affirmed.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;6 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 251/512
79
The district court here grounded its analysis in the “unique … size, duration,
complexity, and … relief” of this case. SPA56. Class counsel and the nearly 60
additional law firms that worked on the case went toe-to-toe with a group of the
nation’s largest financial institutions and their talented counsel over an eight-year
period. They devoted, by conservative estimates, 500,000 hours of time to the case
without assurance of any compensation. The litigation was of “singular size and
complexity,” raising a plethora of difficult issues that went to the heart of how the
payment card industry has operated since its inception. SPA62. Each class
member’s share of that award was well below that which any class member would
have paid to prosecute this action and below what private plaintiffs typically pay.
See D.E. 2113-5 (Silver Decl.) at 25-34.
A handful of objectors take issue with the court’s assessment of individual
factors under the traditional six-factor framework of Goldberger , 209 F.3d at 50
(factors include “‘/65 B@2 B>M2 F?, GFAIK 23*2?,2, AH OI)?L2GS /+5 B@2 MFD?>B),2 F?,
OIM*G23>B>2L IJ B@2 G>B>DFB>I?S /.5 B@2 K>LT IJ B@2 G>B>DFB>I? … S /:5 B@2 Q)FG>BH IJ
K2*K2L2?BFB>I?S /#5 B@2 K2Q)2LB2, J22 >? K2GFB>I? BI B@2 L2BBG2M2?BS F?, /%5 *)AG>O
*IG>OH OI?L>,2KFB>I?L’”). U)B ?I?2 BFT2 >LL)2 with the “most important Goldberger
factor”—the risk of the litigation— which indisputably weighed in favor of a sizeable
fee. SPA59. As the district court explained, “[i]f not for the attorneys’ willingness
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 252/512
80
to endure for many years the risk that their extraordinary efforts would go
uncompensated, the settlement would not exist.” SPA59.
Objectors instead appear to quibble with the district court’s assessment of the
“quality of representation” and “the requested fee in relation to the settlement,”
rehashing their objections to the settlement itself. E.g., Unlimited Vacations Br. 9
(this “is a negative value settlement” where “[c]lass members would be better off
with no settlement at all”). Those hyperbolic criticisms are as unavailing in the fee
context as in the settlement context. As the district court found, the settlement
secured not only a “massive damages” award, but crucial programmatic reforms of
“great value” that together constitute a “significant success.” SPA60-61. Nothing
objectors say warrants disturbing that determination, much less overturning the
court’s weighing of the Goldberger factors as a whole.
Objectors’ criticisms of the district court’s graduated fee schedule similarly
rest on those mistaken premises. To calculate the fee, the district court adopted a
sliding scale that fixed the percentage of the fund to which counsel was entitled
through a declining schedule, thus addressing the worry that “‘it is not ten times as
difficult to prepare, and try or settle a 10 million dollar case as it is to try a 1 million
dollar case.’” Goldberger , 209 F.3d at 52. Thus, the court awarded counsel 33% (a
common contingency fee arrangement in less complex class actions) of the first $10
million of the fund, 30% of the next $40 million, 25% of the next $50 million, and
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;( '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 253/512
81
so forth, with percentages declining as the fund increased. The schedule was based
on “empirical studies” of “federal class action settlements in recent years” and “the
unique facts and circumstances of the settlement.” SPA64, 67, 69.
Objectors would like the scale to slide more steeply, rehashing their
complaints about the underlying settlement. Unlimited Vacations Br. 17; see id. at
19 (urging “percentages of 4%, 3% and 2%, instead of Judge Gleeson’s 10%, 8%
and 6%”). As explained, however, class counsel more than adequately represented
both the (b)(2) and (b)(3) classes. And in all events, the district court hardly exited
the realm of reasonableness in using one set of numbers rather than objectors’
preferred figures.
Finally, some objectors appear to view any increase above the lodestar amount
as an undeserved windfall. In fact, courts regularly approve fees that reflect a
multiplier from the lodestar, and the multiplier here—3.41—is squarely in the range
of previously approved multipliers. As the district court explained, 3.41 is
“OIM*FKFAG2 BI />?,22,! ?2FKGH >,2?B>OFG BI5 B@2 I?2 V FWFK,2, >? B@2 6/7 – ;/$0 OFL2
B2? H2FKL FDI! F?, >B >L FGLI OIM*FKFAG2 BI M)GB>*G>2KL >? IB@2K GFKD2! OIM*G23 OFL2L'”
(RP-4S )<* !" $% 6'$789': (%)* 4-0-5 '! .$$ &' ()**' +, .69! .#: – #9 /('0'<'='
+44#5 /F**KIN>?D M)GB>*G>2K IJ :'4 >? X.'# A>GG>I? OIM*G23 L2O)K>B>2L OFL25S !" $%
&"$'" (%)*+ ,%$-./0-.% 1 &2!(3 4-0-5*! #$% &' ()**' +, -.+! $4. /('0' 123' +44$5
(“[A] multiplier of 5.2 is warranted, given the unmatched size of the … K2OIN2KH!
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;9 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 254/512
82
B@2 IALBFOG2L F?, K>LTL JFO2, AH COI)?L2GE JKIM B@2 A2D>??>?D! F?, B@2 LT>GG F?,
commitment exhibited by counsel.”)S In re Vitamin C Antitrust Litig ., +46+ 78
#+$9#6:! FB Y64 /;'0'<'=' +46+5 (“‘GI,2LBFK M)GB>*G2L IJ A2BW22? . F?, :'# @F,
‘become common’”)' P?, >B K2JG2OBL F LMFGG2K M)GB>*G>2K B@F? B@FB F**KIN2, >? =->/
9?%)@ ! +9- &' ()**' +, FB #+:! W@>O@ B@>L LFM2 ,>LBK>OB OI)KB *K2L>,2, IN2K F?,
K2DFK,2, FL L)ALBF?B>FGGH G2LL “challenging.” SPA63.
At bottom, there is no basis to disturb the district court’s fee award as an abuse
of discretion.
IV. The District Court Acted Well Within Its Broad Discretion In Finding
The Settlement Notice Reasonable.
The standard for an adequate settlement notice, whether analyzed under the
Due Process Clause or Rule 23, is one of reasonableness. See Soberal–Perez , 717
F.2d at 43; Fed. R. Civ. P. 23(e)(1). “There are no rigid rules to determine whether
a settlement notice to the class satisfies constitutional or Rule 23(e) requirements.”
Wal-Mart , 396 F.3d at 114. This Court has said that a notice need only “‘fairly
apprise the prospective members of the class of the terms of the proposed settlement
and of the options that are open to them in connection with [the] proceedings.’”
Weinberger v. Kendrick , 698 F.2d 61, 70 (2d Cir. 1982). Accordingly, “[n]umerous
decisions, no doubt recognizing that notices to class members can practicably
contain only a limited amount of information, have approved ‘very general
description[s] of the proposed settlement.’” Id.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;* '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 255/512
83
The district court found that the notice supplied here easily met that standard:
“It described the litigation, summarized the settlement’s terms, quoted the releases
verbatim, described the request for attorneys’ fees, expenses, and incentive awards
for Class Plaintiffs, and explained the deadline and procedure for filing objections
to the settlement as well as opting out of the case settlement class.” SPA51. The
notice also notified class members of how they could obtain more information from
class counsel or the Class Administrator though a toll-free number, a website, and
traditional channels including mail and telephone. To ensure accessibility to “the
average class member,” 4 Newberg on Class Actions § 11:53, class counsel even
consulted a plain language expert in the drafting, and made the notice and website
available in eight languages. D.E. 2111-7 (Azari Decl. ¶9); D.E. 2111-6 (Hamann
Decl. ¶31).
To maximize notice circulation, class counsel worked closely with the Class
Administrator to identify class members and compile a database of 19,874,922
unique mailing addresses, later supplemented by an additional 969,970. See D.E.
2111-6 ¶¶12, 18-19. In all, the “notice and publication campaign … included more
than 20 million mailings and publication in more than 400 publications.” SPA12.
Moreover, the notice “prompt[ed] widespread reaction from class members,” further
demonstrating that it had “served its due process purpose.” Handschu, 787 F.2d at
833; see D.E. 2111-6 ¶26 (over 93,000 calls to toll-free number from December 2012
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;8 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 256/512
84
through April 2013); id . ¶¶29, 32 (over 3.743 million website visitors in two
months).
The district court considered and rejected certain objectors’ claims that the
notice contained false statements. Objectors raised these arguments repeatedly, at
preliminary approval, at final approval, and at proceedings regarding the misleading
websites some objectors had created (where the district court nearly held several
objectors in contempt, SPA14). Each time, the district court rejected the challenges
to the settlement notice as meritless. Nonetheless, objectors reiterate their thrice-
rejected claim that the notice was misleading because any changes to the anti-
discounting network rules stem from the DOJ Consent Judgment, not from the
settlement. As the district court correctly held, the notice was fully accurate. It
appropriately refers to anti-discounting rule changes because the settlement creates
an affirmative network obligation to permit discounting, independent of the Consent
Judgment. Indeed, the settlement locks in the discounting reforms of the Consent
Judgment until 2021, ensuring that the changes will be unaffected even if the
Consent Judgment is vacated.
Objectors further contend that the notice contains no disclosure of the size of
the class, the aggregate damages suffered, the average loss per class member
quantified as a percentage of the class members’ sales to customers using Visa and
MasterCard, and the percentage of the aggregate damages that comprise the
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;+ '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 257/512
85
settlement benefit. Optical Etc. Br. 3. But those arguments fare no better. “Neither
Rule 23 nor due process … requires that the notice report the estimated value of
damages.” Thompson, 216 F.R.D. at 67; see also id. (rejecting criticism that the
notice failed to detail class member’s individual benefits).
In the end, there is absolutely no basis to disturb the district court’s
determination that the settlement notice was “‘the best practicable, reasonably
calculated, under all the circumstances, to apprise interested parties of the pendency
of the action and afford them an opportunity to present their objections.’” Hecht ,
691 F.3d at 224. By conveying “enough information about the settlement and its
implications for participants to enable class members to make an informed decision
about whether to be heard concerning the settlement or, if allowed, to opt-out,” 2
McLaughlin on Class Actions § 6:17, the notice plainly suffices.
CONCLUSION
This class action resulted in one of the largest class recoveries ever realized.
It also resulted in wide-ranging changes to the way the payment card industry
operates, both directly through the injunctive relief realized, and indirectly through
the federal legislation and enforcement actions that this litigation prompted. The
monetary recovery and injunctive relief provided by the settlement grant significant
benefits to all class members, including compensation for past harm and protection
against future injury. In the judgment of the district court, and the highly
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;, '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 258/512
86
experienced mediators who assisted the court in facilitating the resolution of these
complex and challenging claims, the settlement was not only appropriate, but
compelling.
On this record, the district court did not abuse its considerable discretion in
approving the settlement, awarding fees to class counsel, and in approving notice of
the settlement to class members. The decision of the district court should be affirmed
in all respects.
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;: '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 259/512
87
Respectfully submitted,
K. CRAIG WILDFANG THOMAS J. U NDLIN R YAN W. MARTH BERNARD PERSKY ROBINS, KAPLAN, MILLER &
CIRESI L.L.P. 800 LaSalle Avenue Minneapolis, MN 55402
H. LADDIE MONTAGUE MERRILL G. DAVIDOFF MICHAEL J. K ANE BERGER & MONTAGUE, P.C. 1622 Locust Street Philadelphia, PA 19103
BONNY E. SWEENEY JOSEPH DAVID DALEY ALEXANDRA SENYA BERNAY ROBBINS GELLER RUDMAN &
DOWD LLP 655 West Broadway Suite 1900 San Diego, CA 92101
s/Paul D. Clement PAUL D. CLEMENT Counsel of Record
JEFFREY M. HARRIS CANDICE C. WONG BANCROFT PLLC 1919 M Street NW Suite 470Washington, DC 20036 (202) 234-0090
JOSEPH GOLDBERG FREEDMAN BOYD GOLDBERGURIAS & WARD, P.A. 20 First Plaza Suite 700 Albuquerque, NM 87102
Counsel for Plaintiffs-Appellees
October 15, 2014
!"#$% '()*+,' -./01$23% ''(* 4"5$% ;; '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 260/512
CERTIFICATE OF COMPLIANCE
WITH TYPE-VOLUME LIMITATION
I hereby certify that:
1. This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) and the order issued on October 2, 2014 granting Plaintiffs-Appellees’
motion for leave to file a brief of up to 20,000 words because it contains 19,976
words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
2. This Brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the typestyle requirements of Fed. R. App. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface using Microsoft Word 2013 in 14-
point font.
October 15, 2014
s/Candice C. Wong Candice C. Wong
!"#$% '()*+,' -./01$23% ''(* 4"5$% '66 '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 261/512
CERTIFICATE OF SERVICE
I hereby certify that, on October 15, 2014, an electronic copy of this Brief for
Plaintiffs-Appellees was filed with the Clerk of Court using the ECF system, thereby
serving all counsel of record.
s/Paul D. Clement Paul D. Clement
!"#$% '()*+,' -./01$23% ''(* 4"5$% '6' '67'87(6'* '9*89,, '6'
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 262/512
12-4671-cv(L)
!"#$%& ($)$%* +,-.$ ,/ 011%)2*/,. $3%
(%4,"& +#.4-#$
IN RE PAYMENT CARD INTERCHANGE FEE ANDMERCHANT DISCOUNT ANTITRUST LITIGATION
___________________________
On Appeal from the United States District Court for the Eastern District of New York (Gleeson, J.)
JOINT PAGE PROOF BRIEF OFDEFENDANTS-APPELLEES
BENJAMIN R. NAGIN
EAMON P. JOYCE
MARK D. TATICCHI
SIDLEY AUSTIN LLP787 Seventh Avenue
New York, NY 10019
CARTER G. PHILLIPS
SIDLEY AUSTIN LLP1501 K Street, NWWashington, DC 20005(202) [email protected]
DAVID F. GRAHAM
R OBERT N. HOCHMAN
SIDLEY AUSTIN LLPOne South Dearborn StreetChicago, IL 60603
Attorneys for Defendants-Appellees Citigroup Inc., Citibank, N.A., and Citicorp(See Inside Cover for Additional Counsel and Parties)
12-4708-cv(CON), 12-4765-cv(CON), 13-4719-cv(CON), 13-4750-cv(CON), 13-4751-cv(CON),13-4752-cv(CON), 14-0032-cv(CON), 14-0117-cv(CON), 14-0119-cv(CON), 14-0133-cv(CON),14-0157-cv(CON), 14-0159-cv(CON), 14-0192-cv(CON), 14-0197-cv(CON), 14-0219-cv(CON),14-0225-cv(CON), 14-0241-cv(CON), 14-0250-cv(CON), 14-0266-cv(CON), 14-0303-cv(CON),
14-0331-cv(CON), 14-0349-cv(CON), 14-0379-cv(CON), 14-0404-cv(CON), 14-0422-cv(CON),14-0443-cv(CON), 14-0480-cv(CON), 14-0497-cv(CON), 14-0530-cv(CON), 14-0567-cv(CON),
14-0584-cv(CON), 14-0606-cv(CON), 14-0663-cv(CON), 14-0837-cv(CON)
!"#$% '()*+,' -./01$23% ''(4 5"6$% ' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 263/512
R OBERT C. MASON
ARNOLD & PORTER LLP399 Park Avenue
New York, NY 10022(212) [email protected]
R OBERT J. VIZAS
ARNOLD & PORTER LLPThree Embarcadero Center, 10th Floor San Francisco, CA 94111
MARK R. MERLEY
MATTHEW A. EISENSTEIN
ARNOLD & PORTER LLP555 12th Street, NWWashington, DC 20004
R ICHARD J. HOLWELL
MICHAEL S. SHUSTER
DEMIAN A. ORDWAY
HOLWELL SHUSTER & GOLDBERG LLP125 Broad Street, 39th Floor
New York, NY 10004(646) [email protected]
Attorneys for Defendants-AppelleesVisa Inc., Visa U.S.A. Inc., and
Visa International Service Association*
K EILA D. R AVELO
WESLEY R. POWELL
WILLKIE FARR & GALLAGHER LLP787 Seventh Avenue
New York, NY 10019
K ENNETH A. GALLO
PAUL, WEISS, R IFKIND, WHARTON
& GARRISON LLP2001 K Street, NWWashington, DC 20006(202) [email protected]
GARY R. CARNEY
PAUL, WEISS, R IFKIND, WHARTON
& GARRISON LLP1285 Avenue of the Americas
New York, NY 10019
Attorneys for Defendants-Appellees
MasterCard Incorporated and
MasterCard International Incorporated
(See Next Page for Additional Counsel and Parties)
* Arnold & Porter LLP is counsel to the Visa Defendants-Appellees except as to Objectors-AppellantsBarnes & Noble, Inc., Barnes & Noble College Booksellers LLC, J.C. Penney Corporation, and The TJXCompanies, Inc. and related entities.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 264/512
MARK P. LADNER
MICHAEL B. MILLER
MORRISON & FOERSTER LLP250 West 55th Street
New York, NY 10019(212) [email protected]
Attorneys for Defendants-Appellees Bankof America, N.A., BA Merchant Services
LLC (f/k/a National Processing, Inc.),
Bank of America Corporation, and FIA
Card Services, N.A. (f/k/a MBNA
America Bank, N.A. and Bank of
America, N.A. (USA))
A NDREW J. FRACKMAN
ABBY F. R UDZIN
O’MELVENY & MYERS LLPTimes Square Tower 7 Times Square
New York, NY 10036(212) [email protected]
Attorneys for Defendants-Appellees Capital
One Bank (USA), N.A., Capital One
F.S.B., and Capital One Financial
Corporation
JAMES P. TALLON
SHEARMAN & STERLING LLP599 Lexington Avenue
New York, NY 10022(212) 848-4000
Attorneys for Defendants-Appellees
Barclays Bank plc (in its individualcapacity and as successor in interest to
Barclays Financial Corp.) and Barclays
Bank Delaware
R ICHARD L. CREIGHTON
DREW M. HICKS
K EATING MUETHING & K LEKAMP PLLOne East Fourth Street, Suite 1400Cincinnati, OH 45202(513) [email protected]
Attorneys for Defendant-Appellee
Fifth Third Bancorp
(See Next Page for Additional Counsel and Parties)
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 265/512
JOHN P. PASSARELLI
JAMES M. SULENTIC
K UTAK R OCK LLPThe Omaha Building1650 Farnam StreetOmaha, NE 68102(402) [email protected]
Attorneys for Defendant-Appellee First National Bank of Omaha
PETER E. GREENE
BORIS BERSHTEYN
PETER S. JULIANSKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLPFour Times Square
New York, NY 10036(212) 735-3000
JONATHAN S. MASSEY
LEONARD A. GAIL
MASSEY & GAIL, LLP1325 G STREET NWSuite 500Washington, DC 20005(202) 652-4511
Attorneys for Defendants-Appellees JPMorgan Chase & Co., JPMorganChase Bank, N.A., Chase Bank USA,
N.A., Chase Manhattan Bank USA, N.A.,Chase Paymentech Solutions, LLC, BankOne Corporation, Bank One Delaware,
N.A., and JPMorgan Chase Bank, N.A.,as acquirer of certain assets andliabilities of Washington Mutual Bank
†
ALI M. STOEPPELWERTH
WILMER CUTLER PICKERING HALE
AND DORR LLP1875 Pennsylvania Avenue, NWWashington, DC 20006(202) [email protected]
Attorneys for Defendants-Appellees HSBC Finance Corporation and HSBC North America Holdings Inc.
JOHN M. MAJORAS
JOSEPH W. CLARK
JONES DAY51 Louisiana Avenue, NWWashington, DC 20001(202) 879-3939
Attorneys for Defendants-Appellees National City Corporation and National City Bank of Kentucky
(See Last Page of Cover for Additional Counsel and Parties)
† Skadden, Arps, Slate, Meagher & Flom LLP is counsel to the Chase Defendants-Appellees except as toObjectors-Appellants American Express Co., American Express Travel Related Services Company, Inc.,American Express Publishing Corp., Serve Virtual Enterprises, Inc., ANCA 7 LLC d/b/a Vente Privee,USA, AMEX Assurance Company, Accertify, Inc., Wal-Mart, Inc., Alon USA, LP, Amazon.com,Zappos.com, Foot Locker, Inc., and J.C. Penney Corporation, Inc. and related entities.
!"#$% '()*+,' -./01$23% ''(4 5"6$% * '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 266/512
TERESA T. BONDER
VALARIE C. WILLIAMS
K ARA F. K ENNEDY
ALSTON & BIRD LLP
One Atlantic Center 1201 W. Peachtree Street, NWAtlanta, GA 30309(404) [email protected]
Attorneys for Defendants-Appellees
SunTrust Banks, Inc. and SunTrust Bank
R OBERT P. LOBUE
WILLIAM F. CAVANAUGH
PATTERSON BELKNAP WEBB
& TYLER LLP1133 Avenue of the Americas
New York, NY 10036(212) [email protected]
Attorneys for Defendants-Appellees
Wachovia Bank, N.A., Wachovia
Corporation, and Wells Fargo
& Company
JONATHAN B. ORLEANS
ADAM S. MOCCIOLO
PULLMAN & COMLEY, LLC850 Main Street
Bridgeport, CT 06601(203) 330-2000 [email protected]
Attorneys for Defendant-Appellee
Texas Independent Bancshares, Inc.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 267/512
i
CORPORATE DISCLOSURE STATEMENT
Consistent with this Court’s Order of May 27, 2014, see ECF Docket Entry
935 in No. 12-4671(L), the parties to this brief complied with Rule 26.1 of the
Federal Rules of Appellate Procedure by submitting a Compendium of Corporate
Disclosure Statements on June 16, 2014, see Docket Entry 988.
!"#$% '()*+,' -./01$23% ''(4 5"6$% + '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 268/512
ii
TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT .......................................................... i
TABLE OF AUTHORITIES .................................................................................... iv
COUNTERSTATEMENT OF THE ISSUES ............................................................ 1
STATEMENT OF THE CASE .................................................................................. 1
A.
Factual Background .................................................................... 3
B. Commencement And Litigation of Plaintiffs’ Claims ................ 8
C. Settlement .................................................................................. 13
1.
The Settlement’s Terms .................................................. 14
2.
Bases for Approval ......................................................... 17
SUMMARY OF ARGUMENT ............................................................................... 20
ARGUMENT ........................................................................................................... 24
I. JUDGE GLEESON PROPERLY APPROVED THE CLASSSETTLEMENT. .................................................................................. 26
A. The District Court Did Not Abuse Its DiscretionIn Approving The Settlement.................................................... 26
1.
The Settlement Was Procedurally Fair. .......................... 27
2.
The Settlement Was Substantively Fair In Light OfThe Substantial Legal Defenses Plaintiffs Faced. .......... 28
a.
Plaintiffs Faced Substantial Hurdles InProving A Conspiracy And AnticompetitiveRestraints. ............................................................. 31
b. Even If Plaintiffs Could Establish Liability,It Was Doubtful That They Would ObtainTheir Desired Remedies. ...................................... 39
3. The Settlement Was Substantively Fair In Light Of
The Relief Provided To The Class. ................................ 46
!"#$% '()*+,' -./01$23% ''(4 5"6$% , '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 269/512
iii
B. The District Court Did Not Abuse Its Discretion In
Certifying The (b)(2) And (b)(3) Settlement Classes InThis Case, Based On The Specific Facts In This Record. ........ 50
1.
The Non-Opt-Out (b)(2) Class Settlement ProperlyResolved Existing Claims For Injunctive Relief,
Not Those For Existing Monetary Damages. ................. 51
2.
The (b)(2) Class Was Not Improperly Certified ForSettlement Because It Released Claims For FutureLiability Stemming From The Post-SettlementRules. .............................................................................. 56
a.
Dukes Does Not Preclude Certification Of
The 23(b)(2) Settlement Class. ............................ 60
b. Shutts Also Does Not Support TheArgument That The Release RenderedThe (b)(2) Class Improper. ................................... 63
c.
This Court’s Cases Also Do Not Lead ToA Different Outcome. ........................................... 63
II. THE SCOPE OF THE RELEASES PROVIDED BY THE23(b)(2) CLASS IS LAWFUL. ........................................................... 66
A.
The “Identical Factual Predicate” Doctrine PermitsA Broad Release Of Claims. ..................................................... 67
B.
The Releases Here Are Tailored To The “IdenticalFactual Predicate” Doctrine. ..................................................... 68
III. THE COMPETITORS’ OBJECTIONS ARE EQUALLYMERITLESS. ...................................................................................... 72
A.
The Competitors’ Claims, As Competitors, Are NotReleased. ................................................................................... 73
B. Discover’s Group-Boycott Claim Lacks Merit. ........................ 75
CONCLUSION ........................................................................................................ 78
CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OFAPPELLATE PROCEDURE 32(a) .............................................................. 83
CERTIFICATE OF SERVICE ................................................................................ 84
!"#$% '()*+,' -./01$23% ''(4 5"6$% ; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 270/512
iv
TABLE OF AUTHORITIES
Page
CASES
In re Am. Express Merchants’ Litig.,634 F.3d 187 (2d Cir. 2011) ...............................................................................70
In re Am. Int’l Grp., Inc. Sec. Litig.,689 F.3d 229 (2d Cir. 2012) ...................................................................26, 50, 52
Amchem Prods., Inc. v. Windsor ,521 U.S. 591 (1997)......................................................................................49, 65
Armstrong v. Bd. of Sch. Dirs.,616 F.2d 305 (7th Cir. 1980), overruled on other grounds by
Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998) ...............................................72
In re ATM Fee Antitrust Litig.,
554 F. Supp. 2d 1003 (N.D. Cal. 2008)..............................................................34
In re ATM Fee Antitrust Litig ,686 F.3d 741 (9th Cir. 2012), cert. denied sub nom.
Brennan v. Concord, EFS, Inc., 134 S. Ct. 257 (2013) ......................................41
Baby Neal ex rel. Kanter v. Casey,43 F.3d 48 (3d Cir. 1994) ...................................................................................49
Barnes v. Am. Tobacco Co.,161 F.3d 127 (3d Cir. 1998) ...............................................................................53
Bd. of Trade v. United States,246 U.S. 231 (1918)............................................................................................31
Bishop v. Gainer ,272 F.3d 1009 (7th Cir. 2001) ............................................................................55
Blue Cross & Blue Shield United of Wis. v. Marshfield Clinic,65 F.3d 1406 (7th Cir. 1995) ..............................................................................77
Bristol Vill., Inc. v. La.-Pac. Corp.,916 F. Supp. 2d 357 (W.D.N.Y. 2013)...............................................................62
!"#$% '()*+,' -./01$23% ''(4 5"6$% : '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 271/512
v
Buffalo Broad. Co. v. ASCAP ,
744 F.2d 917 (2d Cir. 1984) ...............................................................................38
Charron v. Wiener ,731 F.3d 241 (2d Cir. 2013), cert. denied sub nom.
Suarez v. Charron, 134 S. Ct. 1941 (2014) ........................................................64
City of Detroit v. Grinnell Corp.,495 F.2d 448 (2d Cir. 1974), abrogated on other grounds by
Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) .................28, 31
Cnty. of Suffolk v. Long Island Lighting Co.,907 F.2d 1295 (2d Cir. 1990) .............................................................................25
Cooper v. Fed. Reserve Bank of Richmond ,467 U.S. 867 (1984)...................................................................................... 48-49
D’Amato v. Deutsche Bank ,236 F.3d 78 (2d Cir. 2001) .................................................................................27
Gooch v. Life Investors Ins. Co. of Am.,672 F.3d 402 (6th Cir. 2012) ..............................................................................62
Hansberry v. Lee,311 U.S. 32 (1940)..............................................................................................49
Hecht v. United Collection Bureau, Inc.,691 F.3d 218 (2d Cir. 2012) ...............................................................................64
Huyer v. Wells Fargo & Co.,295 F.R.D. 332 (S.D. Iowa 2013).......................................................................62
Ill. Brick Co. v. Illinois,431 U.S. 720 (1977)..................................................................................... passim
Image Technical Servs., Inc. v. Eastman Kodak Co.,125 F.3d 1195 (9th Cir. 1997) ............................................................................45
Joel A. v. Giuliani,
218 F.3d 132 (2d Cir. 2000) ...................................................................24–25, 75
Johnson v. Meriter Health Servs. Emp. Ret. Plan,702 F.3d 364 (7th Cir. 2012) ..............................................................................62
!"#$% '()*+,' -./01$23% ''(4 5"6$% '7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 272/512
vi
Kansas v. UtiliCorp United, Inc.,
497 U.S. 199 (1990)......................................................................................40–41
Kartell v. Blue Shield of Mass., Inc.,749 F.2d 922 (1st Cir. 1984)...............................................................................33
Kendall v. Visa U.S.A., Inc.,518 F.3d 1042 (9th Cir. 2008) ............................................................................37
La. High Sch. Athletic Ass’n v. St. Augustine High Sch.,396 F.2d 224 (5th Cir. 1968) ..............................................................................55
Lawlor v. Nat’l Screen Serv. Corp.,349 U.S. 322 (1955)......................................................................................70–71
In re Literary Works in Elec. Databases Copyright Litig.,654 F.3d 242 (2d Cir. 2011) ........................................................................ passim
Marisol A. v. Giuliani,126 F.3d 372 (2d Cir. 1997) .........................................................................53, 54
Marcera v. Chinlund ,595 F.2d 1231 (2d Cir.), vacated on other grounds sub nom.
Lombard v. Marcera, 442 U.S. 915 (1979) ........................................................49
Matsushita Elec. Indus. Co. v. Epstein,516 U.S. 367 (1996)............................................................................................48
In re Nassau Cnty. Strip Search Cases,461 F.3d 219 (2d Cir. 2006) ...............................................................................54
Nat’l Bancard, Inc. (NaBanco) v. VISA U.S.A., Inc.,596 F. Supp. 1231 (S.D. Fla. 1984), aff’d ,779 F.2d 592 (11th Cir. 1986) ..................................................................... passim
Nat’l Bancard, Inc. (NaBanco) v. VISA U.S.A., Inc.,779 F.2d 592 (11th Cir. 1986) .................................................................... passim
Norton v. Sam’s Club,
145 F.3d 114 (2d Cir. 1998) ...............................................................................69
Nottingham Partners v. Trans-Lux Corp.,925 F.2d 29 (1st Cir. 1991)...........................................................................57–58
!"#$% '()*+,' -./01$23% ''(4 5"6$% '' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 273/512
vii
N.Y. Cent. R.R. v. White,
243 U.S. 188 (1917)............................................................................................63
Ocean State Physicians Health Plan, Inc. v. Blue Cross &
Blue Shield of R.I., 883 F.2d 1101 (1st Cir. 1989) .............................................77
Ortiz v. Fibreboard Corp.,527 U.S. 815 (1999)............................................................................................65
Parsons v. Ryan,754 F.3d 657 (9th Cir. 2014) ..............................................................................55
Paycom Billing Servs., Inc. v. MasterCard Int’l, Inc.,467 F.3d 283 (2d Cir. 2006) ...............................................................................41
In re Payment Card Interchange Fee & Merchant Disc.
Antitrust Litig., 398 F. Supp. 2d 1356 (J.P.M.L. 2005)........................................9
In re Payment Card Interchange Fee & Merchant Disc.
Antitrust Litig.—Opt Out Cases, No. 1:14-md-1720-JG (E.D.N.Y. July 18, 2014) ...............................................32
Phillips Petroleum Co. v. Shutts,472 U.S. 797 (1985)............................................................................................63
Reyn’s Pasta Bella, LLC v. Visa USA, Inc.,442 F.3d 741 (9th Cir. 2006) ..................................................................13, 71–72
Robertson v. NBA,556 F.2d 682 (2d Cir. 1977) .........................................................................72, 76
Robertson v. NBA,622 F.2d 34 (2d Cir. 1980) ...........................................................................67, 72
Robinson v. Metro-N. Commuter R.R.,267 F.3d 147 (2d Cir. 2001 ), abrogated on other grounds by
Hecht v. United Collection Bureau, Inc.,691 F.3d 218 (2d Cir. 2012) ...................................................................49, 53, 54
San Diego Police Officers’ Ass’n v. San Diego City Emps.’ Ret. Sys.,568 F.3d 725 (9th Cir. 2009) ..............................................................................57
!"#$% '()*+,' -./01$23% ''(4 5"6$% '( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 274/512
viii
SEC v. First Jersey Sec., Inc.,
101 F.3d 1450 (2d Cir. 1996) .............................................................................48
Stephenson v. Dow Chem. Co.,273 F.3d 249 (2d Cir. 2001),aff’d in part by an equally divided Court and vacated in part on other
grounds, 539 U.S. 111 (2003) ............................................................................64
Sullivan v. DB Invs., Inc.,667 F.3d 273 (3d Cir. 2011) (en banc) ...............................................................60
Sykes v. Mel Harris & Assocs., LLC ,285 F.R.D. 279(S.D.N.Y. 2012) .........................................................................62
TBK Partners, Ltd. v. W. Union Corp.,675 F.2d 456 (2d Cir. 1982) .........................................................................59, 69
Tennessean Truckstop, Inc. v. NTS, Inc.,875 F.2d 86 (6th Cir. 1989) ................................................................................33
United States v. Am. Express Co., No. 10-cv-4496-NGG (E.D.N.Y. filed Oct. 4, 2010).........................................11
In re Visa/MasterCard Antitrust Litig.,295 F. Supp. 2d 1379 (J.P.M.L. 2003) .................................................................9
Wal-Mart Stores, Inc. v. Dukes,131 S. Ct. 2541 (2011)................................................................................ passim
Wal-Mart Stores, Inc. v. Visa U.S.A. Inc. (In re Visa Check/Mastermoney
Antitrust Litig.), 280 F.3d 124 (2d Cir. 2001),overruled on other grounds, Miles v. Merrill Lynch & Co. (In re
Initial Pub. Offerings Sec. Litig.), 471 F.3d 24 (2d Cir. 2006) ........13, 24, 63–64
Wal-Mart Stores, Inc. v. Visa U.S.A. Inc.,396 F.3d 96 (2d Cir. 2005) .......................................................................... passim
Weinberger v. Kendrick ,698 F.2d 61 (2d Cir. 1982) .....................................................................26, 29–30
West Virginia v. Chas. Pfizer & Co.,440 F.2d 1079 (2d Cir. 1971) .............................................................................30
!"#$% '()*+,' -./01$23% ''(4 5"6$% '4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 275/512
ix
Williams v. Gen. Elec. Capital Auto Lease, Inc.,
159 F.3d 266 (7th Cir. 1998) ..............................................................................66
STATUTE
15 U.S.C. § 1693o-2.................................................................................................10
R ULE
Fed. R. Civ. P. 23 .............................................................................................. passim
!"#$% '()*+,' -./01$23% ''(4 5"6$% '* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 276/512
1
COUNTERSTATEMENT OF THE ISSUES
Did the District Court abuse its discretion in certifying separate settlement
classes under Rules 23(b)(2) and 23(b)(3) of the Federal Rules of Civil Procedure
and approving as fair, adequate, and reasonable the settlement entered into by
those classes?
STATEMENT OF THE CASE
Nine years ago, various merchants brought federal antitrust claims against
Visa, MasterCard and various member banks (collectively, Defendants)
challenging as anti-competitive the core structures undergirding the Visa and
MasterCard networks. Those networks permit widespread issuance and acceptance
of bank-issued payment cards, which enhances consumer purchasing power and
increases overall demand for merchant goods and services, while practically
eliminating the risk of non-payment for the millions of merchants who accept Visa
and/or MasterCard.
Facing dispositive motions presenting substantial defenses to their claims,
and facing additional uncertainty regarding their ability to obtain the remedies they
sought even if they prevailed on liability, the Class Plaintiffs settled with
Defendants. The settlement resulted from four years of negotiations, in which
Judge Gleeson, Magistrate Judge Orenstein, and two distinguished mediators
played significant hands-on roles.
!"#$% '()*+,' -./01$23% ''(4 5"6$% '9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 277/512
2
The court-approved settlement provides substantial monetary relief—up to
an estimated $7.25 billion (subject to reduction for opt-outs)—to a Rule 23(b)(3)
class that had sought damages for alleged antitrust violations, and going-forward
relief to a Rule 23(b)(2) class. Only the going-forward relief is challenged here.
That relief makes a number of changes to the rules governing the Visa and
MasterCard networks that were sought by plaintiffs. Having agreed to make and
retain these changes to the networks, Defendants asked for, and the Class Plaintiffs
agreed to, “releases cover[ing] claims that are or could have been alleged in this
case,” SPA44, releases that protect Defendants against endless litigation about the
lawfulness of the networks’ rules to which plaintiffs had agreed. The court
explained that “[i]n exchange for a new, going-forward rules structure, the
defendants are entitled to bargain for and receive releases of claims that are or
could have been alleged based on the identical factual predicate of the claims in
this case,” and stated “[t]hat is all these releases accomplish.” SPA45–SPA46.
Given the strength of Defendants’ legal and evidentiary hand, the possibility
that the court would uphold the lawfulness of the networks as they existed at the
time of the settlement was far more than theoretical—a point underscored by the
court-appointed expert. After balancing the substantial monetary and injunctive
relief provided in the settlement against plaintiffs’ likelihood of success in the
litigation, the District Court properly concluded that the settlement was just, fair,
!"#$% '()*+,' -./01$23% ''(4 5"6$% '+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 278/512
3
and reasonable, and approved it. The result of that ruling is peace from further
challenges to the existing rules of the Visa and MasterCard networks, which were
the subject of the litigation, as modified pursuant to settlement. As explained
below, Objectors show no error in the District Court’s approval of the settlement,
much less an abuse of discretion. The judgment should be affirmed.
A. Factual Background
Consumers take for granted that a merchant in the Visa and MasterCard
networks will accept all versions of those cards as payment for the merchant’s
goods or services. It does not matter which bank issues the consumer’s Visa- or
MasterCard-branded card, and it does not matter which particular card issued by
that bank (e.g., cards earning miles, or cards offered to individuals just starting to
build their credit history) the consumer uses. This is so because the Visa and
MasterCard networks have been structured to ensure widespread acceptance,
which benefits consumers and merchants.
Visa’s and MasterCard’s networks are built to complete a complex multi-
party transaction with no friction. As illustrated below, a typical transaction on the
Visa or MasterCard network involves five participants: cardholder, merchant, card
issuer (usually a bank), acquirer (which, again, is usually a bank, and which
contracts with the merchant and pays it promptly following a transaction), and the
payment card network itself. See SPA7
!"#$% '()*+,' -./01$23% ''(4 5"6$% ', '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 279/512
4
McCormack Rep. ¶ 17, fig.4 (lodged with D.E. 2088).
When a consumer swipes a card or enters card information for online
purchases, the merchant collects the payment-card information and sends the
details of the transaction to the merchant’s bank (the “acquiring bank”), which then
forwards that information to the appropriate network. SPA7. The network, in turn,
relays the transaction data to the bank that issued the customer’s card (the “issuing
bank”), which confirms, among other things, that the customer has sufficient credit
(or sufficient funds in the debit card context) to cover the purchase. Id. If all is in
order, the issuing bank so advises the acquiring bank, which transmits that
!"#$% '()*+,' -./01$23% ''(4 5"6$% '; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 280/512
5
confirmation to the merchant and the sale of the merchant’s goods or services is
completed. Id. The entire approval process takes a few seconds.
That instantaneity has made the card system enormously successful with
consumers and merchants alike. Consumers benefit from quick payment times and
the ease of making purchases freed from the limitations of available cash-on-hand.
See, e.g., K. Murphy Rep. ¶¶ 254, 113 (lodged with D.E.2088). Merchants benefit
from a consuming public with ready access to funds, promoting larger purchasing
volume—volume which might shrink if customers had to endure a substantial wait
for transactions to clear. See, e.g., id. ¶¶ 80–86, 113 & n.126, 255, 273–293;
D.E.1550 ¶¶ 186–187. The card system also enables on-line purchases, where use
of cash or checks is not possible. K. Murphy Rep. ¶ 254.
Merchants not only reap enhanced sales volume through the payment card
networks, they also receive payment without having to wait for cardholders to pay
their bills to banks, and without incurring risk of payment default if cardholders
fail to do so. That is because after each consumer transaction, the merchant’s
acquiring bank promptly pays the merchant, pursuant to an agreement between the
merchant and the acquiring bank.1
Typically, the acquirer deducts a fee, known as
the “merchant discount fee,” from the face amount of the transactions as payment
for its services and expenses. SPA7–SPA8.
1The acquiring market is highly competitive and contractual agreements between
merchants and acquirers vary widely.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ': '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 281/512
6
In connection with the acquiring bank’s payment to the merchant, the
acquiring bank also receives a payment from the issuing bank (via the Visa or
MasterCard network) with respect to the transaction. SPA7; D.E.1478-4 ¶ 11.
That leaves the issuing bank with the right to demand payment from the consumer.
T. Murphy Decl. ¶ 11 (lodged with D.E.2088). That right comes with a delay in
receiving any payment and a risk of default by the consumer. D.E.1550 ¶ 168.
Generally, the issuing bank cannot return to the acquiring bank and demand
compensation if the cardholder fails to pay, nor may the acquiring bank turn to the
merchant. Indeed, the issuing bank must pledge to pay for charges incurred on its
cards as a condition of joining the Visa or MasterCard network. D.E.1478-4 ¶ 12.
Just as the acquiring bank deducts a fee from its payment to the merchant,
each issuing bank deducts a fee from its payment to the acquiring bank (i.e., the
issuer pays the acquiring bank less than the full price the merchant charged the
consumer). That fee is known as the interchange fee, SPA7, and addresses, among
other things, the cost of services an issuer performs and risks it assumes. See
D.E.1478-4 ¶ 12; D.E.1550 ¶ 157. Any particular acquiring bank and particular
issuing bank are free to reach separately negotiated agreements governing
compensation, whether generally or with respect to a particular merchant client of
the acquiring bank. See SPA7–SPA10; SPA16; D.E.1550 ¶¶ 181–187. To
promote efficiency, however, each network sets a schedule establishing the
!"#$% '()*+,' -./01$23% ''(4 5"6$% (7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 282/512
7
“default” interchange fees that will govern transactions processed over the network
in the absence of a separately negotiated agreement between the acquiring and
issuing banks. SPA7–SPA10; SPA16; D.E.1550 ¶¶ 181–187.
Default interchange rules enable the networks to operate seamlessly by
eliminating the need for each of thousands of issuers and acquirers to negotiate
appropriate interchange fees for every possible combination of merchant,
transaction value, and specific card product (e.g., Chase Freedom, Chase Sapphire
Preferred, Chase Slate, and so on). D.E.1550 ¶ 181; SPA29–SPA30. Such
individualized negotiations would entail substantial transaction costs and would
likely inhibit merchants’ ability to accept all versions of the Visa- and MasterCard-
branded cards. Moreover, by providing a default interchange fee, a network
prevents the possibility of negotiation impasse or “hold-up”— e.g., a particular
issuer that declines to accept transactions forwarded by an acquiring bank from a
particular merchant absent receipt of a much higher fee.
Other network rules also ensure the widespread acceptance of cards. For
example, the “Honor-all-Cards” rule “require[s] merchants to accept all the
network’s credit cards . . . when proffered for payment, regardless of which bank
issued the card.” SPA19. This rule ensures that the Visa network, for instance,
functions as a Visa network. Customers can purchase secure in the knowledge that
their particular Visa card will be accepted wherever any Visa card is welcome.
!"#$% '()*+,' -./01$23% ''(4 5"6$% (' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 283/512
8
SPA31–SPA32. The rule also assures issuers that all cards carrying a particular
network’s mark will be accepted on an equal basis. Honor-all-Cards thus parallels
the rule requiring issuing banks to accept payment obligations passed to them from
merchants through the acquiring bank. Just as an issuing bank must honor all
payment obligations for cardholder purchases made over a network, so, too, must a
merchant honor all network-branded cards presented to it. D.E.1478-4 ¶ 12; see
D.E.5965 at 14–15 (report of court-appointed expert Dr. Sykes). As the District
Court found, the Honor-all-Cards and default interchange rules are “closely
interrelated,” “lay at the heart of Visa’s and MasterCard’s efforts to build the
successful networks they now have,” and “undeniably have significant
procompetitive effects.” SPA16; SPA31.
Finally, as yet another means of assuring uniform acceptance and a reliable
customer experience, Visa and MasterCard each have maintained a “no-surcharge”
rule. See SPA9; SPA18; D.E.1478-4 ¶¶ 26–27, 30–31. Absent restrictions on
surcharging, for example, an “Honor-all-Cards” rule could be undermined, as a
given merchant could impose an exorbitant surcharge on a given card, rather than
refusing it outright. K. Murphy Rep. ¶ 134; see id. ¶¶ 130–134.
B. Commencement And Litigation of Plaintiffs’ Claims
No American court has ever found these practices anticompetitive. SPA30.
In fact, a previous challenge to interchange was tried before a federal district judge
!"#$% '()*+,' -./01$23% ''(4 5"6$% (( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 284/512
9
and rejected, and the Eleventh Circuit affirmed the judgment. See Nat’l Bancard,
Corp. (NaBanco) v. VISA U.S.A., Inc., 596 F. Supp. 1231 (S.D. Fla. 1984), aff’d ,
779 F.2d 592 (11th Cir. 1986). Nevertheless, merchants and affiliated trade
organizations sued to challenge Visa’s and MasterCard’s interchange-related rules
and structures. The actions relevant to this appeal were filed beginning in June
2005 and later amended after consolidation before Judge Gleeson. SPA18.2
From
the outset, plaintiffs sought to present their antitrust claims via two discrete classes:
a Rule 23(b)(3) class “seek[ing] damages only,” and a Rule 23(b)(2) class
“seek[ing] declaratory and injunctive relief only.” D.E.317 ¶ 97(a)–(b)
(complaint). Both putative classes asserted that Defendants conspired to fix
interchange fees. SPA6. Plaintiffs’ allegations focused on the three sets of
network rules discussed above: (i) default interchange, (ii) Honor-all-Cards, and
(iii) no-surcharge and other alleged “anti-steering” rules. See SPA8–SPA9;
SPA18–SPA19. The putative (b)(3) class sought damages to compensate
2The Judicial Panel on Multidistrict Litigation assigned these actions to Judge
Gleeson. In re Payment Card Interchange Fee & Merchant Discount Antitrust
Litig., 398 F. Supp. 2d 1356, 1358 (J.P.M.L. 2005) (MDL-1720). They followedyears of class and opt-out litigation before Judge Gleeson by retailers concerningthe networks’ “Honor-all-Cards” rules, particularly as applied to acceptance ofdebit cards, and default interchange rules. See id. (discussing Judge Gleeson’s“familiar[ity] with the operation of the credit card networks”); In re
Visa/MasterCard Antitrust Litig., 295 F. Supp. 2d 1379, 1380–81 (J.P.M.L. 2003)(assigning MDL-1575 to Judge Gleeson who “has become thoroughly familiarwith the allegations . . . as a result of his seven year involvement with the NewYork class action litigation”).
!"#$% '()*+,' -./01$23% ''(4 5"6$% (4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 285/512
10
merchants for allegedly inflated default interchange rates in the past, and the
putative (b)(2) class sought injunctive relief to revise the Visa and MasterCard
networks going forward.
During the pendency of these actions, there were significant changes to
Visa’s and MasterCard’s corporate structures and businesses. See SPA10; SPA17–
SPA19. First, MasterCard and Visa completed IPOs in 2006 and 2008,
respectively, which fundamentally changed their organizational structures. At the
time of the initial complaints, Visa and MasterCard were bankcard associations
comprised of member banks, which plaintiffs claimed were therefore “structural
conspiracies.” SPA19; D.E.317 ¶¶ 131–135. Through its IPO, each network
became a standalone “publicly traded compan[y] with no bank governance.”
SPA10. Unable to rely on their former “structural conspiracy” allegations,
Plaintiffs filed amended complaints in January 2009 insisting that the networks still
functioned as conspiracies among the banks and Visa or MasterCard.3
Second, the Durbin Amendment in the Dodd-Frank legislation, see 15
U.S.C. § 1693o-2(b)(3)(A)(i), modified the networks’ “no minimum purchase”
rules and discounting rules to allow merchants greater ability to steer consumers
away from using credit cards. SPA10 & n.6; SPA17.
3See D.E.1170-4 ¶¶ 10, 147–162; D.E.1170-2 ¶¶ 8, 135–150; D.E.1170-3 ¶¶ 261–
270, 429–442, 444.
!"#$% '()*+,' -./01$23% ''(4 5"6$% (* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 286/512
11
Third, through consent decrees entered in 2011 to resolve targeted antitrust
suits brought by the U.S. Department of Justice (DOJ), Visa and MasterCard
agreed to modify various rules. See SPA 10, SPA17.4
Visa’s and MasterCard’s
modifications of their “no discounting” and “non-discrimination” rules broadened
merchants’ discretion to offer discounts and other incentives for a range of
alternative types of payment, including for using other credit card brands or debit
cards, and to encourage customers to use other forms of payment. See SPA10.
Alongside these developments, the parties vigorously litigated this case.
They disputed, inter alia, whether the default interchange, Honor-all-Cards, and
no-surcharge rules were necessary to produce the procompetitive efficiencies that
each network indisputably generated. Eventually, Dr. Alan O. Sykes of the New
York University School of Law—whom Judge Gleeson appointed pursuant to
Federal Rule of Evidence 706 to advise the court on economic issues—concluded
that “plaintiffs face a substantial probability of failure in efforts to establish that the
core practices that would remain in place after the proposed settlement violate the
antitrust laws.” D.E.5965 at 22–23. The parties further disputed whether there
was no antitrust conspiracy as a matter of law post-IPOs.
4The government also brought suit against American Express. See United States
v. Am. Express Co., 10-cv-4496-NGG (E.D.N.Y. filed Oct. 4, 2010). Closingarguments in a bench trial were held on October 9, 2014.
!"#$% '()*+,' -./01$23% ''(4 5"6$% (9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 287/512
12
The parties also engaged in wide-ranging expert discovery, and the experts
sparred over what the “but-for” world would have looked like without the
challenged practices, including absent any default interchange fee. As Dr. Sykes
later observed: “To the best of my knowledge, no general purpose (non-debit) card
network of any consequence has ever operated without significant interchange fees
(or substantial merchant fees in a three-party network).” D.E.5965 at 19.
Plaintiffs’ experts argued that the MasterCard and Visa networks could “survive”
with zero interchange and hypothesized a “but-for” world designed to produce
such a result. In that imagined (and improbable) world, issuers would be required ,
by the networks’ rules, to accept all merchant transactions from acquirers and
required to pay acquirers the full amount of the merchant transaction without
receiving any compensation from acquiring banks or their merchants, not even for
the very real risk of non-payment by the consumer. But, as Professor Sykes later
advised the District Court, “survival” is not an antitrust standard, and plaintiffs’
experts failed to show that a “zero interchange” competitive equilibrium would
ever realistically emerge, even with hypothesized changes in the networks’ rules.
See id. at 18, 21–24.
By 2011, many issues were fully briefed and awaiting rulings, including
cross-motions for summary judgment, Defendants’ motions challenging the
admissibility of plaintiffs’ experts’ opinions, and Defendants’ opposition to
!"#$% '()*+,' -./01$23% ''(4 5"6$% (+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 288/512
13
plaintiffs’ motion for class certification. See, e.g., SPA10. Judge Gleeson held
these motions in abeyance pending the outcome of the parties’ settlement
discussions. SPA11 & n.9.
C. Settlement
Even as they were aggressively litigating, starting in 2008 the parties made
efforts—assisted by mediators, Magistrate Judge Orenstein and Judge Gleeson—to
settle their disputes. See SPA11–SPA12. Settlement efforts intensified in late
2011. Id. The parties sought a final resolution of their ongoing disputes regarding
the legitimacy of the networks’ respective interchange fee rules and other
challenged rules. After all, Visa and MasterCard had earlier settled the class action
in In re Visa Check/MasterMoney Antitrust Litigation, which had likewise
challenged, inter alia, “Honor-all-Cards” and default interchange, only to find
themselves embroiled in a new class action making the same claims almost
immediately thereafter.5
Defendants had no desire to continue litigating these
same issues about rules that Visa and MasterCard each perceived as central to their
5See, e.g., Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)
(“Wal-Mart II ”) (class settlement); Wal-Mart Stores v. Visa U.S.A. Inc. (In re Visa
Check/Mastermoney Antitrust Litig.), 280 F.3d 124 (2d Cir. 2001) (“Wal-Mart I ”)
(class certification), overruled on other grounds, Miles v. Merrill Lynch & Co. (Inre Initial Pub. Offerings Sec. Litig.), 471 F.3d 24 (2d Cir. 2006); Reyn’s Pasta
Bella, LLC v. Visa USA, Inc., 442 F.3d 741 (9th Cir. 2006) (effect of Wal-Mart II
settlement and release).
!"#$% '()*+,' -./01$23% ''(4 5"6$% (, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 289/512
14
operations. And plaintiffs viewed settlement as an opportunity to obtain otherwise
uncertain relief and change the complexion of network rules. See SPA11.
Despite the difficult and contentious issues involved and the evolving
litigation landscape, the parties reached a settlement in summer 2012. SPA12.
Judge Gleeson granted preliminary approval in November 2012 and provisionally
certified separate settlement classes for each of the two putative classes asserted by
Plaintiffs: one under Rule 23(b)(2) (asserting claims for injunctive relief) and one
under Rule 23(b)(3) (asserting claims for damages). After exhaustive approval-
related proceedings, Judge Gleeson granted final approval to the settlement in
December 2013.
1. The Settlement’s Terms
In the settlement with the (b)(3) class, Defendants agreed to make monetary
payments to class members valued at up to approximately $7.25 billion (before
reductions for opt-outs), primarily for releasing their claims for monetary damages
that had accrued up to the date of preliminary approval. SPA13. This fund
represents “the largest-ever cash settlement in an antitrust class action.” SPA35.
The (b)(3) class permits opt-outs because it sought only damages for past conduct.
In the settlement with the (b)(2) class, Defendants agreed to a package of
relief that modified the networks’ respective rules prospectively from the date of
preliminary approval and ensured the continuity of certain changes that occurred
!"#$% '()*+,' -./01$23% ''(4 5"6$% (; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 290/512
15
during this litigation. The (b)(2) class settlement makes material rules
modifications sought by plaintiffs, including significant changes to the alleged
“anti-steering” rules. This going-forward relief was provided in connection with a
non-opt out (b)(2) class because it involves uniform, across-the-board prescriptions
for each network’s operation; the network rules themselves have always been and
must be consistent with respect to all merchants. For that reason as well, the (b)(2)
class was defined to include both existing and future merchants. SPA118 ¶ 2(b).
First , Visa and MasterCard agreed to allow merchants to surcharge on Visa-
or MasterCard-branded credit card transactions at the brand level (i.e., all Visa or
all MasterCard transactions) and product level (e.g., all “Visa Signature”
transactions). SPA13. Merchants thus won the ability to pass their card
acceptance costs on directly to their customers.
Second , the settlement “lock[s]-in” the Durbin Amendment’s minimum-
purchase and discounting provisions and those in the consent decree with the DOJ.
Id. Defendants agreed to continue to abide by those requirements, regardless of
legislative, judicial, or other developments that would otherwise dissolve them.
See id.
Third , the settlement makes clear that merchants who operate different
businesses under different “banners” or “trade names” can accept Visa- and
MasterCard-branded cards at some of those businesses but not others. Id.
!"#$% '()*+,' -./01$23% ''(4 5"6$% (: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 291/512
16
Fourth, the settlement obligates Visa and MasterCard to negotiate in good
faith with groups of merchants that wish to negotiate with the networks
collectively rather than one-on-one. Id.
The District Court concluded that the settlement
preserves the integrity of the rules that made (and continue tomake) the networks successful. At the same time, by furtherrelaxing merchant restraints regarding pricing, it provides fortransparency and competition at the point of sale. Merchantswho choose to use the power the proposed rules changes give
them will be able to exercise control over (and perhaps reduce)their costs from accepting Visa and MasterCard credit cards.
SPA32.
In exchange for the agreement to modify or eliminate these existing
practices, the (b)(2) class agreed to permit on a going-forward basis certain other
conduct that had been the subject of the claims for injunctive relief. SPA118
¶ 2(b). Additionally, the (b)(3) and (b)(2) classes agreed to release “claims that are
or could have been alleged in this case.” SPA44; see SPA134–SPA136 ¶ 33
((b)(3) class release); SPA169–172 ¶ 68 ((b)(2) release). As the District Court
explained, “[i]n exchange for a new, going-forward rules structure,” Defendants
“bargain[ed] for and receive[d] releases of claims that are or could have been
alleged based on the [‘]identical factual predicate[’] of the claims in this case.”
SPA45–SPA46. The provisions “do not release the defendants from liability for
claims based on new rules or new conduct or a reversion to the pre-settlement
!"#$% '()*+,' -./01$23% ''(4 5"6$% 47 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 292/512
17
rules.” SPA46. Similarly, while Defendants must adhere to the agreed-upon rules
modifications until 2021, see, e.g., SPA84 & SPA87 ¶ 13(a)–(b) & (k)–(m);
SPA151 ¶ 45; SPA164 ¶ 58, if they enact rules that are not “substantially similar”
to those agreed-upon provisions, the releases would not apply to those provisions,
see SPA82 ¶ 12(c)(vii), SPA88 ¶ 16(b)(vii).6
2. Bases for Approval
“Only .05%” of the “approximately 12 million merchants compri[sing] the
class” objected to the settlement. SPA23. As the District Court observed, 90% of
the objections were submitted on boilerplate forms downloaded from websites that
“disseminated false and misleading information for the precise purpose of
drumming up objections and opt-outs.” Id. A number of legitimate objectors,
however, argued that the settlement was procedurally and substantively
unreasonable. SPA13-SPA14; see SPA34–SPA47 (discussing objections).
After extensive approval-related proceedings, see SPA14, SPA7, Judge
Gleeson issued a lengthy opinion approving the settlement. SPA1–SPA55. The
court found that the settlement “secures both a significant damage award and
meaningful injunctive relief for a class of merchants that would face a substantial
likelihood of securing no relief at all if this case were to proceed.” SPA15; accord
6Compare Merchant Appellants’ (hereinafter “Merchants”) Br. 8 (alleging that the
settlement “prevents merchants . . . from challenging anticompetitive conduct forever ”).
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 293/512
18
D.E.5965 at 3 (Sykes). The court highlighted three significant sources of risk with
respect to liability and to the relief plaintiffs requested. SPA15–SPA16; SPA25–
SPA32.
First , Judge Gleeson concluded that the networks’ IPOs would undermine
plaintiffs’ ability to prove “part of the ‘core conduct’ [they] sought to address,”
namely that “‘Visa and MasterCard member banks [. . .] effectively control the
decisions of both Networks’ by setting rules and interchange fees for the networks
to serve their collective interest.” SPA28 (quoting complaint) (second alteration in
original). The networks’ restructurings, the court explained, brought them “out
from under the control of their member banks,” which “strengthened the
defendants’ argument” that the setting of interchange fees was a unilateral network
activity, not the result of some structural or “walking” conspiracy. Id.
Second , the court was skeptical that plaintiffs could prove the unlawfulness
of the networks’ rules and practices—particularly default interchange and the
Honor-all-Cards rule. SPA16; SPA28–SPA32. Default interchange, Judge
Gleeson concluded, “played an essential role in the construction of the networks at
issue here, and those networks provide substantial benefit to both merchants and
consumers.” SPA30. Without default interchange, network participants would
need to execute countless bilateral agreements regarding unique interchange rates,
which would inflate costs and impair the now seamless system. See SPA29–
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 294/512
19
SPA30; D.E.1550 ¶ 181. As the District Court noted, courts, economists and
practitioners have agreed that “the Honor-all-Cards rule and similar rules [are]
procompetitive under the Rule of Reason.” SPA31. Quoting the public remarks of
Objectors’ lead counsel below, the District Court explained that such rules
represent:
“a classic example of a restraint that was actuallynecessary for the functioning of the joint venture. . . .We all take it for granted, but you needed to have a rule
that ensured to you, as a consumer, that when you profferthe Visa card, the merchant is going to take it. It’s notgoing to say, ‘I’ll take a Chase Visa card, but I don’t likeCitibank, so I’m going to turn that one down.’”
SPA32 (quoting Panel Discussion II: Consumer Issues at 5–6 (Statement of Jeffrey
Shinder) (Fordham Univ. Sch. of Law 2008) (reproduced at D.E.5939-3)).
Those procompetitive effects, together with “DOJ’s recent decision not to
challenge the default interchange rules despite the entreaties by Class Counsel that
it do so . . . further sugges[t] that the plaintiffs’ antitrust challenge to the rules
could easily fail.” SPA30.
Third , even if plaintiffs were able to establish an unlawful agreement with
predominantly anticompetitive effects, the court concluded that plaintiffs faced
significant risks as to the relief they sought. For instance, the District Court
recognized that there was a compelling argument that Illinois Brick Co. v. Illinois,
431 U.S. 720 (1977), barred the (b)(3) class’s ability to recover damages and
!"#$% '()*+,' -./01$23% ''(4 5"6$% 44 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 295/512
20
would foreclose any future claims for monetary relief related to the interchange
system. See SPA27–SPA28 & n.15.
Additionally, even if Illinois Brick did not extinguish damages entirely, the
court doubted that plaintiffs could fully overcome the “problems and complexities
inherent in proving damages to the jury,” SPA32, particularly because—as the
court-appointed expert concluded—plaintiffs lacked a model demonstrating what
the payment card market would look like in the absence of the challenged rules.
SPA33.
Furthermore, the court recognized that plaintiffs faced additional hurdles as
to the injunctive relief they pursued. It explained that many of plaintiffs’
requests—such as judicial regulation of interchange fees—were simply outside the
power of the federal judiciary. SPA14; SPA17.
After weighing all of the foregoing, the District Court approved the
settlement on December 13, 2013, and Objectors timely appealed.
SUMMARY OF ARGUMENT
The District Court acted well within its discretion in certifying two
settlement classes, one pursuant to Rule 23(b)(2) and one pursuant to Rule
23(b)(3), and in approving the settlement. Appellants challenge the judgment on
essentially two fronts. They assert that the (b)(2) class obtained relief that was
inadequate in light of the purported strength of the Class’s claims, and that Judge
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 296/512
21
Gleeson violated Rule 23 and absent class members’ due process rights by
approving both the non-opt-out (b)(2) settlement class and the release provided by
that class settlement. In addition, several of the networks’ competitors raise a
series of narrow objections. None of these arguments has merit or demonstrates an
abuse of discretion.
I. A class-action settlement must be fair, adequate, reasonable, and not the
product of collusion between the parties. Here, an irreproachable settlement
process yielded a settlement that was fair, adequate, and reasonable, in all respects.
Both settlement classes received substantial relief. The Rule 23(b)(3) class
obtained monetary relief valued at more than $7 billion (before reductions for opt-
outs), the sufficiency of which Objectors do not challenge here. The modifications
to the networks’ rules secured by the (b)(2) class were likewise more than
adequate, especially in light of the serious litigation risks confronting plaintiffs.
Those risks were daunting. Any hope of the (b)(2) class to obtain going-
forward relief was clouded by the IPOs, which eliminated the argument that the
networks were structural conspiracies, left the banks with no control over the
networks’ policies at issue, and undercut plaintiffs’ ability to demonstrate the
threshold antitrust requirement of an “agreement.” Moreover, as the District Court
recognized, the challenged network rules have significant procompetitive features,
and thus the class faced substantial obstacles in showing that they were unlawful.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 49 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 297/512
22
Default interchange streamlines card acceptance and eliminates the need for
separate, bilateral negotiations over the interchange fee schedule. Honor-all-Cards
is an indispensable element of the seamless payment experience that has driven the
expansion of cardholding, card usage, and merchant sales. Plaintiffs had not
shown that a credit-card system could survive, much less flourish, without the
challenged network rules. Yet, such a showing was essential to establishing that
the challenged rules were unlawful restraints.
Plus, if plaintiffs somehow prevailed on liability, they faced an equally
onerous task at the remedies phase. Because merchants do not directly pay
interchange fees—acquiring banks do—plaintiffs faced the significant risk that
Illinois Brick bars any past or future damages claims. And, if damages were not
entirely precluded, plaintiffs still faced a grave risk, as the District Court and the
court-appointed expert observed, that they would not recover substantial sums,
because plaintiffs’ damages model rested on an implausible “but-for” world. As to
injunctive relief, the District Court explained that plaintiffs’ demand for a
wholesale reshaping of the payment card networks was more than a federal court
could provide, especially given changes to the networks that occurred during the
litigation. Given the many weaknesses in plaintiffs’ case, the relief afforded was
more than fair.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 298/512
23
The District Court also did not abuse its discretion in certifying a mandatory,
non-opt-out (b)(2) settlement class here. Contrary to Objectors’ contentions, the
proper focus of the certification inquiry is on the claims presented and pursued by
the class, not on the relief ultimately obtained or the issues compromised by the
class in exchange for that relief. Here, a putative (b)(2) class had been, since the
filing of the first class complaint, challenging the lawfulness of core network rules.
Those rules applied to the class on the whole.
As a consequence, it was entirely proper under both Rule 23 and the Due
Process Clause that the (b)(2) settlement class agreed to release its ability to
challenge—whether in a damages action or one for injunctive relief—the
lawfulness of the post-settlement network rules. Such concessions must be within
the power of a (b)(2) settlement class, otherwise defendants could not enter
meaningful Rule 23(b)(2) settlements. Without such a release, whatever remedies
Defendants agreed to, and whatever changes they agreed to adopt, would be
subject to a new round of legal challenges by the same group of plaintiffs the
moment the settlement was approved. “Settlements” would settle nothing. There
is no reason to treat cases involving a non-opt-out settlement class as immune from
a negotiated conclusion.
II. The releases here were proper because they simply reflect the boundaries
of the “identical factual predicate” doctrine. The releases do nothing more than
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 299/512
24
release the claims that were, or could have been, asserted on the factual predicate
underlying this action. That is what the settlement agreement says, what counsel
represented to the District Court, and the basis of the court’s approval decision. Of
course, as Judge Gleeson recognized, there may be cases in which it is not
immediately clear whether particular claims fall within or without the scope of
these releases. But future courts can examine the actual claims raised and facts
alleged in such future cases to determine whether the release bars them.
III. Finally, the claims raised by competitors American Express, First Data,
and Discover are unavailing. Their principal concern—that the settlement releases
claims they may hold in their capacities as competitors to Visa and MasterCard —
is belied by the text and context of the agreement. Discover also asserts that the
settlement enshrines an unlawful group boycott against it as a competing network,
but that novel claim cannot meet the standard for showing that a settlement violates
the antitrust laws.
ARGUMENT
This Court reviews the approval of a class settlement—including the
decision to certify the settlement classes—for abuse of discretion. Wal-Mart I , 280
F.3d at 132; Joel A. v. Giuliani, 218 F.3d 132, 139 (2d Cir. 2000). “The trial
judge’s views are accorded ‘great weight . . . because he is exposed to the litigants,
and their strategies, positions and proofs. . . . Simply stated, he is on the firing line
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 300/512
25
and can evaluate the action accordingly.’” Joel A., 218 F.3d at 139 (alterations in
original) (quoting City of Detroit v. Grinnell Corp., 495 F.2d 448, 454 (2d Cir.
1974)); accord Wal-Mart II , 396 F.3d at 117; Cnty. of Suffolk v. Long Island
Lighting Co., 907 F.2d 1295, 1323 (2d Cir. 1990). Moreover, “[this] considerable
deference . . . is heightened where the trial judge’s experience has imparted to the
judge a particularly high degree of knowledge.” Joel A., 218 F.3d at 139.
This case is the archetype for applying “heightened” deference. Judge
Gleeson has spent 16 years on the interchange “firing line”—eight during this
litigation and another eight courtesy of earlier actions between various merchant-
plaintiffs and the network defendants. See supra at 9 n.2, 13–14 & n.5.
Regardless of the degree of deference, however, the result here would be the
same. A painstaking, arms-length settlement process negotiated while the parties
vigorously litigated the fundamental issues raised by plaintiffs’ claims produced a
deal that provides meaningful backward- and forward-looking relief for plaintiffs
and is a fair compromise in all respects. Despite Objectors’ mountain of briefing,
they fail to raise any serious question regarding Judge Gleeson’s evaluation of the
propriety of the settlement classes or the procedural or substantive fairness of the
settlement. The judgment should be affirmed.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 4: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 301/512
26
I. JUDGE GLEESON PROPERLY APPROVED THE CLASS
SETTLEMENT.
Before a court may approve any class settlement, it must determine (1) that
the settlement is fair, adequate, reasonable, and not a product of collusion, per Rule
23(e); and (2) that the requirements of Rule 23(a) and (b) have been met. In re Am.
Int’l Grp., Inc. Sec. Litig., 689 F.3d 229, 239 & n.8 (2d Cir. 2012) (“ AIG”). These
requirements were satisfied here.
A. The District Court Did Not Abuse Its Discretion In ApprovingThe Settlement.
“The central question raised by the proposed settlement of a class action is
whether the compromise is fair, reasonable and adequate.” Weinberger v.
Kendrick , 698 F.2d 61, 73 (2d Cir. 1982). That inquiry requires evaluating “both
the settlement’s terms and the negotiating process leading to settlement.” Wal-
Mart II , 396 F.3d at 116. “A ‘presumption of fairness, adequacy, and
reasonableness may attach to a class settlement reached in arm’s-length
negotiations between experienced, capable counsel after meaningful discovery.’”
Id.
The settlement process here was unimpeachable. As such, the agreement is
presumptively valid. But even absent that deference, the record confirms that the
settlement was more than appropriate in every respect, and the judgment should
therefore be affirmed.
!"#$% '()*+,' -./01$23% ''(4 5"6$% *7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 302/512
27
1. The Settlement Was Procedurally Fair.
The parties were represented by a host of “experienced and able” class-
action counsel, SPA21, who “litigated the case full-throttle” even during the
pendency of settlement talks, SPA11. Discovery was not merely “‘meaningful,’”
Wal-Mart II , 396 F.3d at 116, but exhaustive and completed before settlement.
The parties produced tens of millions of documents and took hundreds of fact and
expert depositions. Summary judgment motions were awaiting decision and all
litigants were well-positioned to appreciate the strengths and weaknesses of their
(and their opponents’) positions. SPA10–SPA11; SPA16. The District Court
found that the parties’ talks were “fair and conducted at arm’s length” and rejected
Objectors’ suggestion that there was an “indicat[ion of] collusion.” SPA21.
Moreover, four third-party neutrals facilitated negotiations—two highly respected
outside mediators (former U.S. Magistrate Judge Edward Infante and Professor
Eric Green) and, in the later stages, Magistrate Judge Orenstein and Judge Gleeson.
See id.; SPA11 & n.9; see also D’Amato v. Deutsche Bank , 236 F.3d 78, 85 (2d
Cir. 2001) (“[A] court-appointed mediator’s involvement in pre-certification
settlement negotiations helps to ensure that the proceedings were free of collusion
and undue pressure.”).
!"#$% '()*+,' -./01$23% ''(4 5"6$% *' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 303/512
28
Because the process was fair and collusion-free, the resulting agreement is
presumed to be fair, adequate, and reasonable. Wal-Mart II , 396 F.3d at 116.
Nothing in the record or the briefing on appeal upsets that presumption.
2. The Settlement Was Substantively Fair In Light Of The
Substantial Legal Defenses Plaintiffs Faced.
While Defendants agree with and therefore join the Class Plaintiffs’
substantive-fairness arguments, see Class Br. § II, we write to underscore the
reasonableness of the settlement’s terms in light of the significant litigation risks
the Classes would have faced if (as Objectors wish) they had spurned settlement.
See Grinnell , 495 F.2d at 463 (requiring court to consider litigation risk, among
other factors, in evaluating the fairness of a settlement); SPA20.
Everyone but Objectors recognizes that the Class Plaintiffs’ position at the
moment of settlement was precarious. The viability of their core challenges to
default interchange and Honor-all-Cards—already highly doubtful under the Rule
of Reason, even for the period that the networks remained nonpublic bankcard
associations—had further weakened after the Visa and MasterCard IPOs. And
even assuming, arguendo, some antitrust violation could be shown, the merchants
had little chance of securing the relief they sought. Between Illinois Brick , a
serious Daubert challenge to their principal expert on antitrust injury, the lack of a
plausible vision for a functional payment-card market without the challenged rules,
and difficulties in persuading a jury to award billions in damages here, plaintiffs
!"#$% '()*+,' -./01$23% ''(4 5"6$% *( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 304/512
29
stood little chance of securing a substantial award. Plaintiffs also were unlikely to
obtain the “sweeping” injunctive relief they had demanded—including, among
other things, invalidation of Honor-all-Cards and the resetting of default
interchange to some indeterminate level between zero and its current levels—due
to the inherent limitations on the federal courts’ power to regulate the marketplace.
See SPA14; SPA17.
Plaintiffs faced serious odds of complete failure, and counsel who actively
litigate are in the best position to understand the risks. On appeal, however,
Objectors ignore those risks. The lead brief—the Merchants’ Brief—barely
addresses litigation risk. It first mentions the case’s merits on page 78, but fails to
address the procompetitive effects of the challenged rules, the IPOs, or plaintiffs’
risks at the remedies phase. Compare SPA20–SPA36. The Merchant Trade
Groups pay marginally more attention to the merits, see Br. § II, but never
reconcile their optimism about the likelihood of success with Judge Gleeson’s
findings or the record. See id. at 50 (asserting, without analysis, that the plaintiffs’
“‘best possible recovery’” was total elimination of Honor-all-Cards, default
interchange, and the no-surcharge rules) (quoting Grinnell , 495 F.2d 463). To the
extent Objectors are suggesting that a court reviewing a settlement should ignore
the substantial weaknesses in plaintiffs’ claims—that a settlement should be
!"#$% '()*+,' -./01$23% ''(4 5"6$% *4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 305/512
30
viewed as if plaintiffs were highly likely to prevail in full—they are wrong as a
matter of law. See Weinberger , 698 F.2d at 73–74.
Objectors also erroneously suggest that the District Court had to fully
adjudicate plaintiffs’ claims, faulting Judge Gleeson for (among other things) not
resolving whether the networks possess market power. See, e.g., Merchant Trade
Groups’ Br. 38 (charging that the District Court “skipp[ed] the first two parts in the
antitrust analysis”); id. at 39–41, 46. In fact, “[t]he district court [need] not
determine the validity of the [plaintiffs’] claim . . . . The very purpose of a
compromise is to avoid the determination of sharply contested and dubious issues
. . . . ” West Virginia v. Chas. Pfizer & Co., 440 F.2d 1079, 1086 (2d Cir. 1971)
(citing In re Prudence Co., 98 F.2d 559, 560 (2d Cir. 1938)); id. at 1085. As a
consequence, it is unremarkable that the District Court devoted its risk assessment
to the points discussed below and did not dwell on market power (though, it made
clear that it was aware of the issue, SPA26 n.14).
The District Court conducted the requisite realistic assessment of the
prospects of further litigation. See SPA14–SPA19; SPA25–SPA36. Having done
so, it fully understood the obstacles facing plaintiffs, including plaintiffs’ inability
to: (a) prove an unlawful agreement causing anticompetitive harms, and (b) obtain
!"#$% '()*+,' -./01$23% ''(4 5"6$% ** '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 306/512
31
the damages or injunctive relief they sought, even if they prevailed on the merits.7
In light of those risks, the settlement was more than fair.
a. Plaintiffs Faced Substantial Hurdles In Proving A
Conspiracy And Anticompetitive Restraints.
To establish a right to any relief—monetary or injunctive—plaintiffs would
have to prove (among other things) that the networks’ challenged rules (1) were
agreements in restraint of trade; and (2) were unlawful —that is, anticompetitive—
restraints. See, e.g., Bd. of Trade v. United States, 246 U.S. 231, 238–39 (1918).
As Judge Gleeson found, plaintiffs “face[d] a substantial likelihood of securing no
relief at all.” SPA15.
First , as to the agreement, plaintiffs initially asserted that Visa and
MasterCard were “‘structural conspiracies’ or ‘walking conspiracies’” by virtue of
their organization as bankcard associations of member banks. SPA19; see SPA28.
That contention, even if arguable when this case was filed, crumbled when the
networks completed their IPOs. Post-IPO, member banks no longer retained their
ownership of Visa or MasterCard, lacked voting control over the networks’
7These were not the only hurdles plaintiffs had to surmount. They faced strong
opposition on their class-certification motion and would have confronted “practical problem[s]” in convincing a jury to award them damages. See, e.g., SPA33– SPA34. And, even if plaintiffs had managed to eke out any sort of victory, an
appeal to this Court, potentially followed by further proceedings in the SupremeCourt or on remand to the District Court, would have increased their chances ofnon-recovery, not to mention prolonged the already lengthy period that they couldexpect to wait before obtaining any relief. See Grinnell , 495 F.2d at 457.
!"#$% '()*+,' -./01$23% ''(4 5"6$% *9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 307/512
32
respective Boards of Directors, and had no power to adopt, maintain, or modify
any of the networks’ payment-card rules or policies. See D.E.1477-7 ¶¶ 181–191.
As the District Court recognized, the IPOs brought the networks “out from under
the control of their member banks” and thereby “strengthened the . . . argument
that . . . the setting of interchange fees cannot constitute horizontal price-fixing.”
SPA28.
The Merchant Trade Groups argue that, post-IPOs, both Visa and
MasterCard maintained default interchange (like other rules plaintiffs challenged),
and that this somehow indicates a conspiracy among the Defendants to retain the
pre-existing anticompetitive rules. Br. 15–16 & n.8, 47–49. But the persistence of
the challenged rules simply shows that the rules are a procompetitive feature of a
well-functioning system. Plaintiffs faced serious obstacles to proving that, post-
IPOs, Visa and MasterCard failed to make independent decisions regarding the
challenged rules.8
Second , the District Court’s lengthy discussion of the network rules that
plaintiffs challenged highlights plaintiffs’ likely inability to prove an unlawful
8On July 18, 2014, Judge Gleeson denied Defendants’ motions to dismiss opt-out
complaints brought by certain merchants. In re Payment Card Interchange Fee &
Merchant Disc. Antitrust Litig.—Opt Out Cases, No. 1:14-md-1720-JG (E.D.N.Y.
July 18, 2014) (minute order and transcript (D.E.104 & 105). The court did so onthe pleadings without passing on the underlying merits of the opt-out claims orrevisiting its earlier statements in the judgment on appeal about the litigation risksto plaintiffs.
!"#$% '()*+,' -./01$23% ''(4 5"6$% *+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 308/512
33
restraint of trade. SPA16; SPA28–SPA32. The District Court determined that the
default interchange and Honor-all-Cards “rules undeniably have significant
procompetitive effects,” SPA16, and the Eleventh Circuit has held default
interchange lawful, NaBanco, 779 F.2d at 602. Furthermore, other courts have
found lawful no-surcharge rules similar to those challenged by plaintiffs.9
Here, the District Court observed that default interchange lay “at the core of
the defendants’ successful business model,” SPA29, and underscored that it
“played an essential role in the construction of the networks at issue here,” SPA30.
The Merchants Trade Groups nakedly assert that what has been true historically is
not necessarily true today given the alleged “matur[ity]” of the networks. E.g., Br.
38. But they ignore that the underlying rationales which courts have previously
found compelling remain just as vital today. Likewise, they ignore the abundant
evidence on this subject before the District Court, including expert analyses
provided not only by Defendants but also by the court’s independent expert. See,
e.g., K. Murphy Rep. ¶¶ 32–34, 98, 202, 209, 219–224; D.E.5965 at 8, 13–22.
9See, e.g., Tennessean Truckstop, Inc. v. NTS, Inc., 875 F.2d 86 (6th Cir. 1989);
Kartell v. Blue Shield of Mass., Inc., 749 F.2d 922 (1st Cir. 1984) (Breyer, J.).Defendants showed that without restrictions on surcharging, merchants couldattempt to nullify “Honor-all-Cards” by imposing an exorbitant surcharge on a
given card, D.E.1477-7 ¶ 163, and harm consumers by offering low prices inadvertisements but effectively raising the price through surcharging at the point ofsale, id. ¶ 160, or opportunistically surcharging consumers lacking paymentalternatives, id. ¶ 161.
!"#$% '()*+,' -./01$23% ''(4 5"6$% *, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 309/512
34
Default interchange fees serve functions that have not changed with the
passage of time. SPA29. Default interchange still obviates the need for thousands
of issuers and acquirers to negotiate separately. See SPA29–SPA30. Default
interchange thus eliminates a massive transaction cost on a system that has grown
tremendously in the last few decades, thanks in large part to the rule’s
minimization of such costs. D.E.1550 ¶ 181; see SPA29; T. Murphy Decl. ¶¶ 24–
28; Sheedy Decl. ¶¶ 24–27 (lodged with D.E.2088). Courts have highlighted this
procompetitive efficiency, concluding that default interchange rules are “of vital
import to the day-to-day functioning of the system” because they eliminate “the
costly uncertainty and prohibitive time and expense of ‘price negotiations at the
time of the exchange’ between the thousands of [network] members.” NaBanco,
596 F. Supp. at 1259–60; see In re ATM Fee Antitrust Litig., 554 F. Supp. 2d 1003,
1007 (N.D. Cal. 2008).
Moreover, as the Eleventh Circuit concluded in NaBanco, “[f]or a payment
system like VISA to function, rules must govern the interchange of the
cardholder’s receivable,” because, “absent prearranged interchange rules,”
“universality of acceptance—the key element to a national payment system—could
not be guaranteed.” 779 F.2d at 602. Absent a system of mandatory acceptance of
all network-branded cards, a customer walking into a store that purports to accept
Visa would have no assurance that the Visa-branded card issued by his or her
!"#$% '()*+,' -./01$23% ''(4 5"6$% *; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 310/512
35
particular bank would function at that store. Acceptance would depend on whether
compensation arrangements had been reached with that particular customer’s
issuing bank covering transactions from this particular merchant. The fundamental
importance of universal acceptance— i.e., that any card bearing a network brand
will work at any merchant that purports to accept the brand—to network
functioning and image has not changed with time. Instead, universal acceptance
remains central to the Visa and MasterCard brands. See, e.g., Elzinga Rep. at 16,
71–74 (lodged with D.E.2088); K. Murphy Rep. ¶¶ 111, 206–224; T. Murphy
Decl. ¶¶ 25–27; Sheedy Decl. ¶¶ 24–28.10
Thus, the District Court observed that “those networks provide substantial
benefit to both merchants and consumers.” SPA30. The court noted that
Defendants’ showings about procompetitive effects were essentially undisputed,
and rejected Objectors’ suggestion that these beneficial “practices have become
antitrust violations by virtue of industry maturation.” SPA29; see SPA30 (similar).
Instead, without making any merits determination, Judge Gleeson endorsed the
court-appointed economic expert’s finding that “‘plaintiffs face considerable
difficulty in establishing [that] default interchange . . . cause[s] anticompetitive
10The record showed many other procompetitive features, including enhancing
cardholder rewards programs, which increase card use and, unsurprisingly,
merchant sales, D.E.1550 ¶ 186; Sheedy Decl. ¶ 31; guaranteeing payment toacquirers and merchants, even in cases of fraud or nonpayment, D.E.1550 ¶ 187; T.Murphy Decl. ¶ 29; and funding innovations and enhancements to the networks,D.E.1550 ¶¶ 182–183; see Sheedy Decl. ¶ 18; SPA29.
!"#$% '()*+,' -./01$23% ''(4 5"6$% *: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 311/512
36
harm that outweighs [its] pro-competitive benefits.’” SPA31 (emphasis added)
(crediting Professor Sykes’ view that “‘plaintiffs face a substantial probability of
securing little or no relief at the conclusion of trial’” (alteration omitted)); accord
SPA15. Similarly, the court recognized that “the prospect that [the default
interchange rule’s] anticompetitive effects remain outweighed by its
procompetitive ones is real.” SPA30. These observations are consistent with
NaBanco, decided when Visa was a bankcard association, in which the Eleventh
Circuit affirmed that the interchange fee “is more procompetitive than
anticompetitive.” 779 F.2d at 605. Moreover, Judge Gleeson’s findings
demonstrate the incorrectness of the Merchant Trade Groups’ assertion that the
District Court failed to recognize the need to weigh procompetitive effects against
any anticompetitive ones. Br. 46.
Likewise, the Merchants Trade Groups are wrong that the allegedly
anticompetitive effects of default interchange were “largely undisputed.” Br. 40–
41. To the contrary, Defendants produced evidence that network output increased ,
which is the opposite of what one would expect from an anticompetitive system.
D.E.5965 at 10–11. In any event, the Trade Groups’ argument misses the point.
The key question facing the District Court was whether there was a real risk that
plaintiffs would fail to carry their burden of proving that any anticompetitive
effects outweigh the rules’ procompetitive benefits. The many and substantial
!"#$% '()*+,' -./01$23% ''(4 5"6$% 97 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 312/512
37
procompetitive features created a serious risk that plaintiffs would fail to make that
showing, and thus there was no reason for Judge Gleeson to focus on the relative
difficulty of proving whether default interchange had any anticompetitive effects.
Finally, the District Court recognized that “[n]o American court has ever
held that Visa or MasterCard’s default interchange rules violate the antitrust laws.”
SPA30. In addition to endorsing the NaBanco court’s findings, id., Judge Gleeson
recognized (id.) that the Ninth Circuit more recently affirmed the dismissal of
claims that “Banks conspired to fix the interchange fee,” holding that “merely
charging, adopting or following the fees set by a Consortium is insufficient as a
matter of law to constitute a violation of Section 1 of the Sherman Act.” Kendall
v. Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008). Given the evidence here,
plaintiffs faced a serious risk that the court would follow these decisions and find
default interchange lawful. SPA30–SPA31.
The District Court concluded that plaintiffs’ Honor-all-Cards challenge was
similarly tenuous, given the reality that “assurances that a network’s cards will be
accepted wherever the network’s logo is displayed [are] critical to customers’
desire to carry such cards and to merchants’ willingness to accept them.” SPA31.
If merchants could choose which Visa- or MasterCard-branded cards to accept, the
concept of a network and a network brand would lose all meaning. The court
recognized that courts, economists and practitioners have therefore found Honor-
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 313/512
38
all-Cards or similar rules “to be procompetitive.” Id. (emphasis in original)
(analogizing Honor-all-Cards to the system upheld in Buffalo Broadcasting Co. v.
ASCAP , 744 F.2d 917 (2d Cir. 1984)); SPA32 (reiterating that “procompetitive
features” cast doubt on plaintiff’s ability to succeed); Sheedy Decl. ¶¶ 33–35;
T. Murphy Decl. ¶¶ 37–40. As detailed, supra at 19, the District Court observed
that Objectors’ lead counsel had described the rule as a “‘classic example of a
restraint that was actually necessary.’” SPA32.
In addition, as Professor Sykes noted, “a showing that default interchange
and related network rules . . . are anticompetitive requires . . . a convincing
description of a counterfactual world in which the purportedly anticompetitive
practices of each network are eliminated, and in which the resulting market
equilibrium is demonstrably superior from an economic standpoint.” D.E.5965 at
19–20. Absent a plausible explanation of how a payment card market could be
viably maintained in the absence of the challenged rules, plaintiffs stood little
chance of proving that those rules violate the Sherman Act. SPA31 (endorsing
Professor Sykes’ conclusion that it would be difficult to establish that the alleged
anticompetitive harm of Honor-all-Cards outweighs its procompetitive effects).
Yet, as Defendants’ Daubert filings and own expert reports showed, Objectors
never presented a reliable expert or other analysis of what a realistic counterfactual
world would look like. See D.E.5965 at 23–25 (Sykes’ criticisms of plaintiffs’
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 314/512
39
theory). Objectors fail to come to grips with the substantial risk faced by the Class
Plaintiffs on the merits.
If that were not enough, legal developments beyond this litigation further
eroded plaintiffs’ claims by removing some of the practices they challenged as
unlawful. See SPA10 & n.6; supra at 10–11 (discussing rules changes triggered by
the Durbin Amendment and the DOJ consent decree). This increased the chances
that the going-forward interchange system would not, on balance, be deemed an
unlawful restraint of trade.
b. Even If Plaintiffs Could Establish Liability, It Was
Doubtful That They Would Obtain Their Desired
Remedies.
Plaintiffs also faced long odds as to the relief they sought. See SPA32–
SPA33.
i. The District Court rightly recognized that Illinois Brick raised serious
doubts that merchants could ever recover any damages. SPA27–SPA28 & n.15.
Illinois Brick not only would foreclose the accrued damages that the (b)(3) class
sought, but also would extinguish plaintiffs’ ability to recover any future monetary
damages allegedly resulting from the interchange system that remained in place
following the (b)(2) settlement. Objectors’ contention that surrendering future
claims for damages was a substantial sacrifice is off-base, in large part because
they never confront Illinois Brick ’s potential impact on those hypothetical claims.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 94 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 315/512
40
In Illinois Brick , the Supreme Court held that the Clayton Act permits only
direct purchasers of a product to sue over alleged price-fixing. 431 U.S. at 735–
37; see id. at 726–29. Here, merchants allege that Defendants fixed the price of
interchange fees. SPA22. But the acquiring banks, not merchants, pay those fees
directly to the issuers. The challenged network interchange fee rules address only
the acquiring-bank-to-issuing-bank payment obligation. Merchants typically pay
their acquirers a merchant discount fee, which the evidence showed is not required
by anything in the network rules, not “fixed” by horizontal agreement among
acquirers, and not homogeneous in practice. See, e.g., D.E.1478-4 ¶¶ 43–44, 51–
57; D.E.1550 ¶¶ 131, 152; see SPA7–SPA8. Plaintiffs contend that the discount
fee simply passes on the cost of the interchange fee jot-for-jot, but the Supreme
Court rejected that as a reason to depart from the direct-purchaser-only rule. Ill.
Brick , 431 U.S. at 743–44 (“Respondents here argue . . . that pass-on theories
should be permitted for middlemen that resell goods without altering them and for
contractors that add a fixed percentage markup to the cost of their materials in
submitting bids. . . . We reject these attempts to carve out exceptions . . . for
particular types of markets.” (footnote omitted)); accord Kansas v. UtiliCorp
United, Inc., 497 U.S. 199, 216 (1990) (“ample justification exists for [the Court’s]
decision not to ‘carve out exceptions to the [direct purchaser] rule for particular
types of markets.’”) (second alteration in original).
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 316/512
41
This Court and the Ninth Circuit have ruled Illinois Brick bars damages
sought by downstream payors of payment-card fees and charges that—like
interchange fees—an intermediate party pays in the first instance. See Paycom
Billing Servs., Inc. v. MasterCard Int’l, Inc., 467 F.3d 283, 291–92 (2d Cir. 2006);
In re ATM Fee Antitrust Litig., 686 F.3d 741, 744–45, 749–50 (9th Cir. 2012), cert.
denied sub nom. Brennan v. Concord, EFS, Inc., 134 S. Ct. 257 (2013). Indeed, as
Judge Gleeson recognized, the Ninth Circuit’s ruling, which addressed another
system of interchange payments, rejected the same “exceptions to the Illinois Brick
rule that plaintiffs here have relied on.” SPA28 n.15 (citing ATM Fee, 686 F.3d at
750–58). Thus, the District Court correctly concluded, “the indirect purchaser
doctrine would be a source of significant uncertainty for the plaintiffs.” SPA28.
Although Objectors fail to address Illinois Brick ’s application to plaintiffs’
claims here,11
the Merchant Trade Groups dismiss Judge Gleeson’s discussion of
the case, contending that the court committed a “legal error” in using Illinois Brick
to “justif[y] the (b)(2) Settlement” because Illinois Brick applies only to damages,
not injunctive relief. Br. 35. The argument is meritless.
To start, that is not what the District Court did. It acknowledged that Illinois
Brick holds only “that ‘indirect purchasers’ may not recover antitrust damages,”
11The Merchants, American Express, Blue Cross Blue Shield, Discover, First
Data, and the Retailers and Merchants Objectors do not cite it. U.S. PIRG appearsto recognize the potential merit of the Illinois Brick argument. Br. 26 n.6.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 99 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 317/512
42
SPA27, and repeatedly discussed the doctrine in that context, see, e.g., id. (“treble-
damages antitrust actions”); id. (“actions for antitrust damages”); SPA28 (similar).
The court discussed Illinois Brick —like all of the litigation risks here, see
SPA25—not as a risk to the (b)(2) class, but to plaintiffs generally. Moreover, the
Merchant Trade Groups claim that “the (b)(2) settlement” “unjustifiably releases
merchants’ claims for future damages.” Br. 51 (emphasis added, capitalization
omitted). As discussed below, there is nothing improper in the release. But to the
extent the Merchant Trade Groups are suggesting that plaintiffs gave up something
of value when releasing claims for future damages, the viability and value of those
claims—including the impact of Illinois Brick —is highly relevant.
ii. Even if Illinois Brick was not an absolute bar, “the history of antitrust
litigation is replete with cases in which antitrust plaintiffs succeeded at trial on
liability, but recovered no damages, or only negligible damages.” Wal-Mart II ,
396 F.3d at 118 (internal quotation marks omitted). Any past or future damages
claim here faced that risk. Given plaintiffs’ claim that the default interchange
system overcharges them, it was essential for plaintiffs to construct a rigorous
model for ascertaining what interchange rates would prevail in a payment card
market that lacked default interchange and Honor-all-Cards.
No such model exists. Although plaintiffs suggested a number of
possibilities, including an interchange fee of 0.0% and an interchange fee that was
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 318/512
43
equivalent to the rate charged for debit transactions, D.E.5965 at 22 (Sykes Rep.),
those scenarios are unrealistic. Judge Gleeson found that “[i]t is not likely that
credit card interchange fees would . . . become zero.” SPA33. As Professor Sykes
explained, zero interchange is implausible because, at least “to [his] knowledge[,]
no general purpose credit or charge card network of any consequence has ever
evolved with zero interchange.” D.E.5965 at 23–24. And debit-rate interchange
was unlikely given that credit cards are more costly to issue than debit cards due to
their many advantages to consumers (e.g., credit itself, float, purchase protection,
and reward programs). See SPA33; D.E.5965 at 16, 24.
iii. Finally, the Class Plaintiffs faced major obstacles as to the injunctive
relief sought, most notably the inherent limits on a federal court’s remedial
authority and the many changes to the legal landscape since the case began.
Over the course of the litigation, there were numerous changes that
effectively eliminated many of the network structures that plaintiffs had
complained of: The IPOs terminated the banks’ control of Visa and MasterCard;
Dodd-Frank expanded merchants’ discounting authority; and the settlement with
DOJ enlarged the merchants’ discounting power still further. Additionally, the
settlement here, of course, permits surcharging on a going forward basis.12
All of
12Objectors decry the surcharging relief because some states’ laws prohibit
surcharging, which means that some merchants will not be able to surcharge Visaand MasterCard transactions even in a post-settlement world. See, e.g., Merchants’
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 319/512
44
these developments both weakened plaintiffs’ claim that the going-forward system
was anticompetitive, see supra § I.A.2.a, and narrowed the range of remedies
available to the District Court (beyond that achieved in the settlement) in the event
it concluded that interchange fees were in fact set at supracompetitive levels.
Put simply, by the time the District Court was evaluating the prospects of
further litigation in light of the settlement, the only other injunctive remedies that
remained possible concerned default interchange and Honor-all-Cards. But, as
discussed in detail above, those two features of the core network rules had been
repeatedly recognized by courts as, on balance, procompetitive, the record in this
case confirmed the continuing importance of those rules to the universal
acceptance that is central to the Visa and MasterCard brands, and both the court-
appointed expert and Judge Gleeson expressed serious doubts that plaintiffs could
mount a successful challenge on the merits to those rules. Supra § I.A.2. Any
request to enjoin default interchange and Honor-all-Cards out of existence entirely
would have required precisely the evidence plaintiffs had failed to bring forth: an
explanation of how a supposed-restraint-free world would have produced networks
without such rules at all.
Br. 15, 22–23. The Class’s brief discusses the going-forward importance of thesurcharging relief, Class Br. § II.A.2, and we touch on the importance the class
placed on such relief throughout this litigation below, infra § I.A.3.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 320/512
45
Plaintiffs might have asked the court to impose a different default
interchange rate than that imposed by the networks. But judicial regulation was
improbable, because courts enforcing the antitrust laws cannot set prices. See, e.g.,
Image Technical Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1225 (9th Cir.
1997). But cf. Merchants’ Br. 14 (complaining that the settlement immunizes from
suit “the default interchange schedules”). Any effort to urge judicial regulation
also was compromised by the lack of a convincing counterfactual model showing
that a payment-card system could flourish—or, for that matter, even function—
with modified or judicially regulated interchange fees and card-acceptance
policies. As Judge Gleeson summarized the weaknesses in plaintiffs’ case for
injunctive relief:
Even if the plaintiffs spent several years pursuing this unwieldycase to a successful conclusion (despite substantial odds againstsuch a result), this Court would be in no position to grant the
sweeping relief the objectors seek . It cannot regulateinterchange fees or enjoin nonparties or preempt state laws orreform network rules that do not violate the antitrust laws. The
Sherman Act affords relief only from certain proven
anticompetitive business practices.
SPA17 (emphases added); see SPA14.
In sum, plaintiffs had little hope of obtaining any of the relief they sought.
The rules changes and billions of dollars they secured through this settlement
would have been in substantial doubt if this case went forward.
!"#$% '()*+,' -./01$23% ''(4 5"6$% 9: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 321/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 322/512
47
imposition of a no-surcharge rule and/or the establishment of the interchange fee
causes the merchant discount fee to be set at supracompetitive levels.” 398 F.
Supp. 2d at 1358 (emphasis added).
The Class Plaintiffs maintained that focus at summary judgment, long before
the settlement, describing surcharging as “the most effective tool for merchants to
influence consumers’ payment choices.” Mem. Supp. Summ. J. (D.E.1538) at 8
(citing expert reports); see, e.g., id. at 36, 54. As Judge Gleeson summarized, it
was a rule change that the Class and individual plaintiffs “fought very hard to
obtain.” SPA36. Accordingly, Objectors’ new antipathy toward that relief is
suspect.
Objectors also challenge the (b)(2) settlement’s value by claiming that the
settlement “creates a worse result than if the Plaintiffs tried and lost the case.”
Merchant Trade Groups’ Br. 52. This line of argument is doubly flawed. First, it
is principally a challenge to the scope of the releases, yet—as discussed in depth
infra § II—both the language and effect of the releases are standard, and “[t]he law
is well-established in this Circuit and others that class action releases may include
claims not presented and even those which could have not been presented.” Wal-
Mart II , 396 F.3d at 107; accord Matsushita Elec. Indus. Co. v. Epstein, 516 U.S.
367, 376–77 (1996). Second, Objectors rest their argument on the indefensible
notion that, if a certified (b)(2) class had lost at trial , the exact same plaintiffs
!"#$% '()*+,' -./01$23% ''(4 5"6$% +' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 323/512
48
could have filed an identical suit the following day because—in Objectors’ view—
each card swipe made under the networks’ rules would be a wholly new antitrust
violation so different from those alleged in the earlier action that it would
somehow evade traditional rules of preclusion. Merchant Trade Groups’ Br. 52.
Objectors are off the mark. “‘A final judgment on the merits of an action
precludes the parties or their privies from relitigating issues that were or could
have been raised in that action.’” SEC v. First Jersey Sec., Inc., 101 F.3d 1450,
1463 (2d Cir. 1996) (emphases added, alteration omitted) (quoting Federated
Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981)). Res judicata represents
“finality as to the claim or demand in controversy, concluding parties and those in
privity with them, not only as to every matter which was offered and received to
sustain or defeat the claim or demand, but as to any other admissible matter which
might have been offered for that purpose.” Id. (quoting Nevada v. United States,
463 U.S. 110, 129–30 (1983)).
In other words, if a (b)(2) litigation class had been certified and had
judgment entered against it, absent class members could not simply have re-
litigated the lawfulness of default interchange, Honor-all-Cards, no-surcharge, and
the other rules at issue here. See id. “[U]nder elementary principles of prior
adjudication a judgment in a properly entertained class action is binding on class
members in any subsequent litigation.” Cooper v. Fed. Reserve Bank of
!"#$% '()*+,' -./01$23% ''(4 5"6$% +( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 324/512
49
Richmond , 467 U.S. 867, 874 (1984). “A judgment in favor of the defendant
extinguishes the claim, barring a subsequent action on that claim.” Id.14
Indeed, if
preclusion were not the result, trials of Rule 23(b)(2) claims would be little more
than an endless moot court for plaintiffs’ counsel, who could continue to press the
same claims over and over while hoping for a different result.
Thus, when plaintiffs settled, they did not put themselves in a position worse
than unsuccessful litigation would have produced. Instead, in exchange for
receiving going-forward settlement relief with respect to some of the rules, they
agreed to foreclose continued challenges to other rules. That type of compromise
is what settling parties always do, and the District Court properly found that
compromise fair and reasonable given the litigation risks.
14Rule 23(e) itself, see Amchem Prods., Inc. v. Windsor , 521 U.S. 591, 623 (1997),
as well as the adequacy of representation doctrine under Rule 23(a)(4) (requiringthe representatives “adequately protect the interests of the class”), provide the
bulwark against unfairly binding an absent class member to a non-opt-out class judgment. See, e.g., Hansberry v. Lee, 311 U.S. 32, 42–43 (1940); Robinson v.
Metro-N. Commuter R.R., 267 F.3d 147, 165 (2d Cir. 2001), abrogated on other
grounds by Hecht v. United Collection Bureau, Inc., 691 F.3d 218 (2d Cir. 2012); Marcera v. Chinlund , 595 F.2d 1231, 1240 n.13 (2d Cir.) (“[D]ue process permits binding absentees to a judgment with respect to common questions of law if theyhave been adequately represented in the suit.”), vacated on other grounds sub nom.
Lombard v. Marcera, 442 U.S. 915 (1979); see also Baby Neal ex rel. Kanter v.
Casey, 43 F.3d 48, 59 (3d Cir. 1994) (analysis of (b)(2) class certificationrecognizes that absent plaintiffs will “be[] bound by such judgment in the
subsequent application of principles of res judicata.’”). Defendants already haveshown why Rule 23(e) is satisfied here, supra § I.A, and embrace the Class’sdiscussion of why its representation was adequate (and the Class’s explication ofwhy the other Rule 23(a) factors are satisfied here). See Class Br. § I.
!"#$% '()*+,' -./01$23% ''(4 5"6$% +4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 325/512
50
B. The District Court Did Not Abuse Its Discretion In Certifying The
(b)(2) And (b)(3) Settlement Classes In This Case, Based On TheSpecific Facts In This Record.
A district court that is presented with a proposed class settlement must,
separate and apart from the Rule 23(e) analysis, “determine whether the
requirements for class certification in Rule 23(a) and (b) have been satisfied.”
AIG, 689 F.3d at 238. Judge Gleeson did so here. SPA51–SPA53 & n.20; see also
SPA36–SPA43. As the Class Plaintiffs’ brief shows, Judge Gleeson did not abuse
his discretion in finding those prerequisites met in this case. Several points bear
additional mention.
Objectors assert that a (b)(2) class was improperly certified for settlement
because the case involved claims for money damages and injunctive relief, and the
settlement extinguishes claims for money damages. See Merchants’ Br. at 32–66.
Objectors’ arguments blend a certification objection with an objection to the
release of speculative “damages” claims that might arise in the future, and assert
that reversal is proper because they were not permitted to opt out of the (b)(2)
class. See, e.g., id. at 32–36, 41–46, 52, 60. Objectors are mistaken about the facts
and the law.
!"#$% '()*+,' -./01$23% ''(4 5"6$% +* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 326/512
51
1. The Non-Opt-Out (b)(2) Class Settlement Properly
Resolved Existing Claims For Injunctive Relief, Not ThoseFor Existing Monetary Damages.
Objectors’ challenge rests on the oft-repeated premise that the (b)(2) class
sought to resolve “individualized claims for money damages.” Merchants’ Br. 32
(capitalization omitted).15
The premise is false. From the outset of this case, the
putative (b)(2) class sought injunctive relief only. See D.E.317 ¶ 97(b). The (b)(2)
class did not pursue any present, already-accrued claim for damages, and did not
receive any monetary payments through the settlement agreement. SPA84–SPA87
¶ 13; SPA139 ¶ 39 (“[m]embers of the Rule 23(b)(2) Settlement Class shall receive
no money payments but shall receive” only the rules modifications detailed in the
agreement). The (b)(2) release also does not require plaintiffs to forgo any
already-accrued claim for money damages. See SPA90 ¶ 16.c; SPA92 ¶ 16.c.ix
(releasing, inter alia, claims for “damages or other monetary relief relating to the
period after the date of the Court’s entry of the Class Settlement Preliminary
Approval Order”). Any plaintiff who wishes to continue to litigate a claim for
money damages brought in this case may opt out of the (b)(3) class and face the
going-forward litigation risks, as various Objectors have done. The (b)(2) class
15See also, e.g., Merchants’ Br. 32 (same); id. at 33 (“individualized legal claims,”
“individualized awards of monetary damages,” “individualized monetary claims”);
id. at 33–34 (“individual monetary claims”); id. at 34 (“individualized monetaryclaims,” “individualized legal claims,” “individualized claim for money”); id. at 35(similar). (Some of these quotations have omitted alterations or internal quotationmarks for ease of reference.)
!"#$% '()*+,' -./01$23% ''(4 5"6$% +9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 327/512
52
compromises the originally asserted forward-looking claims for injunctive relief,
one of the most traditional remedies sought and received by (b)(2) classes, and any
liability that allegedly would flow from the post-settlement network rules. See,
e.g., SPA46; SPA18; SPA139–SPA140 ¶ 40; SPA153 ¶ 53.
Objectors urge this Court to treat the non-opt out (b)(2) class as a class about
damages claims because the release covers possible future damages claims against
the going-forward network system, and therefore urge that they were entitled to opt
out under Rule 23 and as a matter of due process. But the propriety of (b)(2)
certification does not turn on the nature of the claims released; rather it rests on the
relief demanded in the present litigation.
Objectors primarily rely on Wal-Mart Stores, Inc. v. Dukes in support of
their theory, see, e.g., Merchants’ Br. 33–35, 38–39, but that case makes clear that
the appropriate certification focus is on the claims asserted . See 131 S. Ct. 2541,
2551 (2011) (“claims must depend upon a common contention”); id. at 2552
(“class determination generally involves considerations that are enmeshed in the
factual and legal issues comprising the plaintiff’s cause of action”) (internal
quotation marks omitted). This Court has made the point with respect to a Rule
23(b)(3) settlement class, explaining that certification is examined based “on
‘questions that preexist any settlement,’ and not on whether all class members have
‘a common interest in a fair compromise’ of their claims.” AIG, 689 F.3d at 240
!"#$% '()*+,' -./01$23% ''(4 5"6$% ++ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 328/512
53
(quoting Amchem, 521 U.S. at 623). In the (b)(2) setting, although some courts
have suggested the common bond should be stronger because of the mandatory
nature of the class and possible prejudice to individual claims, see, e.g., Barnes v.
Am. Tobacco Co., 161 F.3d 127, 142–43 (3d Cir. 1998), the basic focus remains
the same: a common interest in questions that preexist any settlement. See, e.g.,
Dukes, 131 S. Ct. at 2557.
Dukes further instructs that Rule 23(b)(2) applies “when a single injunction
or declaratory judgment would provide relief to each member of the class.” Id.
This Court has similarly held that a Rule 23(b)(2) class action is a proper way for
seeking systematic changes and resolving outstanding questions about the
lawfulness of defendants’ practices. Robinson, 267 F.3d at 165; Marisol A. v.
Giuliani, 126 F.3d 372, 378 (2d Cir. 1997) (suit for injunctive relief to address
“central and systemic failures” of child welfare system satisfied Rule 23(b)(2));
contra Merchants’ Br. 34–43.
These principles apply here, where—years before the parties commenced
settlement negotiations, D.E.317 ¶ 97(b)—the (b)(2) class challenged the
networks’ core rules governing all merchants, and sought injunctive relief that
would displace and re-write those rules. The Class sought relief based on
Defendants’ “act[ions] or refus[als] to act on grounds that apply generally to the
class, so that final injunctive relief or corresponding declaratory relief is
!"#$% '()*+,' -./01$23% ''(4 5"6$% +, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 329/512
54
appropriate respecting the class as a whole,” Fed. R. Civ. P. 23(b)(2), and that
injunctive relief was sought for “an alleged group harm,” Robinson, 267 F.3d at
165. As Appellants admit, “defendants’ practices affect all class members.”
Merchants Br. 50. All class members participated in networks governed by the
same allegedly unlawful core rules (no-surcharge, no-discounting, default
interchange, Honor-all-Cards, etc.), and challenged those rules. See SPA52;
Marisol A., 126 F.3d at 378; cf. In re Nassau Cnty. Strip Search Cases, 461 F.3d
219, 227–28 (2d Cir. 2006) (finding cohesion where a (b)(3) class sought to
impose liability based on defendants’ implementation of a “blanket . . . policy”).
And, regardless of how this case were to end—dismissal on the merits, summary
judgment, jury verdict, or settlement— all class members would continue to
participate in a network governed by whatever network rules emerged from that
judgment. In short, because plaintiffs’ claims concern the legality of the networks’
governing rules and practices, the challenged conduct may “be enjoined or
declared unlawful only as to all of the class members or as to none of them.”
Dukes, 131 S. Ct. at 2557; see, e.g., Robinson, 267 F.3d at 165; SPA52 (“the
structural relief is generally applicable to the class in the manner required by Rule
23(b)(2)”); SPA46 (similar).
That is why the (b)(2) class was appropriately a mandatory, non-opt-out
class. Going forward, all Visa- and MasterCard-accepting merchants will
!"#$% '()*+,' -./01$23% ''(4 5"6$% +; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 330/512
55
necessarily operate within and be bound by the same post-settlement regime, just
as in the past, all Visa- and MasterCard-accepting merchants operated within and
were bound by the pre-settlement regime. The legal challenge plaintiffs raised is
not divisible as to individual merchants, and “the relief sought [would] perforce
affect the entire class at once.” Dukes, 131 S. Ct. at 2558.
Objectors urge that a non-opt-out class is improper because not all members
of the class will derive the same benefit from the relief provided by the settlement.
Merchants’ Br. 50–52. But the law does not require all members of a (b)(2)
settlement class to benefit equally from the relief obtained in the settlement.
Indeed, if Objectors’ view were correct, not even “the civil-rights cases at the core
of Rule 23(b)(2),” Merchants’ Br. 37, would warrant certification of a (b)(2)
settlement class. After all, not every pupil would benefit equally from a school’s
desegregation of its athletics program, see La. High Sch. Athletic Ass’n v. St.
Augustine High Sch. 396 F.2d 224 (5th Cir. 1968), nor will every employee derive
the same benefit from its employer’s adoption of more race- or gender-neutral
advancement policies, see Bishop v. Gainer , 272 F.3d 1009 (7th Cir. 2001), nor
every inmate from a change in prison medical treatment protocols, Parsons v.
Ryan, 754 F.3d 657 (9th Cir. 2014). But just as those classes are proper non-opt-
out classes, so too is the (b)(2) settlement class here, because the different weight
that class members might place on various forms of relief does not alter the fact
!"#$% '()*+,' -./01$23% ''(4 5"6$% +: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 331/512
56
that the asserted injuries arise from a uniformly applied course of conduct, and that
their injuries can be remediated via a single, unitary injunction.
In sum, either default interchange, a surcharging ban, Honor-all-Cards, or
the networks’ other rules are unlawful restraints of trade that generate
supracompetitive interchange fees—or they are not. If they are unlawful, they
impose anticompetitive restraints on all merchants within that network (including
any future merchants who participate in the network), and those restraints can be
enjoined only as to all merchants. Even as the networks allow for individualized
negotiation where the parties find it advantageous, there is no way, as a matter of
law, logic, or real-world commercial dealing, to offer a fully individualized
payment-card system for each of the millions of merchants populating the Visa and
MasterCard networks. The whole point of the networks, and an essential
contributor to their success, is that network rules are established without the need
for negotiation or fresh rule-making each time a new card is placed on the market
or a new merchant opens its doors (or comes on-line).
2. The (b)(2) Class Was Not Improperly Certified For
Settlement Because It Released Claims For Future Liability
Stemming From The Post-Settlement Rules.
Although the Objectors are wrong that the (b)(2) class sought to resolve
individualized monetary damages claims, the (b)(2) class settlement does release
future claims for liability (whether seeking damages or injunctive relief) that
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 332/512
57
purport to challenge the network rules deliberately left in place by the settlement.
That, however, does not demonstrate that the certification of the (b)(2) settlement
class was improper. Contra, e.g., Merchants’ Br. 38–40.16
It simply illustrates one
potential consequence of a proper (b)(2) class settlement, namely, the arrangement
implemented as a result of settlement can be insulated from the parties’ (and their
privies’) future legal challenges. See In re Literary Works in Elec. Databases
Copyright Litig., 654 F.3d 242, 248 (2d Cir. 2011) (holding that “the Settlement’s
release of claims regarding future infringements is not improper” where the
complaint sought “injunctive relief for future uses, and therefore contemplate[d]
these alleged future injuries”). It is no more remarkable that agreements providing
that assurance would preclude plaintiffs from bringing any species of legal
challenge to the lawfulness of the post-settlement status quo, including claims for
money damages. See San Diego Police Officers’ Ass’n v. San Diego City Emps’
Ret. Sys., 568 F.3d 725, 734–36 & n.7 (9th Cir. 2009) (enforcing release in (b)(2)
class settlement to hold that monetary damages claims “alleg[ing] the same injury”
and “the same wrong” as in the released action were “barred by the doctrine of
claim preclusion”); Nottingham Partners v. Trans-Lux Corp., 925 F.2d 29, 32–34
16As a technical matter, Objectors’ arguments are little more than challenges to
release’s scope. Nonetheless, because Objectors raise the release of unasserted
claims for future damages under their challenge to (b)(2) certification, we discusshere briefly both why the release is lawful, and the lack of authority for Objectors’argument. For the fuller discussion of the lawful scope of the release, see § II
below.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 333/512
58
(1st Cir. 1991) (enforcing release of claims in state court Rule 23(b)(2) action to
preclude damages claims by plaintiffs who fell within class definition, reasoning
“[t]he two suits, notwithstanding any differences in remedies sought or theories of
recovery pleaded, shared a common gravamen. In sum, the instant case bore a
sufficiently close relation to the Dana complaint to come within the plain language
of the general release formulated as part of the Dana settlement.”).
Objectors refuse to accept that plaintiffs settling claims challenging
generally applicable, uniform conduct (like the network rules here) must be able to
promise not to sue the defendants for following the settlement’s terms. This is
nothing less than a refusal to acknowledge that litigation has consequences, and
judgments have going-forward impacts. For example, in a litigated case, if a (b)(2)
plaintiff class loses on the merits of an injunctive claim because a challenged
practice is found to be lawful, there are consequences that go beyond the denial of
the injunctive relief requested. Since any future damages claim challenging the
same conduct depends on the ability to demonstrate liability —that is, some legal
violation by the defendant—the future damages claim will be doomed because any
effort to establish liability would be precluded by the prior judgment. See supra at
47–49 (discussing res judicata). The legal system does not tolerate, much less
demand, endless litigation over the lawfulness of the same behavior. The release at
issue here has a similar effect.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 334/512
59
Were it otherwise, no (b)(2) settlement (or litigation on the merits) could
ever conclusively resolve the legality of a particular network, practice, or system of
rules. This Court has acknowledged that such resolutions are possible. E.g., TBK
Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 460 (2d Cir. 1982) (recognizing
the essentiality of “achiev[ing] a comprehensive settlement that would prevent
relitigation of settled questions at the core of a class action”); see infra § II
(discussing lawful scope of releases).
As Objectors would have it—particularly by framing their arguments in
terms of a purported due process right, see Merchants’ Br. 6, 32–48; First Data Br.
9–24—any plaintiff dissatisfied with the settlement must have an opt-out right to
preserve its ability to later claim that the settlement left an unlawful state of affairs
in place. Such plaintiffs, even if opting out, would get to enjoy the benefits of the
injunctive relief provided by the settlement even as they endlessly sue to force
further changes to the system at issue or recover going-forward damages based on
that system. That repeated cycle would destroy the stability on which networks
(and similar entities) rely for their efficient operation, if not their survival.
Objectors’ position means that each class member could hold a veto over the (b)(2)
settlement, which would make settlements that much harder to achieve in the first
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 335/512
60
place.17
This position is neither tenable, for the many reasons just discussed, nor
supported by the cases upon which Appellants rely.
a. Dukes Does Not Preclude Certification Of The
23(b)(2) Settlement Class.
The Merchants’ brief invokes Dukes in support of its release-based
challenge to the certification of the (b)(2) settlement class. That effort fails.
To begin, Dukes is a case about certification of litigation classes, not about
the scope of a release. As noted above, supra § I.B.1, Dukes strongly supports the
propriety of the Rule 23(b)(2) settlement class here based on the claims asserted by
plaintiffs.
Moreover, Dukes addressed only a single (b)(2) class that attempted to
include within its scope individual monetary claims for backpay based on alleged
previous discrimination. The Court said as much, concluding that “the
combination of individualized and classwide relief in a (b)(2) class” cannot be
squared with the history and structure of the rule. 131 S. Ct. at 2557–58 (emphasis
17 Particularly where, as here, defendants have already contested these issues acrossmultiple litigations and entered settlements that failed to bring repose, see, e.g.,Wal-Mart II , 396 F.3d at 101–03, 118 (settlement and releases concerning Honor-all-Cards), a settlement would be impractical, if not impossible to reach, because arelease often is the primary benefit a defendant receives. See Literary Works, 654F.3d at 247–48; Wal-Mart II , 396 F.3d at 106; Sullivan v. DB Invs., Inc., 667 F.3d273, 311 (3d Cir. 2011) (en banc) (“[A]chieving global peace is a valid, and
valuable, incentive to class action settlements. . . . No defendants would considersettling under [a] framework [where the release covered only certain qualifyingclass members], for they could never be assured that they have extinguished everyclaim from every potential plaintiff.”).
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 336/512
61
added). Therefore, the Court construed the rule to proscribe such combinations
where the monetary component of the relief sought was more than merely
“incidental” to the class’s demand for injunctive or declaratory relief. Id. at 2557–
60; see also id. at 2548–49 & n.2.
This case is completely different. Here, the (b)(2) class claims for injunctive
relief and the (b)(3) class claims for monetary damages arising from past conduct
have been separated, with different procedures adopted as to each settlement class
in light of their differing natures (including with respect to opt-out rights). The
(b)(2) class in Dukes sought to do precisely what the (b)(2) class here does not do:
bind class members to the resolution of non-incidental, individualized damages
claims actually asserted by the (b)(2) class.
Consequently, the quotations that Objectors lift from Dukes do not address
releases of future claims of liability, let alone claims of liability founded on
defendants’ adherence to the very regime achieved through the (b)(2) settlement.
See, e.g., Merchants’ Br. 34–35, 45.18
Rather, those quotations speak to the
compromise of already-accrued, presently available claims. See Dukes, 131 S. Ct.
at 2557 (concluding that “claims for monetary relief may [not normally] be
certified under that provision”) (emphasis added); id. at 2559 (observing that
18
In fact, the Dukes Court did not say a word about the relevance to (b)(2)certification of either claims for future damages or claims released in class-actionsettlements, let alone the relevance of a class settlement’s release of claims forfuture damages.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 337/512
62
plaintiffs’ proposed “test . . . creates perverse incentives for class representatives to
place at risk potentially valid claims for monetary relief,” such as the plaintiff-
employees’ claims for compensatory damages in Dukes itself, which the class
abandoned, instead pursuing only their more modest backpay claims). As the text
of the (b)(2) release makes plain, no such compromise took place here. SPA169
¶ 68.
And, far from being condemned by Dukes, the two-class approach has
flourished in its wake. See Gooch v. Life Investors Ins., 672 F.3d 402, 427–28 (6th
Cir. 2012) (approving use of separate (b)(2) and (b)(3) classes in combination);
Johnson v. Meriter Health Servs. Emp. Ret. Plan, 702 F.3d 364, 371 (7th Cir.
2012) (suggesting that “divided certification” of a (b)(2) declaratory class and a
subsequent (b)(3) damages class would be consistent with Dukes); Huyer v. Wells
Fargo & Co., 295 F.R.D. 332, 344–45 (S.D. Iowa 2013); Bristol Vill., Inc. v. La.-
Pac. Corp., 916 F. Supp. 2d 357, 369–70 (W.D.N.Y. 2013); Sykes v. Mel Harris &
Assocs., LLC , 285 F.R.D. 279, 293 (S.D.N.Y. 2012) (Chin, J.) (“[t]hat plaintiffs
are seeking substantial monetary damages is of no concern given the Court’s
certification of separate Rule 23(b)(2) and Rule 23(b)(3) classes addressing
equitable relief and damages, respectively”).
The simple truth is that Dukes does not discuss releases, compromises of
future claims, or even class settlements generally. Objectors’ repeated invocation
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 338/512
63
of that decision does not demonstrate that the District Court abused its discretion
either in certifying the settlement classes or in approving the settlement.
b. Shutts Also Does Not Support The Argument That
The Release Rendered The (b)(2) Class Improper.
Just as the (b)(2) settlement is proper under the Federal Rules, it does not
offend due process under Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 805
(1985), as the Merchants (at 32–33) erroneously contend. Shutts involved already-
existing claims—specifically, interest allegedly owed on already-paid natural gas
royalties. 472 U.S. at 800. Nothing in Shutts, however, suggested that a plaintiff
has a due process-protected property interest in an inchoate, unaccrued future
claim. See id. at 808. To the contrary, it is well-established that “[n]o person has a
vested interest in any rule of law entitling him to insist that it shall remain
unchanged for his benefit.” N.Y. Cent. R.R. v. White, 243 U.S. 188, 198 (1917)
(collecting cases).
c. This Court’s Cases Also Do Not Lead To A Different
Outcome.
This Court’s cases cited by the Merchants (at 36–37) do not show that the
releases here precluded certification of the (b)(2) settlement class.
By Objectors’ own admission, this Court in Wal-Mart I (a/k/a Visa Check ),
280 F.3d 124, reserved decision on (b)(2) certification in that case, analyzing the
propriety of certification only under Rule 23(b)(3), see Merchants’ Br. 36–37, and
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 339/512
64
Hecht v. United Collection Bureau, Inc., 691 F.3d 218 (2d Cir. 2012), dealt with
the (here-irrelevant) issue of the adequacy of the notice of opt-out rights in a suit
adjudicating a backward-looking damages claim, see id. at 222–23; Merchants’ Br.
36.
In Stephenson v. Dow Chemical Co., a group of Vietnam Veterans sued for
damages based on harms that had already been inflicted on them but whose Agent
Orange injuries did not manifest until after expiration of the settlement fund
established in an earlier lawsuit. 273 F.3d 249, 257–58 (2d Cir. 2001), aff’d in
part by an equally divided Court and vacated in part on other grounds, 539 U.S.
111 (2003). Those claims were classic backward-looking damages claims, rather
than the claims Objectors are concerned with here—future claims challenging the
legality of actions taken pursuant to a court-approved settlement.19
Finally, the Merchants (at 37) are mistaken in attempting to dismiss Literary
Works, 654 F.3d 242, in which the parties’ settlement released the defendants from
future litigation over subsequent use of certain copyrighted works. The Merchants
contend that the Literary Works release is distinguishable from the one here
because “it permitted class members to (1) opt out of the settlement entirely or (2)
19Charron v. Wiener , 731 F.3d 241 (2d Cir. 2013), cert. denied sub nom. Suarez v.
Charron, 134 S. Ct. 1941 (2014), is similar. Although the court noted that thesettlement did not extinguish claims excluded from its scope, the claims at issuewere already-accrued, backward-looking claims. Id. at 244, 253. It says nothingabout the sort of going forward-based claims implicated here.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 340/512
65
‘opt out of the release for future use’ in particular.” Merchants’ Br. 37 (quoting
654 F.3d at 246–47). But the cited portion of the decision comes from this Court’s
statement of the case, not its analysis. This Court never suggested that there was a
requirement that the settlement permit class members to opt out of the release for
future use in order for (b)(2) certification to be appropriate. Instead, consistent
with Defendants’ showings supra and infra, the court noted the breadth of typical
settlement releases, underscoring that “‘[p]laintiffs in a class action may release
claims that were or could have been pled in exchange for settlement relief,’” and
that “[p]arties often reach broad settlement agreements encompassing claims not
presented in the complaint in order to achieve comprehensive settlement of class
actions, particularly when a defendant’s ability to limit his future liability is an
important factor in his willingness to settle.” 654 F.3d at 247–48 (quoting Wal-
Mart II , 396 F.3d at 106).20
In sum, none of the authorities cited by the Objectors supports their
argument that certification of the (b)(2) settlement class was improper simply
because the class released claims challenging the rules that exist post-settlement.
20In addition to the cases discussed above, Objectors also contend that the
settlement classes certified in this case run afoul of the Supreme Court’s decisions
in Amchem, 521 U.S. 591, and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).Merchants’ Br. 52–66 (cohesion); id. at 66–79 (adequacy). The Class Plaintiffsaptly show why those opinions have no bearing here, see Class Br. § I.D.2, and sowe incorporate that discussion here.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ,: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 341/512
66
II. THE SCOPE OF THE RELEASES PROVIDED BY THE 23(b)(2)
CLASS IS LAWFUL.
In addition to Objectors’ argument that the release here was improperly
implemented through a mandatory 23(b)(2) settlement class, Objectors suggest
that, in all events, the releases were unlawful because they release claims beyond
those presented in this litigation. See, e.g., Merchants’ Br. 31–32, 80–90.
Objectors’ view is wrong. It contravenes decades of settled precedent,
erodes the courts’ longstanding policy of favoring the settlement of disputes—
particularly class disputes—and threatens to overwhelm defendants and courts with
a never-ending stream of litigation.
Contrary to Objectors’ rhetoric, “[i]t is not at all uncommon for settlements
to include a global release of all claims past, present, and future, that the parties
might have brought against each other.” Williams v. Gen. Elec. Capital Auto
Lease, Inc., 159 F.3d 266, 274 (7th Cir. 1998). That is because, “[p]ractically
speaking, ‘[c]lass action settlements simply will not occur if the parties cannot set
definitive limits on defendants’ liability.’” Wal-Mart II , 396 F.3d at 106 (second
alteration in original). Absent the ability to set such limits, defendants “would . . .
face nearly limitless liability from related lawsuits in jurisdictions throughout the
country.” Id.
Judge Gleeson did not abuse his discretion in approving the releases here.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 342/512
67
A. The “Identical Factual Predicate” Doctrine Permits A Broad
Release Of Claims.
The releases are unremarkable and amply supported by this Court’s
decisions. “The law is well established in this Circuit and others that class action
releases may include claims not presented and even those which could not have
been presented as long as the released conduct arises out of the ‘identical factual
predicate’ as the settled conduct.” Wal-Mart II , 396 F.3d at 107 (quoting TBK
Partners, 675 F.2d at 460). Notwithstanding its name, the “identical factual
predicate” doctrine permits a class to release claims “not presented in the
complaint” and those involving events that have not yet occurred. Literary Works,
654 F.3d at 247–48; see, e.g., Wal-Mart II , 396 F.3d at 107, 114 (claims “not
presented and [that] might not have been presentable” can nonetheless be released
(emphasis omitted)); TBK , 675 F.2d at 460–61; Robertson v. NBA, 622 F.2d 34, 35
(2d Cir. 1980) (“ Robertson IV ”).
In Robertson IV , for example, this Court concluded that Wilt Chamberlain’s
suit against the NBA, which challenged the same rule that was the subject of a
prior class action and which had been modified in a prior class settlement, was
precluded by the release in that settlement. 622 F.2d at 35. The mere fact that the
later action challenged the rule’s application at a subsequent time was not
sufficient to remove the release’s binding force under the “identical factual
predicate” doctrine.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 343/512
68
And in Wal-Mart II , this Court found the doctrine satisfied where in the
settled case (containing the release) the plaintiffs had pleaded a tying claim,
alleging “that the exclusionary rules solidified Visa and MasterCard’s power in the
credit card market, enabling [them] to force plaintiffs to accept their debit cards.”
396 F.3d at 107. The plaintiffs raising the arguably released claims, on the other
hand, had brought a Section 1 claim alleging an increase in credit-card transaction
costs. Id. Proving those disparate claims would have required proof of at least
some different facts (relating to the identity and contours of the relevant markets,
the existence and extent of damages, etc.), but the Court held that the doctrine was
satisfied because both cases involved the same central rules. See id. at 108.
Furthermore, the Court held that the doctrine permitted the release of claims
against non-parties to the action. See id. at 108–09.
B. The Releases Here Are Tailored To The “Identical Factual
Predicate” Doctrine.
Judge Gleeson properly recognized that the Releases here are lawful under
the “identical factual predicate” doctrine, because “[t]hey do not release the
defendants from liability for claims based on new rules or new conduct or a
reversion to the pre-settlement rules. They appropriately limit future damages
claims based on the pre-settlement conduct of the networks.” SPA45–SPA46. As
the text of the Releases makes clear, they merely compromise claims:
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 344/512
69
arising out of or relating in any way to any conduct, acts,
transactions, events, occurrences, statements, omissions, orfailures to act of any Rule 23(b)(2) Settlement Class ReleasedParty that are alleged or which could have been alleged fromthe beginning of time to the date of the Court’s entry of theClass Settlement Preliminary Approval Order in any of theOperative Class Complaints or Class Action complaints, or inany amendments to the Operative Class Complaints or ClassAction complaints . . . .
SPA169-SPA170 ¶ 68 (emphasis added). Included are claims related to the
lawfulness of default interchange, SPA170-SPA171 ¶ 68(a), (g), and Honor-all-
Cards, id. ¶ 68(c), (g). See supra § I.A.2.a (discussing those claims and the factors
making it unlikely that plaintiffs would prevail on them).21
What the releases do not affect—contrary to Objectors’ dark predictions—
are claims based on “new” conduct. SPA46. If someday there are harmful rules,
practices, or actions that are not “substantially similar to,” SPA171 ¶ 68(g), those
that were or could have been challenged in this case, the releases facially would
not apply. So, if—hypothetically—Visa or MasterCard were to impose an entirely
21The Merchants cite the Fixed Acquirer Network Fee (“FANF”) as an example of
a “clai[m] beyond the scope of the case” that was released by the (b)(2) settlement.Merchants’ Br. 87–88. But cf. SPA174 ¶ 72(d) (release does not extend to FANF-
based claims for injunctive relief). First, that contention is “waived” because, ashere, “an argument made only in . . . footnote[s] [i]s inadequately raised forappellate review.” Norton v. Sam’s Club, 145 F.3d 114, 117–18 (2d Cir. 1998);
see Home Depot Objection (D.E.2591) 8 n.8; Joint Objection (D.E.2670) 34 n.43.Second, in any event, the point is meritless. Objectors concede that FANF was in
place prior to settlement. Merchants’ Br. 17, 40–41. It thus could have beenlitigated here and—as such—is part of the factual predicate of this case,notwithstanding that (as Objectors note) it was not specifically cited in thecomplaint. See, e.g., Wal-Mart II , 396 F.3d at 107; TBK Partners, 675 F.2d at 460.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;4 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 345/512
70
new rule preventing merchants from steering customers away from paying with
credit cards, or to adopt entirely new, as opposed to “substantially similar,” rules
governing the use of mobile technologies (as Objectors claim to fear), the
lawfulness of those new rules would be fair game for a future antitrust suit.
For the same reason, the Releases do not, as the Merchants contend (Br. 80–
82), effect an improper “waiver of future liability under the federal antitrust
statutes.” In re Am. Express Merchants’ Litig., 634 F.3d 187, 197 (2d Cir. 2011);
see Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 329 (1955). The Merchants
assert: “In Lawlor , 349 U.S. at 328–29, the Supreme Court stated that
‘extinguishing claims which did not even then exist and which could not possibly
have been sued upon in the previous case . . . would in effect confer on
[defendants] a partial immunity from civil liability for future violations.’” Br. 81
(alterations in original) (emphasis added). The Merchants’ quotation of Lawlor is
disingenuous. The “immunity” which Lawlor prevents the parties from agreeing to
is immunity from antitrust liability for new allegedly anticompetitive conduct that
could not have been the subject of the previous suit. Lawlor , 349 U.S. at 328
(discussing post-settlement slow deliveries and allegedly illegal tie-ins). Here, the
release does not bar a future suit challenging any new, post-settlement allegedly
anticompetitive conduct that could not have been the subject of this suit. The
settlement here has precisely the effect that the Supreme Court gave to the
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 346/512
71
settlement in Lawlor . The Court there held that the earlier “judgment precludes
recovery on claims arising prior to its entry, [but] it cannot be given the effect of
extinguishing claims which did not even then exist and which could not possibly
have been sued upon in the previous case.” Id. at 328. That is textbook res
judicata doctrine and says nothing about issue preclusion and does not undermine
the permissible scope of the class-settlement release at issue here.
Even Objectors’ skewed reading of Lawlor , however, does not help them
given the facts here. The releases were limited to claims based on facts that “are
alleged or which could have been alleged ” here. SPA169–SPA170 ¶ 68 (emphasis
added). Having acknowledged this point and the fact that the releases—much like
long-arm statutes designed to be coterminous with the reach of the Due Process
Clause—were drafted only to “releas[e] . . . claims that are or could have been
alleged based on the identical factual predicate of the claims in this case,” SPA45–
SPA46, Judge Gleeson properly recognized that the precise contours of the facially
valid releases is a subject for future cases. SPA47. For example, whether a
particular (presently hypothetical) claim—based on changed network rules, an
evolution in payment or processing technology, or other conduct—falls within this
case’s factual predicate is a determination to be made in that case, not this one. Id.
(“‘substantial similar[ity]’” of rules will be decided in future litigation); see Reyn’s
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 347/512
72
Pasta Bella, 442 F.3d at 748–49 (barring suit based on conclusion that it was based
on identical factual predicate as Wal-Mart II ); Robertson IV , 622 F.2d at 35.
Finally, the release of antitrust claims in this settlement can be overturned
only if Objectors could show, to “‘a legal certainty,’” that the Releases (or some
other facet of the settlement) are unlawful. Robertson v. NBA, 556 F.2d 682, 686
(2d Cir. 1977) (“ Robertson II ”) (emphasis added); see id. (declaring that unless
“the challenged practices have . . . been held to be illegal per se in any previously
decided case,” the settlement may be approved); see also, e.g., Armstrong v. Bd. of
Sch. Dirs., 616 F.2d 305, 319–20 (7th Cir. 1980) (same), overruled on other
grounds by Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998). Here, Objectors
obviously cannot make that showing, for all of the reasons discussed in Section
I.A.2, supra.
III. THE COMPETITORS’ OBJECTIONS ARE EQUALLY MERITLESS.
American Express, First Data, and Discover also appeal the settlement’s
approval. Their challenges fare no better than those of other Objectors, as the
District Court recognized. SPA47. In addition to the Class’s showings that the
Class Representatives adequately represent all absent class members, including
AmEx, First Data, and Discover in their limited capacity as merchant acceptors of
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 348/512
73
Visa and MasterCard branded cards, see Class Br. § I.D,22
Defendants briefly set
forth additional infirmities in AmEx, First Data, and Discover’s arguments.
A. The Competitors’ Claims, As Competitors, Are Not Released.
AmEx and First Data principally claim that the settlement improperly and
unlawfully releases their claims as competitors of the network defendants. AmEx
Br. 25–32; First Data Br. 9–24.23
Those complaints are baseless. As Judge
Gleeson stated, they “seek to make something of nothing,” as the relevant release
language does not purport to release any claims that they may possess as
competitors. SPA47. Instead, as the District Court concluded, “it is sufficiently
clear from both the text and context of the releases that these class members are
releasing only claims that merchants have alleged or could have alleged in this case
in their capacity as merchants.” Id. More specifically, those releases provide that
claims “that are alleged or which could have been alleged” in this action (which
was brought by and on behalf of merchants that accept Visa and MasterCard), are
being released. SPA134 ¶ 33; SPA169–170 ¶ 68; see also D.E.1740-2 at F2–12
(“In general, the settlement will resolve and release all claims made by persons,
22Competitors’ specific requests—AmEx primarily seeks to unwind the settlement,
see Br. 35; Discover seeks specific modifications to exclude it from portions of theagreement, see Br. 6, 50; and First Data principally seeks an opt-out right, see, e.g.,Br. 2—do not materially change the response to their arguments.23
Discover advanced a similar argument below, see Tr. (D.E.6094) 144–45(admitting that it “objected to the release” and that its objections “overlapsubstantially” with First Data and AmEx’s), but shifts course here. See infra
§ III.B.
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 349/512
74
businesses, and other entities that arise from or relate to their capacity as
merchants that accept Visa-Branded Cards and/or MasterCard-Branded Cards in
the United States . . . .”) (emphasis added).24
American Express similarly argues that its inclusion in the class
demonstrates the lack the cohesion required by Rule 23, essentially for two
reasons: First, its interest in competing with Visa and MasterCard requires it to
oppose “discriminatory treatment imposed by merchants (including discriminatory
surcharges)—a position antithetical to the claims being settled by the Rule 23(b)(2)
class.” AmEx Br. 17–18; see also First Data Br. 36–38 (similar). Second, many of
the merchants (and counsel) representing the Class are adverse to American
Express in a parallel antitrust suit, and the settlement here is contrary to AmEx’s
own litigation goals, interests, and strategies in that case. AmEx Br. 18–19.
But those arguments, which merely rehash the competitors’ release-based
contentions, largely miss the point. Although First Data and AmEx do not
24AmEx and First Data assert that the language of the settlement agreement calls
into question the breadth of the releases. See First Data Br. 13–15, 20–23; AmExBr. 25–26. But if there were any question about the agreement’s breadth, it shouldnot be resolved by concluding that the agreement is unambiguously broad, contra
First Data Br. 20–22, given that neither the parties to the agreement nor the DistrictCourt have read the agreement in the manner AmEx and First Data propose.Instead, the proper course would be to resort to parol evidence of the agreement’smeaning and to defer to the parties’ representations below—consistent with the
District Court’s conclusion, SPA47—that “the releases do not bar claims based oninjuries as payment network competitors.” Defs.’ Reply Supp. Final Approval 32(D.E.5937) (emphasis and capitalization omitted); accord Pls.’ Reply Supp. FinalApproval 59 (D.E.5939).
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 350/512
75
primarily do business in their merchant capacities, they nonetheless accept Visa-
and MasterCard-branded cards as modes of payment for services they offer.
AmEx Br. viii; First Data Br. 24. That brings them within this class, and they offer
no basis for concluding that the District Court erred in concluding that the class
representatives and counsel adequately represented them in that capacity, see
Literary Works, 654 F.3d at 249; Class Br. § I.D—much less that it abused its
discretion, Joel A., 218 F.3d at 139.
B. Discover’s Group-Boycott Claim Lacks Merit.
Discover also attacks the settlements, claiming that the “Level Playing
Field” provisions are unlawful group boycotts and impose serious administrative
burdens on any merchant that wishes to accept both Discover and Visa and/or
MasterCard. Discover Br. 5–6, 22–27, 39–49. The challenged provisions ensure
that surcharging of Visa or MasterCard transactions will be permitted only under
the conditions pursuant to which the merchant is allowed to surcharge cards from
networks with more-restrictive surcharging rules. See SPA141 & SPA 148
¶ 42(a)(iv), (c); SPA154–SPA155 &SPA161–SPA162 ¶ 55(a)(iv), (c). Discover’s
arguments lack merit, and, in all events, are insufficient to disturb Judge Gleeson’s
approval decision.
Arguments, as here, that a class settlement enshrines an unlawful agreement
face a high bar at the settlement-approval phase, where the district court’s analysis
!"#$% '()*+,' -./01$23% ''(4 5"6$% ;: '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 351/512
76
of both the pre- and post-settlement status quo is—and must be—less rigorous than
it would be in the context of a full trial on the merits. Robertson II , 556 F.2d at
686 (upholding a settlement approval because challengers failed to demonstrate, to
“‘a legal certainty,’” that the settlement was unlawful); see supra at 30–31 (court
need not fully adjudicate plaintiffs’ claims). Unless “the challenged practices have
. . . been held to be illegal per se in a previously decided case,” there is no error in
approving an otherwise-adequate settlement accord. Robertson II , 556 F.2d at 686
(rejecting claim that “settlement agreement cannot be approved because it
perpetuates . . . ‘classic group boycotts’”).
Here, Discover’s group-boycott claim is doomed by its failure to identify
even a single case in which settlement provisos or contractual terms such as the
Level Playing Field provisions have been deemed a group boycott and held
unlawful per se.
Additionally, Discover’s attack on the “Level Playing Field” provisions as
unfair and unreasonably harmful to it as a third-party, see Discover Br. 39–42, is
unavailing, because those provisions are, at bottom, nothing more than “most
favored nations” clauses. Those clauses ensure merchants cannot use a surcharge
to make paying with a Visa- or MasterCard-branded card more expensive for
consumers than paying with a card from a higher-cost Competitive Card Brand.
Far from being unlawful per se, courts repeatedly have upheld “most favored
!"#$% '()*+,' -./01$23% ''(4 5"6$% :7 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 352/512
77
nations” provisions given their legitimate, competitive features. See, e.g., Blue
Cross & Blue Shield United of Wis. v. Marshfield Clinic, 65 F.3d 1406, 1415 (7th
Cir. 1995); Ocean State Physicians Health Plan, Inc. v. Blue Cross & Blue Shield
of R.I., 883 F.2d 1101, 1102, 1110 (1st Cir. 1989).
Finally, Discover’s protestations regarding the burdensome calculations
required by the “Level Playing Field” provisions ring hollow in light of the fact
that Discover itself maintains an “Equal Treatment Rule” that can operate to “limit
surcharges against Discover where Discover matches or beats the pricing of a rival
that is not surcharged .” Discover Br. 20 (emphasis added). In other words, it
appears that even Discover’s own rules can necessitate an inter-network cost
comparison, which illustrates the point that such comparative exercises are merely
a cost of doing business in the payment card industry. They are hardly a basis for
denying settlement approval, let alone for overturning an already-approved
settlement on abuse-of-discretion review.
!"#$% '()*+,' -./01$23% ''(4 5"6$% :' '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 353/512
78
CONCLUSION
For the foregoing reasons and those set forth by the Class Plaintiffs, the
judgment should be affirmed.
Dated: October 15, 2014.
SIDLEY AUSTIN LLP
By: /s/ Carter G. PhillipsCarter G. Phillips
SIDLEY AUSTIN LLP1501 K Street, NWWashington, DC 20005(202) [email protected]
David F. GrahamRobert N. HochmanOne South Dearborn StreetChicago, IL 60603
Benjamin R. Nagin
Eamon P. JoyceMark D. Taticchi787 Seventh Avenue
New York, NY 10019
Attorneys for Defendants-Appellees
Citigroup Inc., Citibank, N.A., and
Citicorp
!"#$% '()*+,' -./01$23% ''(4 5"6$% :( '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 354/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 355/512
80
MORRISON & FOERSTER LLP
By: /s/ Mark P. Ladner Mark P. Ladner Michael B. Miller 250 West 55th Street
New York, NY 10019(212) [email protected]
Attorneys for Defendants-Appellees
Bank of America, N.A., BA Merchant
Services LLC (f/k/a Defendant National
Processing, Inc.), Bank of AmericaCorporation, and MBNA America Bank,
N.A.
SHEARMAN & STERLING LLP
By: /s/ James P. TallonJames P. Tallon599 Lexington Avenue
New York, NY 10022-6069(212) 848-4000
Attorneys for Defendants-Appellees
Barclays Bank plc (in its individual
capacity and as successor in interest to
Barclays Financial Corp.) and Barclays
Bank Delaware
O’MELVENY & MYERS LLP
By: /s/ Andrew J. FrackmanAndrew J. FrackmanAbby F. RudzinTimes Square Tower 7 Times Square
New York, NY 10036(212) [email protected]
Attorneys for Defendants-Appellees
Capital One Bank(USA), N.A., Capital
One F.S.B., and Capital One Financial
Corp.
K EATING MUETHING & K LEKAMP PLL
By: /s/ Richard L. Creighton, Jr.Richard L. Creighton, Jr.Drew M. HicksOne East Fourth Street, Suite 1400Cincinnati, OH 45202(513) [email protected]
Attorneys for Defendant-Appellee Fifth
Third Bancorp
!"#$% '()*+,' -./01$23% ''(4 5"6$% :* '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 356/512
81
K UTAK R OCK LLP
By: /s/ John P. PassarelliJohn P. PassarelliJames M. SulenticThe Omaha Building1650 Farnam StreetOmaha, NE 68102-2186(402) [email protected]
Attorneys for Defendant-Appellee First
National Bank of Omaha
WILMER CUTLER PICKERING HALE
AND DORR LLP
By: /s/ Ali M. StoeppelwerthAli M. Stoeppelwerth1875 Pennsylvania Avenue, NWWashington, DC 20006(202) [email protected]
Attorneys for Defendants-Appellees
HSBC Finance Corporation, HSBC
North America Holdings Inc., and HSBC Bank USA, N.A.
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP
By: /s/ Peter E. GreenePeter E. GreeneBoris BershteynPeter S. JulianFour Times Square
New York, NY 10036(212) 735-3000
MASSEY & GAIL, LLP
By: /s/ Jonathan S. MasseyJonathan S. MasseyLeonard A. Gail1325 G Street NWSuite 500Washington, DC 20005(202) 652-4511
Attorneys for Defendants-Appellees JPMorgan Chase & Co., JPMorgan Chase
Bank, N.A., Chase Bank USA, N.A., Chase Manhattan Bank USA, N.A., Chase
Paymentech Solutions, LLC, Bank One Corporation, Bank One, Delaware, N.A.,
and J.P. Morgan Chase Bank, N.A. as acquirer of certain assets and liabilities of
Washington Mutual Bank †
† Skadden, Arps, Slate, Meagher & Flom LLP is counsel to the Chase Defendants-Appellees
except as to Objectors-Appellants American Express Co., American Express Travel RelatedServices Company, Inc., American Express Publishing Corp., Serve Virtual Enterprises, Inc.,ANCA 7 LLC d/b/a Vente Privee, USA, AMEX Assurance Company, Accertify, Inc., Wal-Mart,Inc., Alon USA, LP, Amazon.com, Zappos.com, Foot Locker, Inc., and J.C. Penney Corporation,Inc. and related entities.
!"#$% '()*+,' -./01$23% ''(4 5"6$% :9 '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 357/512
82
JONES DAY
By: /s/ Joseph W. Clark John M. MajorasJoseph W. Clark 51 Louisiana Avenue, NWWashington, DC 20001(202) 879-3939
Attorneys for Defendants-Appellees
National City Corporation, National
City Bank of Kentucky
ALSTON & BIRD LLP
By: /s/ Teresa T. Bonder Teresa T. Bonder Valarie C. WilliamsKara F. KennedyOne Atlantic Center 1201 W. Peachtree Street, NWAtlanta, GA 30309(404) [email protected]
Attorneys for Defendants-Appellees
SunTrust Banks, Inc. and SunTrust Bank
PULLMAN & COMLEY, LLC
By: /s/ Jonathan B. OrleansJonathan B. OrleansAdam S. Mocciolo850 Main StreetBridgeport, CT 06601-7006(203) 330-2000
Attorneys for Defendant-Appellee Texas
Independent Bancshares, Inc.
PATTERSON BELKNAP WEBB & TYLER
LLP
By: /s/ Robert P. LoBueRobert P. LoBueWilliam F. Cavanaugh1133 Avenue of the Americas
New York, NY 10036(212) 336-2000
Attorneys for Defendants-Appellees
Wachovia Bank, NA., Wachovia
Corporation, and Wells Fargo
& Company
!"#$% '()*+,' -./01$23% ''(4 5"6$% :+ '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 358/512
83
CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF
APPELLATE PROCEDURE 32(a)
This brief complies with the type-volume limitations of Fed. R. App. P.
32(a)(7)(B) and this Court’s October 12, 2014 order (Docket Entry 1119) granting
Defendants-Appellees’ motion for leave to file an oversized brief of up to 19,000
words because this brief contains 18,351 words (as determined by the Microsoft
Word 2007 word-processing program used to prepare this brief), excluding those
parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
This brief complies with the typeface requirements of Fed. R. of App.
P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this
brief has been prepared in a proportionally spaced typeface using the Microsoft
Word 2007 word-processing program in 14-point Times New Roman font.
/s/ Carter G. Phillips
!"#$% '()*+,' -./01$23% ''(4 5"6$% :, '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 359/512
84
CERTIFICATE OF SERVICE
I hereby certify that on this 15th day of October 2014, I electronically filed
and served the foregoing brief using the CM/ECF System.
/s/ Carter G. Phillips
Carter G. Phillips
!"#$% '()*+,' -./01$23% ''(4 5"6$% :; '78'98(7'* '4*9(:* :;
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 360/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
!"#$%& ($)$%( &#($*#+$ +,!*$
%)($%*" &#($*#+$ ,- "%. /,*077777777777777777777777777777777777777777777777777777777777777777777777 8
") 5,9 .:,5"'.) ,;45,00 .)-"70-,,5")#
51$,0 .)-"-510- $"-"#.-"()
-<=> +?@ABCDE 5CFGEC> -?9 HH7:+7IJJJH K)##L K5,5L
'()0($"+.-,+ '$.00 .'-"()
77777777777777777777777777777777777777777777777777777777777777777777777 8
-!, :.5'10 '(54(5.-"()M
?D NC<GFO ?O =E>CFO GDP GFF >=B=FGQFR >=EAGECP SCQ>?D>M
HT7'67IUTVV K)##L K5,5L
4FG=DE=OOM
7 GWG=D>E 7
.:,5"'.) ,;45,00 '(:4.)% CE GFXM
+COCDPGDE>X
77777777777777777777777777777777777777777777777777777777777777777777777 8
*%12/ &%+2)*)$#," ,- )2)" (3 -*)"0%24 153&3
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ & 2A 78 ?"@$B1 C' ,>88D
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 361/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
63 #"$*,&!+$#," )"& ,7%*7#%. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX H
HXHX :R .DGFR>=> ?O .BCQ=@GD ,8SQC>>Y> )+4 GDP E<C .WQCCBCDE XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXX H
HXJX 4Q?OC>>?Q 0E=WF=EZY> +C@FGQGE=?D XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXX T
HXTX 4Q?OC>>?Q !GA>BGDY> 5CS?QE XXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX [
83 %+,",9#+ +,"$%:$ ,- $5% );*%%9%"$ XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX U
JXHX -<C "D@QCBCDEGF 5CO?QB ?O .DE=70ECCQ=DW 5AFC> XXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX U
JXJX -<C .WQCCBCDE !"#$%&'"($) '?BSCE=E=?D 5CFGE=\C E? E<C 0EGEA> ]A? XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX HI
JXTX -<C 4Q?>SC@E> O?Q *AQE<CQ '?BSCE=E=\C 5CO?QB GDP E<C 5CG>?DGNFCDC>> ?O E<C 0CEEFCBCDE XXXX H[
<3 9)*0%$ &%-#"#$#,"4 9)*0%$ 1,.%*4 )"& ($%%*#"; #" +,91%$#$#7% 9)*0%$( XXXXXXXXXXXXXXXXXXXX HV
TXHX :GQ^CE +CO=D=E=?D XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXX HV
TXJX :GQ^CE 4?_CQ XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXX H`
TXTX 0ECCQ=DW =D '?BSCE=E=\C :GQ^CE> XXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXXXXXXXXXXX XXXXXX H`
=3 1*,-%((,*( ($#;2#$> );*%%( .#$5 %)+5 %2%9%"$ ,- 9/ %+,",9#+ )")2/(#( )"&
1*,-%((,* 5)!(9)"?( +*#$#+#(9( 5%*% )*% !"1%*(!)(#7% )"& #"+,"(#($%"$ .#$5
5#( %)*2#%* 1,(#$#,"(XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX H`
[XHX 'QCP=E 'GQP> GQC 0AN>EGDE=GFFR :?QC '?>EFR E? :CQ@<GDE> -<GD (E<CQ 4GRBCDE :CE<?P>M
"D@FAP=DW +CN=E 'GQP> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX JI
[XJX .E E<C $C\CF ?O 'QCP=E 'GQP *CC> 4QC\G=F=DW =D E<C 1D=ECP 0EGEC>M :GDR :CQ@<GDE> GQC
$=^CFR E? 0AQ@<GQWC 'QCP=E 'GQP -QGD>G@E=?D> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX JH[XJXHX :R 6=C_> .N?AE E<C $=^CF=<??P E<GE :CQ@<GDE> a=FF 0AQ@<GQWC 'QCP=E 'GQP
-QGD>G@E=?D> !G\C )?E '<GDWCP XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX JH
[XJXJX -<C ,\=PCD@C *Q?B .A>EQGF=G 0ASS?QE> G '?D@FA>=?D E<GE :GDR :CQ@<GDE> a=FF
0AQ@<GQWC 'QCP=E 'GQP -QGD>G@E=?D> =D E<C 1D=ECP 0EGEC> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX JT
[XJXTX 0AQ@<GQW=DW => :?QC $=^CFR =D E<C 1D=ECP 0EGEC> E<GD =D .A>EQGF=G ?Q E<C 1XbX GE 'AQQCDE
$C\CF> ?O :CQ@<GDE *CC>XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX JU
[XTX 0AQ@<GQW=DW 4CQB=E> :CQ@<GDE> E? 5C@?AS E<C '?>E ?O 'QCP=E 'GQP 4GRBCDE> +=QC@EFR *Q?B
'A>E?BCQ> a<? 1>C 'QCP=E 'GQP> GDP 4?>E $?_CQ 0<CFO 4Q=@C> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Jc
[X[X :GDR 'A>E?BCQ> a=FF 5CG@E E? 'QCP=E 'GQP 0AQ@<GQWC> NR 1>=DW $?_CQ '?>E .FECQDGE=\C> GE
:CQ@<GDE> E<GE 0AQ@<GQWCM 5CPA@=DW '?>E> GDP 4Q=@C> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX J`
[X[XHX )GQQ?_ 5CFC\GDE :GQ^CE> +? )?E "BSFR -<GE 'QCP=E 'GQP 0AQ@<GQWC> 'GDD?E 0<=OE
-QGD>G@E=?D 6?FABC E? +CN=E 'GQP> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX J`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ , 2A 78 ?"@$B1 C' ,>88<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 362/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
[X[XJX 4Q?OC>>?Q> 0E=WF=EZ GDP !GA>BGD !G\C .WQCCP E<GE 'QCP=E 'GQP 0AQ@<GQWC> 0<=OE 0?BC
'QCP=E 'GQP -QGD>G@E=?D> E? +CN=E 'GQP> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX TJ
[X[XTX . 5C@CDE (DC7%CGQ '<GDWC =D 'QCP=E GDP +CN=E 'GQP 6?FABC =D .A>EQGF=G +?C> )?E
+=>SQ?\C -<C 1>COAFDC>> ?O 0AQ@<GQWC> GE 0ECCQ=DW E? +CN=E XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Td
[XVX -<C -<QCGE E? )CE_?Q^> ?O $?>E -QGD>G@E=?D 6?FABC *Q?B 'QCP=E 'GQP 0AQ@<GQWC> a=FF
#CDCQGEC G 4QC\=?A>FR 0ASSQC>>CP '?BSCE=E=\C '?D>EQG=DE ?D E<C $C\CF ?O 'QCP=E 'GQP
:CQ@<GDE *CC> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX T`
[XVXHX )CE_?Q^> $?>C :?QC -QGD>G@E=?D> G> :CQ@<GDE *CC> "D@QCG>C =O :CQ@<GDE> 'GD
0AQ@<GQWC -<GD "O :CQ@<GDE> 'GDD?E 0AQ@<GQWC XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX T`
[XVXJX 0AQ@<GQW=DW "DECD>=O=C> '?D>EQG=DE> ?D :CQ@<GDE *CC> 5CFGE=\C E? E<C 0EGEA> ]A? ,\CD
=O 1D=O?QB .@Q?>> 2QGDP> XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [H
[XVXTX 4Q?OC>>?Q !GA>BGD => "D@?QQC@E =D !=> 'FG=B E<GE 0AQ@<GQW=DW !G> )?E 'GA>CP G
5CPA@E=?D =D .BCQ=@GD ,8SQC>>Y> :CQ@<GDE *CC> =D .A>EQGF=G XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [T
[XdX -<C .WQCCBCDE 2CDCO=E> :CQ@<GDE> a=E< 5C>SC@E E? .FF 'AQQCDE 'QCP=E 'GQP 1>GWCM )?E
(DFR .BCQ=@GD ,8SQC>> 'GQP 1>GWC XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [U
@3 ($)$% *%($*#+$#,"( XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [c
A3 +,"+2!(#," XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8 2A 78 ?"@$B1 C' ,>88E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 363/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
63 #"$*,&!+$#," )"& ,7%*7#%.
6363 9B )CDEBFGF HI )JKLGMDC %NOLKFF?F "&1 DCP QRK )SLKKJKCQ
HX
(D .SQ=F HIM JIH[M " >ANB=EECP G PC@FGQGE=?D Ke*QGD^CF +C@FGQGE=?DfL @?D@CQD=DW
E<C SQ?S?>CP @FG>> >CEEFCBCDE Ke.WQCCBCDEfL =D E<=> F=E=WGE=?D NCE_CCD .BCQ=@GD ,8SQC>> GDP G
>CEEFCBCDE @FG>> @?D>=>E=DW ?O E<C B=FF=?D> ?O 1X0X BCQ@<GDE> E<GE G@@CSE .BCQ=@GD ,8SQC>>
@GQP>M ADPCQ _<=@< .BCQ=@GD ,8SQC>> _?AFP SGQE=GFFR QCFG8 =E> eD?D7P=>@Q=B=DGE=?D S?F=@Rf
Ke)+4fLXH -<C .WQCCBCDE O?FF?_> >CEEFCBCDE> QCG@<CP NCE_CCD G >=B=FGQ @FG>> ?O BCQ@<GDE>
GDP :G>ECQ'GQP GDP 6=>G =D :+$7HUJI ADPCQ _<=@< BCQ@<GDE> ?NEG=DCP E<C GN=F=ER E? >AQ@<GQWC
:G>ECQ'GQP GDP 6=>G @QCP=E @GQP EQGD>G@E=?D>M _=E< @CQEG=D QC>EQ=@E=?D> =D@FAP=DW F=D^GWC E? E<C
BCQ@<GDE>Y GN=F=ER E? >AQ@<GQWC .BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D> K=O E<C BCQ@<GDE G@@CSE>
.BCQ=@GD ,8SQC>> @GQP> GDP E<CR GQC B?QC @?>EFR E<GD :G>ECQ'GQP ?Q 6=>G @QCP=E @GQP>LX
JX .BCQ=@GD ,8SQC>>Y> )+4 @AQQCDEFR SQ?<=N=E> G BCQ@<GDE OQ?B >AQ@<GQW=DW
.BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D> ADFC>> E<C BCQ@<GDE >AQ@<GQWC> GFF ?E<CQ @GQP EQGD>G@E=?D>M
=D@FAP=DW E<?>C A>=DW PCN=E @GQP>M NR GE FCG>E G> BA@< G> E<C BCQ@<GDE >AQ@<GQWC> .BCQ=@GD
,8SQC>> @GQP EQGD>G@E=?D>X 2AE :G>ECQ'GQP GDP 6=>G SQ?<=N=E >AQ@<GQW=DW ?O E<C=Q PCN=E @GQP>
KGDP BCQ@<GDE> WCDCQGFFR _?AFP D?E _GDE E? >AQ@<GQWC PCN=E @GQP>M _<=@< GQC F?_CQ @?>E GDP
E<C A>C ?O _<=@< BCQ@<GDE> _=>< E? CD@?AQGWCLM >? BCQ@<GDE> E<GE G@@CSE .BCQ=@GD ,8SQC>>
@GQP> WCDCQGFFR @GDD?E >AQ@<GQWC GDR @QCP=E @GQP>X -<C .WQCCBCDE _?AFP SCQB=E BCQ@<GDE> E?
>AQ@<GQWC .BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D> >? F?DW G> E<C BCQ@<GDE >AQ@<GQWC> GFF *%$+",
@GQP> NR GE FCG>E G> BA@< / =XCXM E<C QCgA=QCBCDE E<GE PCN=E @GQP> GF>? NC >AQ@<GQWCP =D ?QPCQ E?
H +C@FGQGE=?D ?O .FGD 0X *QGD^CFM 4<X+XM .SQ=F HIM JIH[ Ke*QGD^CF +C@FGQGE=?DfLX :R gAGF=O=@GE=?D> GQC PC>@Q=NCP =D
E<C *QGD^CF +C@FGQGE=?DX :R ASPGECP '6 => GEEG@<CP =D .SSCDP=8 .X
H
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ > 2A 78 ?"@$B1 C' ,>88F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 364/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
>AQ@<GQWC .BCQ=@GD ,8SQC>> @GQP> _=FF NC QCB?\CPXJ :CQ@<GDE> >E=FF _=FF NC SQ?<=N=ECP OQ?B
>AQ@<GQW=DW .BCQ=@GD ,8SQC>> NAE D?E ?E<CQ @QCP=E @GQP> ?Q >CEE=DW G <=W<CQ >AQ@<GQWC O?Q
.BCQ=@GD ,8SQC>> @GQP> E<GD O?Q ?E<CQ @QCP=E @GQP>X " QCOCQ E? E<=> @?DE=DACP .BCQ=@GD ,8SQC>>
QC>EQ=@E=?D G> =E> eD?7P=OOCQCDE=GF >AQ@<GQWCf ?Q e)+0f S?F=@RX
TX " @?D@FAPCP E<GE ehGiFE<?AW< OAQE<CQ F=NCQGF=ZGE=?D h?O .BCQ=@GD ,8SQC>>Y> )+4i
_?AFP NCDCO=E BCQ@<GDE>M E<C QCF=CO ?NEG=DCP =D E<C .WQCCBCDE _=FF >=WD=O=@GDEFR NCDCO=E
BCQ@<GDE> E<Q?AW<?AE E<C 1D=ECP 0EGEC>XfT " NG>CP BR @?D@FA>=?D ?D G >EQG=W<EO?Q_GQP
C@?D?B=@ GDGFR>=> NA=FE ?D E<C O?FF?_=DW F?W=@GF >ECS> GDP >ASS?QECP NR E<C G\G=FGNFC C\=PCD@CX
+=OOCQCDE=GF SQ=@=DW ?Q SQ?B?E=?D GE QCEG=F => G SQ=D@=SGF BC@<GD=>B NR _<=@<
@?BSCE=E=?D NCE_CCD BCQ@<GDE>Y >ASSF=CQ> ?@@AQ>X[ 4GRBCDE @GQP DCE_?Q^> F=^C
.BCQ=@GD ,8SQC>> <G\C A>CP GDE=7>ECCQ=DW QAFC> E? >ASSQC>> E<=> NG>=@
@?BSCE=E=\C SQ?@C>> _=E< QC>SC@E E? E<C DCE_?Q^>Y @GQP G@@CSEGD@C >CQ\=@C>
SQ?\=PCP E? GDP SG=P O?Q NR BCQ@<GDE>XV .DE=7>ECCQ=DW QAFC> GQC A>CP NR @GQP
SGRBCDE DCE_?Q^> E? QC>EQ=@E @?BSCE=E=?DM CD<GD@C BGQ^CE S?_CQM GDP BG=DEG=D
GDE=@?BSCE=E=\CFR <=W< BCQ@<GDE OCC>Xd
.E E<C FC\CF ?O @QCP=E @GQP OCC> SQC\G=F=DW =D E<C 1D=ECP 0EGEC>M BGDR BCQ@<GDE>
GQC F=^CFR E? >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D>XU
0AQ@<GQW=DW SCQB=E> BCQ@<GDE> E? QC@?AS E<C @?>E ?O @QCP=E @GQP SGRBCDE>P=QC@EFR OQ?B @A>E?BCQ> _<? A>C @QCP=E @GQP> GDP >CE F?_CQ S?>ECP SQ=@C>Xc
0AQ@<GQW=DW @QCP=E @GQP EQGD>G@E=?D> _=FF =DPA@C BGDR @A>E?BCQ> E? A>C
GFECQDGE=\C>M C>SC@=GFFR PCN=E @GQP>M _<=@< P=QC@EFR QCPA@C> BCQ@<GDE @?>E>X`
J 1DPCQ E<C ECQB> ?O E<C .WQCCBCDEM .BCQ=@GD ,8SQC>> GF>? BGR F=B=E E<C GB?ADE ?O G BCQ@<GDE >AQ@<GQWC E?
E<C GB?ADE E<GE E<C BCQ@<GDE SGR> E? .BCQ=@GD ,8SQC>> E? G@@CSE E<C @GQP EQGD>G@E=?DX 'FG>> 0CEEFCBCDE
.WQCCBCDEM 3GDAGQR UM JIH[ Ke.WQCCBCDEfLM SX JHXT *QGD^CF +C@FGQGE=?DM jU[X[ *QGD^CF +C@FGQGE=?DM jJJXV *QGD^CF +C@FGQGE=?DM jJ[X
d *QGD^CF +C@FGQGE=?DM jU[XU *QGD^CF +C@FGQGE=?DM 4GQE TXJXc *QGD^CF +C@FGQGE=?DM 4GQE TXTX` *QGD^CF +C@FGQGE=?DM jJ[ GDP 4GQE TX[X
J
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 7 2A 78 ?"@$B1 C' ,>8>+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 365/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
-<C E<QCGE E? DCE_?Q^> ?O F?>E EQGD>G@E=?D \?FABC OQ?B @QCP=E @GQP >AQ@<GQWC>
_=FF WCDCQGEC G SQC\=?A>FR >ASSQC>>CP @?BSCE=E=\C @?D>EQG=DE ?D E<C FC\CF ?O @QCP=E @GQP BCQ@<GDE OCC>XHI
-<C =D@QCG>CP SQC\GFCD@C ?O @QCP=E @GQP >AQ@<GQW=DW _=FF ECDP E? ><=OE WCDCQGF
SGRBCDE SQCOCQCD@C> GDP SGEECQD> E?_GQP> PCN=E @GQP A>C GE GFF BCQ@<GDE>M
_<CE<CQ E<CR >AQ@<GQWC ?Q D?EXHH
0EGEAEC> E<GE BGR QC>EQ=@E E<C GN=F=ER E? >AQ@<GQWC =D >?BC >EGEC> BGR QCPA@CM NAE
D?E CF=B=DGECM E<C \GFAC ?O E<C Q=W<E E? >AQ@<GQWC GFF @QCP=E @GQP> ADPCQ DCE_?Q^
QAFC>XHJ
.BCQ=@GD ,8SQC>>Y> )+4 >=WD=O=@GDEFR QCPA@C> E<C DABNCQ ?O BCQ@<GDE> E<GE @GD
C@?D?B=@GFFR >AQ@<GQWC GDR @QCP=E @GQP EQGD>G@E=?D> C\CD GOECQ E<C :+$7HUJI
0CEEFCBCDE>M >? E<GE E<C C@?D?B=@GFFR QCFC\GDE NCDCO=E> OQ?B E<C .WQCCBCDEC8ECDP NCR?DP QCPA@E=?D> =D @?>E> @AQQCDEFR =D@AQQCP E? SQ?@C>> .BCQ=@GD
,8SQC>> EQGD>G@E=?D>M NR SCQB=EE=DW BCQ@<GDE> B?QC COOC@E=\CFR E? QCPA@C GFF ?O
E<C=Q @QCP=E @GQP EQGD>G@E=?D> GDP OCC>XHT
6383
1LHIKFFHL (QGSEGQT?F &KMEDLDQGHC
[X 4Q?OC>>?Q 3?>CS< 0E=WF=EZ <G> >ANB=EECP G PC@FGQGE=?D ?D NC<GFO ?O G WQ?AS ?O
BGk?Q >ASCQBGQ^CE GDP PQAW >E?QC BCQ@<GDE> Ke"DP=\=PAGF :CQ@<GDE 4FG=DE=OO>fL E<GE ?NkC@E E?
E<C .WQCCBCDE GDP _<=@< GQC @AQQCDEFR CDWGWCP =D F=E=WGE=?D _=E< .BCQ=@GD ,8SQC>> ?\CQ =E>
)+4 KGDP _<=@< SQC\=?A>FR F=E=WGECP >=B=FGQ =>>AC> GWG=D>E :G>ECQ'GQP GDP 6=>G =D :+$7HUJILX
VX 4Q?OC>>?Q 0E=WF=EZ DC=E<CQ GPPQC>>C> D?Q P=>SAEC> GDR ?O E<C CFCBCDE> ?O BR
GDGFR>=> E<GE ><?_ E<GE BCQ@<GDE> _=FF NCDCO=E OQ?B E<C GN=F=ER E? >AQ@<GQWC GFF @QCP=E @GQP
EQGD>G@E=?D> _=E<?AE >AQ@<GQW=DW PCN=E @GQP EQGD>G@E=?D>X 4Q?OC>>?Q 0E=WF=EZY> ?S=D=?D> GN?AE
HI *QGD^CF +C@FGQGE=?DM 4GQE TXVX 4Q?OC>>?Q !GA>BGD ?PPFR >EGEC>M e+QX *QGD^CF BG^C> D? @FG=B> E<GE E<C
>CEEFCBCDE _=FF FCGP E? QCPA@CP .:,; BCQ@<GDE OCC>Xf 5CS?QE ?O 4Q?OC>>?Q 3CQQR !GA>BGDM 3ADC dM JIH[
Ke!GA>BGD 5CS?QEfLM j` KGE SX ULX 2AE " P? NCF=C\C E<GE E<C >CEEFCBCDE _=FF FCGP E? QCPA@CP OCC> NR GFF ?O E<C
@QCP=E @GQP DCE_?Q^>M =D@FAP=DW .BCQ=@GD ,8SQC>>M G> " >EGECP =D BR =D=E=GF PC@FGQGE=?DX *QGD^CF +C@FGQGE=?DM
jjHVM J[M VcM dVM GDP 4Q?OC>>?Q !GA>BGD CF>C_<CQC @=EC> BR @?D@FA>=?D E? E<GE COOC@E K!GA>BGD 5CS?QEM j`
KGE SX VLM jj[[M VU KGDP P=>GWQCC> _=E< BR @?D@FA>=?DLLXHH *QGD^CF +C@FGQGE=?DM jjHVM J[XHJ *QGD^CF +C@FGQGE=?DM 4GQE [XJXHT *QGD^CF +C@FGQGE=?DM 4GQE TXdX
T
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ D 2A 78 ?"@$B1 C' ,>8>&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 366/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
@?BSCE=E=?D =D @GQP SGRBCDE >R>ECB> GDP E<C GDE=@?BSCE=E=\C COOC@E> ?O GDE=7>ECCQ=DW QAFC>M
_<=@< <C <G> PC>@Q=NCP =D <=> SQC\=?A> QCS?QE>M GQC \CQR >=B=FGQ E? BR ?_DM GDP ><?AFP FCGP <=B
E? GWQCC _=E< BC E<GE E<C GN=F=ER E? >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> => \GFAGNFC E? BCQ@<GDE>
GDP E? E<C SANF=@X
dX "D <=> PC@FGQGE=?DM 4Q?OC>>?Q 0E=WF=EZ O?@A>C> =D>ECGP ?D >?BC CFCBCDE> ?O E<C
.WQCCBCDE / >A@< G> .BCQ=@GD ,8SQC>>Y> GN=F=ER E? @?DE=DAC CDO?Q@=DW =E> )+0 S?F=@R / _<=@< <C
@?DECDP> @GA>C E<C .WQCCBCDE E? <GQB BCQ@<GDE>X .> " C8SFG=DM <?_C\CQM 4Q?OC>>?Q 0E=WF=EZ =>
?DFR @?QQC@E =O E<C GFECQDGE=\C E? E<C .WQCCBCDE => G>>ABCP E? NC NCEECQM B?QC \GFAGNFC QCF=COM
D?E E<C >EGEA> gA?X . >CEEFCBCDE => =D\GQ=GNFR G @?BSQ?B=>CM <?_C\CQM GDP " P? D?E C\GFAGEC
E<C .WQCCBCDE QCFGE=\C E? QCF=CO E<GE " NCF=C\C _?AFP B?>E OAFFR BG^C E<C BGQ^CE @?BSCE=E=\CM
QGE<CQ " C\GFAGEC =E QCFGE=\C E? E<C >EGEA> gA? =D PCECQB=D=DW E<GE E<C .WQCCBCDE NCDCO=E> 1X0X
BCQ@<GDE>X
63<3 1LHIKFFHL 5DUFJDC?F *KOHLQ
UX 4Q?OC>>?Q 3CQQR !GA>BGD <G> >ANB=EECP G QCS?QE ?D NC<GFO ?O G WQ?AS ?O [H ?E<CQ
BCQ@<GDE> GDP BCQ@<GDE WQ?AS> Ke'?D>EGDE=DC 'GDD?D (NkC@E?Q>fL E<GE ?NkC@E E? E<C
.WQCCBCDEX
cX
4Q?OC>>?Q !GA>BGD GDP " GWQCC GN?AE BGDR ?O E<C @?BSCE=E=\C C@?D?B=@
OCGEAQC> ?O E<C SGRBCDE @GQP BGQ^CESFG@CM NAE <C P=>GWQCC> _=E< BR @?D@FA>=?D E<GE E<C GN=F=ER
E? >AQ@<GQWC @QCP=E @GQP> _=E<?AE >AQ@<GQW=DW PCN=E @GQP> ADPCQ E<C ECQB> ?O E<C .WQCCBCDE
_=FF NCDCO=E 1X0X BCQ@<GDE>X 4Q?OC>>?Q !GA>BGD C8SFG=D> _<R .BCQ=@GD ,8SQC>> S?>>C>>C>
>=WD=O=@GDE BGQ^CE S?_CQM NAE <C DC=E<CQ ?OOCQ> G P=GWD?>=> ?O GDR *-.+/*, <C NCF=C\C> .BCQ=@GD
,8SQC>> <G> CDWGWCP =D E<GE <G> <GP >=WD=O=@GDE GDE=@?BSCE=E=\C COOC@E> =D E<C 1D=ECP 0EGEC> D?Q
[
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ < 2A 78 ?"@$B1 C' ,>8>,
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 367/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
SQC>@Q=NC> GDR QCF=CO _<=@< B=W<E QCPA@C ?Q CF=B=DGEC .BCQ=@GD ,8SQC>>Y> BGQ^CE S?_CQX "D
OG@EM =E => AD@FCGQ _<CE<CQ 4Q?OC>>?Q !GA>BGDY> ?S=D=?D>M =O G@@CSECPM @?AFP C\CD NC @?D>=>ECDE
_=E< BCQ@<GDE> >A@@CCP=DW =D GD GDE=EQA>E @G>C GWG=D>E .BCQ=@GD ,8SQC>>X
`X -? C8SFG=DM =D :+$7HUJIM 4Q?OC>>?Q !GA>BGD @?DECDPCP E<GE eh>iAQ@<GQW=DW _=FF
D?E CF=B=DGEC ?Q P=>@=SF=DC E<C BGQ^CE S?_CQ C8CQ@=>CP NR 6=>G GDP :G>ECQ'GQPXfH[ "D E<GE @G>C
GDP =D <=> QCS?QE <CQC <C @?DECDP> E<GE >AQ@<GQW=DW / C\CD P=OOCQCDE=GF >AQ@<GQW=DW ?O .BCQ=@GD
,8SQC>> @GQP> / <G> <GP .- $11$*, ?D E<C FC\CF ?O .BCQ=@GD ,8SQC>> BCQ@<GDE OCC> =D .A>EQGF=GM
_<CQC >AQ@<GQW=DW GDP P=OOCQCDE=GF >AQ@<GQW=DW <G\C NCCD @?BB?DM GDP <C @FG=B> E<GE G OGQ
F?_CQ ><GQC ?O 1X0X BCQ@<GDE> GQC F=^CFR C\CD E? EQR >AQ@<GQW=DW @GQP EQGD>G@E=?D> =D E<C 1D=ECP
0EGEC>X -<A>M F?W=@GFFRM 4Q?OC>>?Q !GA>BGD @GDD?E GQWAC E<GE E<C @?DE=DACP .BCQ=@GD ,8SQC>>
)+0 S?F=@R => @?DPA@E E<GE <G> G >=WD=O=@GDE GDE=@?BSCE=E=\C COOC@E NR SQC\CDE=DW @?BSCE=E=?D
OQ?B QCPA@=DW .BCQ=@GD ,8SQC>>Y> BGQ^CE S?_CQX
HIX 4Q?OC>>?Q !GA>BGD @QCP=E> E<C PC@F=DC =D .BCQ=@GD ,8SQC>> OCC> =D .A>EQGF=G
C8@FA>=\CFR E? BCQ@<GDE>Y GN=F=ER E<CQC E? P=>@?DE=DAC G@@CSEGD@C ?O .BCQ=@GD ,8SQC>> @GQP>
K_<=@< <C >GR> BCQ@<GDE> GQC FC>> GNFC E? P? =D E<C 1D=ECP 0EGEC>L @?ASFCP _=E< QCWAFGE?QR7
BGDPGECP QCPA@E=?D> =D :G>ECQ'GQP GDP 6=>G =DECQ@<GDWC OCC> / .-, E? >AQ@<GQW=DW ?O .BCQ=@GD
,8SQC>> @GQP>XHV 2AE QCF=CO E<GE _?AFP O?Q@C :G>ECQ'GQP GDP 6=>G E? QCPA@C E<C=Q @QCP=E @GQP
=DECQ@<GDWC OCC> => ADG\G=FGNFC =D G @G>C NC=DW F=E=WGECP GWG=D>E .BCQ=@GD ,8SQC>> KGDP .BCQ=@GD
,8SQC>> =E>CFO => G >=DWFC @?QS?QGEC CDE=ERM GDP D?E ?DC @QCGECP NR GD G>>?@=GE=?D ?O NGD^> E<GE
?E<CQ_=>C @?BSCECLX .BCQ=@GD ,8SQC>> P?C> D?E SCQB=E ?SCD @?BSCE=E=?D GB?DW G@gA=Q=DW
H[ 5CS?QE ?O 4Q?OC>>?Q 3CQQR !GA>BGDM "D QC 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE +=>@?ADE .DE=EQA>E
$=E=WGE=?DM :GR JcM JIHT Ke!GA>BGD :+$7HUJI 5CS?QEfLM jHIXHV !GA>BGD :+$7HUJI 5CS?QEM jjJ[M dV7UHX
V
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ E 2A 78 ?"@$B1 C' ,>8>8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 368/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
NGD^> E? >CE E<C FC\CF ?O .BCQ=@GD ,8SQC>> BCQ@<GDE OCC> KGDP ADF=^C :G>ECQ'GQP GDP 6=>GM
.BCQ=@GD ,8SQC>> @GD @?DEQ?F E<C SQ=@=DW ?O GFF ?O =E> BCQ@<GDE GWQCCBCDE> _=E<?AE GDR C8SF=@=E
=DECQ@<GDWC OCC >R>ECBLX
HHX 4Q?OC>>?Q !GA>BGD GQWACP =D :+$7HUJI E<GE ehBi?QC C8ECD>=\C QCO?QB _<=@<
CF=B=DGEC> E<C !?D?Q .FF 'GQP> K!.'LM !?D?Q .FF ">>ACQ> K!."LM GDP D? NRSG>> QAFC> ") .$*$))&%2
,- *-.),%&". E<C >ASQG7@?BSCE=E=\C =DECQ@<GDWC OCC>f ?O :G>ECQ'GQP GDP 6=>GX Hd !C GF>?
=PCDE=O=CP ePCOGAFE =DECQ@<GDWC OCC >@<CPAFC>f / OCC> :G>ECQ'GQP GDP 6=>G BGDPGEC OF?_ OQ?B
E<C BCQ@<GDEY> NGD^ E? E<C @GQP =>>A=DW NGD^ / G> G eQC>EQ=@E=\C SQG@E=@Cf ?O E<?>C DCE_?Q^>X
:GDR =DP=\=PAGF NGD^> =>>AC :G>ECQ'GQP GDP 6=>G @QCP=E @GQP>M GDP 4Q?OC>>?Q !GA>BGD GQWACP
E<GE =O BCQ@<GDE> @?AFP DCW?E=GEC _=E< =DP=\=PAGF BCBNCQ NGD^> ?O :G>ECQ'GQP ?Q 6=>G ?\CQ E<C
ECQB> ?O G@@CSEGD@C ?O @QCP=E @GQP> =>>ACP NR E<?>C =DP=\=PAGF NGD^>M E<CD E<C BCQ@<GDE> _?AFP
NC GNFC E? @?ADECQ E<C BGQ^CE S?_CQ ?E<CQ_=>C C8CQ@=>CP NR :G>ECQ'GQP GDP 6=>G ?D NC<GFO ?O
E<CB>CF\C> GDP E<C=Q BCBNCQ NGD^> @?FFC@E=\CFRX 2AEM GFE<?AW< .BCQ=@GD ,8SQC>> <G> CDF=>ECP
>?BC 1X0X NGD^> E? A>C .BCQ=@GD ,8SQC>> NQGDPCP @GQP>M =E @?DE=DAC> E? @?DEQ?F E<C BCQ@<GDE
>=PC ?O =E> DCE_?Q^ GDP E<C BGk?Q=ER ?O .BCQ=@GD ,8SQC>> @GQP =>>A=DW \?FABC =DECQDGFFRXHU
HJX "D ><?QEM _<=FC 4Q?OC>>?Q !GA>BGD @G>E> P?ANE ?D E<C \GFAC E? BCQ@<GDE> ?O E<C
QCF=CO SQ?\=PCP NR E<C .WQCCBCDEM <C P?C> D?E ?OOCQ E<C SQ?>SC@E E<GE GDE=EQA>E F=E=WGE=?D GWG=D>E
.BCQ=@GD ,8SQC>> ><?AFP SQ?PA@C G NCEECQ QC>AFE K?Q GDR S?>=E=\C QC>AFEL O?Q BCQ@<GDE>X
!?_C\CQM <C => =D@?QQC@E GN?AE E<C \GFAC ?O E<C GN=F=ER O?Q BCQ@<GDE> E? >AQ@<GQWC G> SQ?\=PCP
O?Q NR E<C .WQCCBCDEM G> " _=FF P=>@A>> OAQE<CQ NCF?_X
Hd !GA>BGD :+$7HUJI 5CS?QEM jHI KCBS<G>=> GPPCPLXHU e)? NRSG>> QAFC>f QCOCQ E? 6=>G QC>EQ=@E=?D> ?D BCQ@<GDE> GDP NGD^> A>=DW GD GFECQDGE=\C E? 6=>G E? SQ?\=PC
GAE<?Q=ZGE=?DM @FCGQ=DWM GDP >CEEFCBCDE >CQ\=@C> =D =DECQNGD^ 6=>G @GQP EQGD>G@E=?D>X -<CQC => D? GDGF?WAC =D
E<C .BCQ=@GD ,8SQC>> DCE_?Q^ NC@GA>C .BCQ=@GD ,8SQC>> => SQCP?B=DGDEFR G AD=EGQR ?QWGD=ZGE=?DX
d
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ F 2A 78 ?"@$B1 C' ,>8>>
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 369/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
83 %+,",9#+ +,"$%:$ ,- $5% );*%%9%"$
8363 $RK #CMLKJKCQDE *KIHLJ HI )CQGV(QKKLGCS *UEKF
HTX
-<C )+4 => .BCQ=@GD ,8SQC>>Y> \CQ>=?D ?O GDE=7>ECCQ=DW QAFC> / QCgA=QCBCDE>
_<=@< =BSCPC ?Q SQ?<=N=E BCQ@<GDE> OQ?B P=>@?AQGW=DW E<C=Q @A>E?BCQ>Y A>C ?O G B?QC @?>EFR
SGRBCDE BCE<?P K><?QE ?O P=>@?DE=DA=DW G@@CSEGD@C ?O E<GE BCE<?PL ?Q CD@?AQGW=DW E<C A>C ?O
FC>> @?>EFR SGRBCDE BCE<?P>X "D BR =D=E=GF PC@FGQGE=?D KG> =D BR SANF=><CP QC>CGQ@<LM "
C8SFG=DCP E<GE GDE=7>ECCQ=DW QAFC> <G\C <GP GDE=@?BSCE=E=\C COOC@E>X
h'iGQP DCE_?Q^> A>C GDE=7>ECCQ=DW QAFC> KC>SC@=GFFR D?7>AQ@<GQWC QAFC>L E?QC>EQ=@E @?BSCE=E=?DM CD<GD@C BGQ^CE S?_CQM GDP BG=DEG=D
GDE=@?BSCE=E=\CFR <=W< BCQ@<GDE OCC>X "D BR \=C_M BCQ@<GDE> ><?AFP NC
OQCC E? @?BSCEC _=E< ?E<CQ BCQ@<GDE> ?\CQ E<C ECQB> ?O >GFCM =D@FAP=DW
GDR >AQ@<GQWC>M P=>@?ADE>M ?Q ?E<CQ =D@CDE=\C> _=E< QC>SC@E E? SGRBCDE
BCE<?P>XHc
H[X .DE=7>ECCQ=DW QAFC> <G\C EG^CD G \GQ=CER ?O O?QB>X 'GQP DCE_?Q^> ?Q=W=DGFFR
SQ?<=N=ECP BCQ@<GDE> G@@CSE=DW @QCP=E @GQP> OQ?B EQCGE=DW @A>E?BCQ> A>=DW E<?>C @GQP> FC>>
GP\GDEGWC?A>FR E<GD E<C BCQ@<GDE EQCGECP GDR ?E<CQ @A>E?BCQ> / =D@FAP=DW @G>< @A>E?BCQ>X
$CW=>FGE=?D <G> QCFG8CP >?BC G>SC@E> ?O .BCQ=@GD ,8SQC>>Y> )+4 GDP >=B=FGQ QAFC> ?O ?E<CQ @GQP
DCE_?Q^>X "D E<C CGQFR H`cI>M E<C 'G>< +=>@?ADE .@E SCQB=EECP BCQ@<GDE> E? ?OOCQ P=>@?ADE> E?
@A>E?BCQ> _<? A>C @G><XH` "D JIHIM E<C +?PP7*QGD^ .@E C8SGDPCP E<GE E? SCQB=E BCQ@<GDE> E?
?OOCQ P=>@?ADE> E? @A>E?BCQ> _<? A>C @G><M @<C@^>M ?Q PCN=E @GQP> / ?\CQQ=P=DW DCE_?Q^ QAFC> E?
E<C @?DEQGQR / GDP SCQB=EECP BCQ@<GDE> E? QCgA=QC G B=D=BAB SAQ@<G>C GB?ADE KAS E? lHIL O?Q
A>C ?O @QCP=E @GQP>XJI
Hc *QGD^CF +C@FGQGE=?DM jU[XH` 4ANF=@ $G_ `U7JVM 3AFR JUM H`cHM 0C@X HIHXJI 4ANF=@ $G_ HHH7JITM 3AFR JHM JIHIM 0C@X HIUVX
U
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &+ 2A 78 ?"@$B1 C' ,>8>7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 370/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
HVX
1DPCQ E<C @GQP DCE_?Q^>Y QAFC>M BCQ@<GDE> _CQC >E=FF COOC@E=\CFR SQ?<=N=ECP OQ?B
?OOCQ=DW P=>@?ADE> K?Q >=B=FGQ NCDCO=E>L E? A>CQ> ?O ?DC NQGDP ?O @QCP=E @GQP> NAE D?E ?E<CQ>M ?Q
GPP=DW G >AQ@<GQWC E? GDR @QCP=E @GQP EQGD>G@E=?D>X a=E< QC>SC@E E? NQGDP7>SC@=O=@ @QCP=E @GQP
P=>@?ADE>M E<C 1D=ECP 0EGEC> +CSGQEBCDE ?O 3A>E=@C NQ?AW<E GD G@E=?D GWG=D>E :G>ECQ'GQPM 6=>GM
GDP .BCQ=@GD ,8SQC>>M GDP QCG@<CP G >CEEFCBCDE _=E< :G>ECQ'GQP GDP 6=>G ADPCQ _<=@< E<?>C
DCE_?Q^> SCQB=E BCQ@<GDE> E? ?OOCQ P=>@?ADE> E? @A>E?BCQ> _<? A>C GFECQDGE=\C NQGDP> ?O
@QCP=E @GQP>X .BCQ=@GD ,8SQC>> BG=DEG=D> =E> SQ?<=N=E=?DM <?_C\CQM GDP E<C +CSGQEBCDE ?O
3A>E=@C GDP .BCQ=@GD ,8SQC>> GQC @AQQCDEFR F=E=WGE=DW E<C =>>ACXJH
HdX
1DE=F QC@CDEFRM GDP _=E< ?DFR \CQR F=B=ECP C8@CSE=?D>M :G>ECQ'GQP GDP 6=>G
SQ?<=N=ECP >AQ@<GQWC> ?D E<C A>C ?O E<C=Q QC>SC@E=\C @QCP=E @GQP NQGDP>X +=>@?\CQ 'GQP QCgA=QC>
E<GE G BCQ@<GDE @GD ?DFR >AQ@<GQWC +=>@?\CQ 'GQP EQGD>G@E=?D> =O E<C BCQ@<GDE GF>? >AQ@<GQWC>
?E<CQ @QCP=E @GQP EQGD>G@E=?D> NR GE FCG>E G> BA@< G> E<C BCQ@<GDE >AQ@<GQWC> +=>@?\CQ 'GQP
EQGD>G@E=?D>XJJ .BCQ=@GD ,8SQC>> SQ?<=N=E> G BCQ@<GDE OQ?B >AQ@<GQW=DW .BCQ=@GD ,8SQC>> @GQP
EQGD>G@E=?D> ADFC>> E<C BCQ@<GDE GF>? >AQ@<GQWC> GFF ?E<CQ @QCP=E @GQP &.+ +$#", *&%+
,%&.)&*,"-.) NR GE FCG>E G> BA@<X
HUX
"D JIHJM :G>ECQ'GQP GDP 6=>G GWQCCP E? QCFG8 E<C=Q D?7>AQ@<GQWC QAFC> G> SGQE ?O
E<C=Q QC>SC@E=\C >CEEFCBCDE> _=E< G BCQ@<GDE @FG>> Ke:+$7HUJI 0CEEFCBCDE>fLX "D SGQE=@AFGQM
E<?>C DCE_?Q^> GWQCCP E? SCQB=E G BCQ@<GDE E? >AQ@<GQWC :G>ECQ'GQP ?Q 6=>G @GQP
EQGD>G@E=?D>M NAE ?DFR =O E<C BCQ@<GDE GF>? >AQ@<GQWC> B?QC @?>EFR @QCP=E @GQP> K=XCXM ERS=@GFFR
JH
JJ +=>@?\CQM :CQ@<GDE (SCQGE=DW 5CWAFGE=?D>M (@E?NCQ H[M JIHHM +*0IcI`JI` GE mJJdX
c
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ && 2A 78 ?"@$B1 C' ,>8>D
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 371/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
.BCQ=@GD ,8SQC>>L NR GE FCG>E G> BA@<X -<C :+$7HUJI 0CEEFCBCDE> SCQB=E> :G>ECQ'GQP GDP
6=>G E? @?DE=DAC E<C=Q SQ?<=N=E=?D> ?O >AQ@<GQWC> ?D :G>ECQ'GQP ?Q 6=>G PCN=E @GQP EQGD>G@E=?D>
KGDP BCQ@<GDE> WCDCQGFFR _?AFP NC ADF=^CFR E? _GDE E? >AQ@<GQWC PCN=E @GQP> _<=@< GQC BA@<
FC>> @?>EFR E<GD @QCP=E @GQP>LX 2AE .BCQ=@GD ,8SQC>> O?QN=P> BCQ@<GDE> OQ?B >AQ@<GQW=DW
.BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D> /.'$)) ,3$2 &')- )/%*3&%4$ +$#", *&%+)X -<A>M =O G BCQ@<GDE
G@@CSE> .BCQ=@GD ,8SQC>> @GQP>M =E ERS=@GFFR @GDD?E >AQ@<GQWC GDR @QCP=E @GQP>X
HcX
.> " C8SFG=DCP =D BR =D=E=GF PC@FGQGE=?DM E<C GN>CD@C ?O QCF=CO OQ?B .BCQ=@GD
,8SQC>>Y> F=D^GWC ?O @QCP=E @GQP >AQ@<GQWC> E? PCN=E @GQP >AQ@<GQWC> >=WD=O=@GDEFR GEECDAGECP KNAE
P=P D?E CF=B=DGECL E<C \GFAC ?O E<C QCF=CO =D :+$7HUJIXJT 5CF=CO OQ?B E<C .BCQ=@GD ,8SQC>>
F=D^GWC ?O >AQ@<GQWC> ?O =E> @GQP> E? >AQ@<GQWC> ?D PCN=E @GQP> _?AFP BG^C @QCP=E @GQP
>AQ@<GQWC> G B?QC SQG@E=@GF ?SE=?D O?Q BGDR BCQ@<GDE>X "DPCCPM ?NkC@E?Q> E? E<C :+$7HUJI
0CEEFCBCDE> @=ECP E<C .BCQ=@GD ,8SQC>> F=D^GWC NCE_CCD @QCP=E GDP PCN=E @GQP >AQ@<GQWC> G> G
QCG>?D _<R E<CR @FG=BCP E<GE E<?>C >CEEFCBCDE> _?AFP SQ?\=PC D? NCDCO=E E? BCQ@<GDE>XJ[
4Q?OC>>?Q !GA>BGD F=^C_=>C @=ECP E<GE F=D^GWC G> G QCG>?D _<R B?>E 1X0X BCQ@<GDE> _?AFP D?E
>AQ@<GQWC @QCP=E @GQP> GDP >? _?AFP D?EM =D <=> \=C_M NCDCO=E OQ?B E<C :+$7HUJI 0CEEFCBCDE>XJV
JT *QGD^CF +C@FGQGE=?DM jjdTM U[n >CC GF>? 0CCM +C@FGQGE=?D ?O .FGD 0X *QGD^CFM 5CFGE=DW E? E<C 4Q?S?>CP 'FG>>
0CEEFCBCDEM .SQ=F HHM JIHT Ke*QGD^CF :+$7HUJI +C@FGQGE=?DfLM 4GQE [XdXJ GDP 5CSFR +C@FGQGE=?D ?O .FGD 0X
*QGD^CFM 4<X+XM 5CFGE=DW E? E<C 4Q?S?>CP 'FG>> 0CEEFCBCDEM .AWA>E HdM JIHT Ke*QGD^CF :+$7HUJI 5CSFR
+C@FGQGE=?DfLM 4GQE [X[XJXJ[ .> )GE=?DGF 5CEG=F *CPCQGE=?D GQWACP =D ?NkC@E=DW E? E<C :+$7HUJI 0CEEFCBCDE>M e"D ?QPCQ E? >AQ@<GQWCM
QCEG=FCQ> BA>E NC _=FF=DW E? >G@Q=O=@C E<C=Q NA>=DC>> QCFGE=?D><=S _=E< .BCQ=@GD ,8SQC>> / _<=@< OC_ =O GDR @GD
GOO?QP E? P?Xf )GE=?DGF 5CEG=F *CPCQGE=?D 0EGECBCDE ?O (NkC@E=?D E? *=DGF .SSQ?\GF ?O E<C 4Q?S?>CP 5AFC
JTK2LKJL .WQCCBCDEM "D 5C 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE +=>@?ADE .DE=EQA>E $=E=WGE=?DM :GR JcM
JIHT Ke)5* :+$7HUJI (NkC@E=?DfLM SSX VM Hc7H`JV !GA>BGD :+$7HUJI 5CS?QEM jjd[7dUX 1DF=^C E<C '?D>EGDE=DC 'GDD?D (NkC@E?Q>M E<C )GE=?DGF 5CEG=F
*CPCQGE=?D GDP 4Q?OC>>?Q !GA>BGDM E<C "DPCSCDPCDE :CQ@<GDE 4FG=DE=OO> >ASS?QECP E<C :+$7HUJI0CEEFCBCDE>M GQWA=DW E<GE _<=FC GPP=E=?DGF QCF=CO GWG=D>E .BCQ=@GD ,8SQC>> _G> =BS?QEGDE E? ?NEG=DM E<C QCF=CO
_=E< QC>SC@E E? :G>ECQ'GQP GDP 6=>G D?7>AQ@<GQWC QAFC> _G> DC\CQE<CFC>> \GFAGNFCX 5=@<GQP .QD?FP =D :+$7
HUJI *G=QDC>> !CGQ=DWM 0CSECBNCQ HJM JIHTM SSX [[7[cX
`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &, 2A 78 ?"@$B1 C' ,>8><
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 372/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
-<C .WQCCBCDE _=FF D?_ CF=B=DGEC .BCQ=@GD ,8SQC>>Y> F=D^GWC ?O @QCP=E @GQP GDP PCN=E @GQP
>AQ@<GQW=DWM >? BCQ@<GDE> E<GE G@@CSE .BCQ=@GD ,8SQC>> @GQP> K_<=@< @?FFC@E=\CFR G@@?ADE O?Q G
FGQWC ><GQC ?O QCEG=F >GFC>LJd @GD >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> _=E<?AE PQ?SS=DW G@@CSEGD@C
?O .BCQ=@GD ,8SQC>>X
8383 $RK )SLKKJKCQ !"#$%&'"($) +HJOKQGQGHC *KEDQGWK QH QRK (QDQUF XUH
H`X
4Q?OC>>?Q> 0E=WF=EZ GDP !GA>BGD KGDP E<C ?NkC@E?Q>L B=>FCGP=DWFR >AWWC>E E<GE
E<C .WQCCBCDE @QCGEC> DC_ GDE=@?BSCE=E=\C QC>EQ=@E=?D> E<GE _=FF <GQB BCQ@<GDE>X 4Q?OC>>?Q
0E=WF=EZ @FG=B> E<GE E<C .WQCCBCDE _=FF
JU !C
@=EC>M O?Q C8GBSFCM E<C GN=F=ER ADPCQ E<C :+$7HUJI 0CEEFCBCDE> O?Q BCQ@<GDE> E? P=OOCQCDE=GFFR
>AQ@<GQWC GE E<C eSQ?PA@Ef FC\CF / =XCXM G P=OOCQCDE >AQ@<GQWC O?Q SQCB=AB :G>ECQ'GQP ?Q 6=>G
@QCP=E @GQP> E<GE @?>E E<C BCQ@<GDE B?QC E? G@@CSE E<GD D?D7SQCB=AB @QCP=E @GQP>XJc 4Q?OC>>?Q
0E=WF=EZ @?DECDP> E<GE E<C .WQCCBCDE e
fJ` !C C8SFG=D>9
Jd
JU +C@FGQGE=?D ?O 4Q?OX 3?>CS< 0E=WF=EZM :GR JUM JIH[ Ke0E=WF=EZ +C@FGQGE=?DfLM jJd KCBS<G>=> GPPCPLXJc 0E=WF=EZ +C@FGQGE=?DM jJcXJ` 0E=WF=EZ +C@FGQGE=?DM jTIX .FE<?AW< SQ?PA@E7FC\CF >AQ@<GQW=DW => GD ?SE=?D E<GE " NCF=C\C BCQ@<GDE> ><?AFP
<G\CM E<CQC GQC SQG@E=@GF =BSCP=BCDE> _=E< =BSFCBCDE=DW >A@< G >EQGECWRX "D .A>EQGF=GM E<C 5C>CQ\C 2GD^ ?O
.A>EQGF=G <G> CD@?AQGWCP BCQ@<GDE> E? CDWGWC =D SQ?PA@E7FC\CF >AQ@<GQW=DW NAE <G> O?ADP E<GE OC_M =O GDRM
BCQ@<GDE> A>C E<=> >EQGECWRX 0CCM 5C>CQ\C 2GD^ ?O .A>EQGF=GM e. 6GQ=GE=?D E? E<C 0AQ@<GQW=DW 0EGDPGQP>9 *=DGF5CO?QB> GDP 5CWAFGE=?D "BSG@E 0EGECBCDEMf <EES9oo___XQNGXW?\XGAoSGRBCDE>7
>R>ECBoQCO?QB>o@GQP>oJIHJId7\GQ7>AQ@<GQW=DW7>EDP>7O=D7QCO7Q=>oSPOoJIHJId7\GQ7>AQ@<GQW=DW7>EDP>7O=D7QCO7
Q=>XSPO M 3ADC JIHJM SX dX
HI
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &8 2A 78 ?"@$B1 C' ,>8>E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 373/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
XTI
JIX
2AE .BCQ=@GD ,8SQC>> @AQQCDEFR O?QN=P> &.2 >AQ@<GQW=DW ADFC>> E<C BCQ@<GDE GF>?
>AQ@<GQWC> GFF ?E<CQ @GQP EQGD>G@E=?D>M =D@FAP=DW PCN=E @GQP EQGD>G@E=?D>M NR GE FCG>E E<C >GBC
GB?ADEX .DP E<C :+$7HUJI 0CEEFCBCDE> P=P D?E CF=B=DGEC E<C SQC7C8=>E=DW :G>ECQ'GQP GDP
6=>G D?7>AQ@<GQWC QAFC> _=E< QC>SC@E E? PCN=E @GQP EQGD>G@E=?D>X -<A>M ADPCQ E<C >EGEA> gA?
QAFC> ?O E<C>C DCE_?Q^>M ?DFR =O G BCQ@<GDE PQ?S> G@@CSEGD@C ?O .BCQ=@GD ,8SQC>> @GQP> @GD =E
ERS=@GFFR >AQ@<GQWC &.2 :G>ECQ'GQP ?Q 6=>G @QCP=E @GQP> NR &.2 GB?ADEX
JHX
4Q?OC>>?Q 0E=WF=EZ E<A> => D?E @?BSGQ=DW E<C @?BSCE=E=\C >EQGECW=C> G\G=FGNFC E? G
BCQ@<GDE ADPCQ E<C ECQB> ?O E<C .WQCCBCDE E? E<C >EQGECW=C> G\G=FGNFC E? E<CB E?PGRX "D>ECGPM
<C => @?BSGQ=DW E<C=Q G\G=FGNFC ?SE=?D> ADPCQ E<C .WQCCBCDE E? G <RS?E<CE=@GF >CE ?O $5$.
#$,,$% ?SE=?D> E<GE _?AFP SCQB=E G BCQ@<GDE E? CDWGWC =D E<C B?QC QCO=DCP SQ=@=DW >EQGECW=C>
<C PC>@Q=NC>M GDP _<=@< <C >GR> GQC O?QC@F?>CP NR E<C .WQCCBCDEX 4Q?OC>>?Q 0E=WF=EZ >EGEC> E<GE
e
fTH 2AE E<GE => D?E EQACX -<C .WQCCBCDE CF=B=DGEC> G
^CR .BCQ=@GD ,8SQC>> @?BSCE=E=\C QC>EQ=@E=?D _<=FC D?E CF=B=DGE=DW ?E<CQ QC>EQ=@E=?D>X "E> DCE
COOC@E @GDD?E NC E? BG^C E<C >=EAGE=?D _?Q>C E<GD =E GFQCGPR =>X "E => ?DFR _?Q>C E<GD =E _?AFP NC
@?BSGQCP E? G eNAE7O?Q _?QFPf =D _<=@< >?BC ?Q GFF ?O E<C QCBG=D=DW QC>EQ=@E=?D> _CQC GF>?
CF=B=DGECPX
JJX
4Q?OC>>?Q 0E=WF=EZ => D?E GF?DC =D GEEQ=NAE=DW GDE=@?BSCE=E=\C COOC@E> E? E<C
.WQCCBCDE QGE<CQ E<GD E? E<C >EGEA> gA?X 4Q?OC>>?Q !GA>BGD >EGEC>9
TI 0E=WF=EZ +C@FGQGE=?DM jTHXTH 0E=WF=EZ +C@FGQGE=?DM jJd KCBS<G>=> GPPCPLX
HH
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &> 2A 78 ?"@$B1 C' ,>8>F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 374/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
-<C 6%-6-)$+ )$,,'$7$., 8"'' $'"7".&,$ GDR C@?D?B=@ =D@CDE=\C O?Q G
BCQ@<GDE E? GEECBSE E? >ECCQ NA>=DC>> G_GR OQ?B .:,; hGDP E?_GQP>6=>GM :G>ECQ'GQPM ?Q +=>@?\CQ @QCP=E @GQP>i A>=DW >AQ@<GQWC>M >=D@C E<C
SCQB=EECP >AQ@<GQWC O?Q .:,; @GD NC D? FGQWCQ E<GD E<C >AQ@<GQWC> O?Q
6:' ?Q +=>@?\CQ @GQP>M C\CD E<?AW< E<C @?>E> ?O E<?>C @GQP> GQC F?_CQ
E<GD .:,; @GQP>XTJ
JTX
4Q?OC>>?Q !GA>BGD B=>FCGP=DWFR @FG=B> E<GE E<C 94%$$7$., _=FF @QCGEC e?F=W?S?FR
NC<G\=?QfTT GDP SQ?\=PC> .BCQ=@GD ,8SQC>> _=E< 7-%$ BGQ^CE S?_CQ E<GD =E <G> E?PGR9
h0i=D@C BCQ@<GDE> _=FF D?E NC SCQB=EECP E? >AQ@<GQWC .:,; @QCP=E7@GQP
EQGD>G@E=?D> ADFC>> E<CR GF>? >AQ@<GQWC 6:' @QCP=E7@GQP EQGD>G@E=?D>
CgAGFFRM " O=DP =E F=^CFR E<GE .:,; 8"'' ".*%$&)$ ",) 7$%*3&., 1$$) QCFGE=\C E?
6:' ?Q +=>@?\CQ NC@GA>C .:,; ^D?_> BCQ@<GDE> @GDD?E >ECCQ@?D>ABCQ> E? 6:' ?Q +=>@?\CQ @QCP=E @GQP> NR D?E >AQ@<GQW=DW E<CB ?Q
>AQ@<GQW=DW E<CB FC>> E<GD .:,; @QCP=E @GQP>XT[
J[X
!C >AWWC>E> E<GE E<C .WQCCBCDE e8"'' '$&+ ,- GD GDE=@?BSCE=E=\C ?AE@?BCf NR
SCQB=EE=DW .BCQ=@GD ,8SQC>> E? CDO?Q@C =E> D?7P=OOCQCDE=GF >AQ@<GQW=DW QC>EQ=@E=?DTV GDP >EGEC>
E<GE ehGiD C\CD _?Q>C S?>>=NFC QC>AFEf ?O E<C .WQCCBCDE => eE<C mSQ=@C O=8Y ?AE@?BCf _<=@< <C
C8SFG=D>M BCGD> E<GE eh>i=D@C .:,; GDP 6:' _=FF GFF QCGF=ZC E<GE E<C GFF?_CP >AQ@<GQWC _=FF NC
=PCDE=@GF GB?DW E<C E<QCC @GQP>M E<CR BGR GFF =D@QCG>C E<C=Q BCQ@<GDE OCC>XfTd
JVX
-<C '?D>EGDE=DC 'GDD?D (NkC@E?Q> >=B=FGQFR >EGEC9
h-i<C 4Q?S?>CP 0CEEFCBCDE D?E ?DFR $'"7".&,$) ,3$ -.$ #$.$1", -1
)/%*3&%4".4pE<C GN=F=ER ?O GE FCG>E >?BC BCQ@<GDE> E? NCDCO=E OQ?B
=DECQNQGDP @?BSCE=E=?D E<Q?AW< P=OOCQCDE=GF >AQ@<GQW=DWp_<=FC h>=@i
TJ !GA>BGD 5CS?QEM j[J KCBS<G>=> GPPCPLX
TT !GA>BGD 5CS?QEM jdHXT[ !GA>BGD 5CS?QEM jVH KCBS<G>=> GPPCPLXTV !GA>BGD 5CS?QEM 4GQE 6"" >C@E=?D <CGP=DW KCBS<G>=> GPPCPLXTd !GA>BGD 5CS?QEM jdJX
HJ
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &7 2A 78 ?"@$B1 C' ,>87+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 375/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
$76-8$%".4 97$%"*&. :;6%$)) ,- %&")$ ",) %&,$) E? OAQE<CQ CDEQCD@< =E>
S?_CQXTU
JdX
)?E_=E<>EGDP=DW =E> CGQF=CQ GQWABCDE E<GE E<C GN=F=ER E? >AQ@<GQWC :G>ECQ'GQP
GDP 6=>G EQGD>G@E=?D> SQ?\=PCP NR E<C :+$7HUJI 0CEEFCBCDE> _G> D?E \GFAGNFC E? BCQ@<GDE>
PAC E? G BCQ@<GDEY> DCCP E? PQ?S .BCQ=@GD ,8SQC>> @GQP> E? EG^C GP\GDEGWC ?O =EM E<C )GE=?DGF
5CEG=F *CPCQGE=?D >=B=FGQFR >EGEC> E<GE E<C .WQCCBCDE e&11"%7&,"5$'2 /.+$%*/,) 7$%*3&.,)<
)/%*3&%4".4 &#"'","$)MfTc NC@GA>C eBCQ@<GDE> E<GE _=>< E? >AQ@<GQWC .BC8 BA>E >AQQCDPCQ E<C=Q
Q=W<E E? CDWGWC =D E<C P=OOCQCDE=GFM =DECQNQGDP >AQ@<GQW=DW E<GE E<C :+$ HUJI >CEEFCBCDE
SCQB=E>XfT` 2AE E<C .WQCCBCDE P?C> D?E SCQB=E .BCQ=@GD ,8SQC>> E? #$4". CDO?Q@=DW G D?7
P=OOCQCDE=GF >AQ@<GQWC SQ?\=>=?D _=E< QC>SC@E E? ?E<CQ @QCP=E @GQP NQGDP> / .BCQ=@GD ,8SQC>>
GFQCGPR CDO?Q@C> E<GE S?F=@R _=E<?AE E<C .WQCCBCDEX -<C )5* @Q=E=@=ZCP E<C :+$7HUJI
0CEEFCBCDE> NC@GA>CM _=E< .BCQ=@GD ,8SQC>>Y )+4 =D SFG@CM E<CR >G=P OC_ BCQ@<GDE> _?AFP
>AQ@<GQWC GE GFFX )?_ E<CR >AWWC>E CF=B=DGE=?D ?O E<C .BCQ=@GD ,8SQC>> QC>EQ=@E=?D => EG^=DW
G_GR G \GFAGNFC ?SE=?D OQ?B BCQ@<GDE>X
JUX
"D OG@EM E<C .WQCCBCDE SQ?\=PC> G DC_ ?SE=?D / >AQ@<GQWC GFF NQGDP> ?O @QCP=E
@GQP> NAE D?E PCN=E @GQP> / E<GE BCQ@<GDE> P=P D?E SQC\=?A>FR <G\CX -<GE @GDD?E eFCGP E? GD
GDE=@?BSCE=E=\C ?AE@?BCf ?Q e f ?Q @QCGEC G eSQ=@C O=8f
?AE@?BC E<GE FCE> .BCQ=@GD ,8SQC>> e=D@QCG>C =E> BCQ@<GDE OCC>f QCFGE=\C E? _<GE =E _?AFP
@<GQWC GN>CDE E<C .WQCCBCDEX 5CFGE=\C E? E<C >EGEA> gA?M E<C .WQCCBCDE @FCGQFR P?C> D?DC ?O
E<C>C E<=DW>X
TU :CB?QGDPAB ?O $G_ =D (SS?>=E=?D E? :?E=?D O?Q *=DGF .SSQ?\GF ?O 0CEEFCBCDE ?D NC<GFO ?O9 U7,FC\CDM "D@XM CE
GFXM 3ADC dM JIH[ Ke'' 2Q=COfLM S TV KCBS<G>=> GPPCPLXTc 0EGECBCDE ?O (NkC@E=?D> E? E<C .BCQ=@GD ,8SQC>> 'FG>> .@E=?D 0CEEFCBCDE ?O .N>CDE 4AEGE=\C 5AFC JTK2LKJL
'FG>> :CBNCQ )GE=?DGF 5CEG=F *CPCQGE=?DM :GR JHM JIH[ Ke)5* 0EGECBCDE ?O (NkC@E=?D>fLM SX UXT` "PXM SX cX
HT
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &D 2A 78 ?"@$B1 C' ,>87&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 376/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
83<3 $RK 1LHFOKMQF IHL -ULQRKL +HJOKQGQGWK *KIHLJ DCP QRK *KDFHCDYEKCKFF HI QRK
(KQQEKJKCQ
JcX " C8SFG=DCP =D BR =D=E=GF PC@FGQGE=?D GDP QC\=>=E NCF?_ _<R E<C GN=F=ER E? >AQ@<GQWC
GFF @QCP=E @GQP> _=FF @GA>C G QCFGE=\C ><=OE ?O EQGD>G@E=?D \?FABC E? PCN=E @GQP> KGDP @G><L GDP
_<R E<GE _=FF NCDCO=E BCQ@<GDE>X " GWQCC _=E< 4Q?OC>>?Q 0E=WF=EZ E<GE eD?7P=OOCQCDE=GF >AQ@<GQWCf
QAFC> GQC GDE=@?BSCE=E=\C GDP BCQ@<GDE> ><?AFP <G\C E<C GN=F=ER E? C>EGNF=>< _<GEC\CQ
>AQ@<GQWC> ?Q P=>@?ADE> E<CR _=>< =D @?BSCE=E=?D _=E< ?E<CQ BCQ@<GDE>X
J`X .BCQ=@GD ,8SQC>>M :G>ECQ'GQPM GDP 6=>G GFF P=>GWQCCM GDP E<CR GFF <G\C QCEG=DCP
C@?D?B=@ C8SCQE> =D E<=> @G>C ?Q :+$7HUJI SQC\=?A>FR _<? GQWAC E<GE E<C DCE_?Q^> FG@^ BGQ^CE
S?_CQ GDP E<C=Q GDE=7>ECCQ=DW QAFC> GQC SQ?@?BSCE=E=\C GDP NCDCO=E E<C SANF=@X " NCF=C\C E<GE
E<?>C GQWABCDE> GQC =D@?QQC@EX 2AE GDR @FG=B E<GE E<C .WQCCBCDE <G> GDE=@?BSCE=E=\C COOC@E>
NR CDGNF=DW .BCQ=@GD ,8SQC>> E? CDO?Q@C G D?7P=OOCQCDE=GF >AQ@<GQWC S?F=@R =BSF=@=EFR => NG>=DW
E<GE @FG=B ?D E<C G>>ABSE=?D E<GE E<C QCFC\GDE >EGEA> gA? => D?E E<C G@EAGF _?QFP NAE QGE<CQ G
NAE7O?Q _?QFP =D _<=@< GFF G>SC@E> ?O .BCQ=@GD ,8SQC>>Y> )+4 <G\C NCCD CF=B=DGECPX "D ?E<CQ
_?QP>M GN>CDE E<C .WQCCBCDE >?BC SFG=DE=OO _=FF F=E=WGEC ?Q GQN=EQGEC E? G >A@@C>>OAF \CQP=@E GDP
?NEG=D =DkAD@E=\C QCF=CO ?D NC<GFO ?O &'' 7$%*3&.,) =D E<C 1D=ECP 0EGEC> KQGE<CQ E<GD G DGQQ?_CQ
=DkAD@E=?D ?Q >CEEFCBCDE ?Q ?DC GSSF=@GNFC ?DFR E? G SGQE=@AFGQ SFG=DE=OOL E<GE SCQB=E> GFF
BCQ@<GDE> E? CDWGWC =D P=OOCQCDE=GF >AQ@<GQW=DWM GDP E<GE ?AE@?BC => AS<CFP ?D GSSCGFX -<GE
QCgA=QC> G F=E=WGE=?D Q=>^ GDGFR>=> =D GPP=E=?D E? GD C@?D?B=@ GDGFR>=>X[I "O =E _CQC @CQEG=D E<GE
QCkC@E=?D ?O E<C .WQCCBCDE _?AFP NC O?FF?_CP gA=@^FR NR C\CD B?QC COOC@E=\C @?BSCE=E=\C
[I 2?E< 4Q?OC>>?Q> 0E=WF=EZ GDP !GA>BGD G\?=P E<C F=E=WGE=?D Q=>^ =>>AC NR BG^=DW E<C C8EQCBC @FG=B E<GE E<C
.WQCCBCDE SQ?\=PC> .- NCDCO=E> K>? E<GE &.2 S?>>=N=F=ER ?O B?QC @?BSFCEC QCF=CO => B?QC \GFAGNFC E<GD E<C
.WQCCBCDELX .FE<?AW< " GB @?DO=PCDE E<GE .BCQ=@GD ,8SQC>>Y> )+4 => GDE=@?BSCE=E=\C GDP ><?AFP NC
GN?F=><CPM " <G\C D?E ADPCQEG^CD G F=E=WGE=?D Q=>^ GDGFR>=> GDP <G\C D? ?S=D=?D ?D E<C F=^CF=<??P E<GE G NCEECQ
?AE@?BC _=FF BGECQ=GF=ZC O?Q E<C @FG>> G> G _<?FC =O E<C .WQCCBCDE => QCkC@ECPX
H[
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &< 2A 78 ?"@$B1 C' ,>87,
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 377/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 378/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
5CEG=F *CPCQGE=?DM <?_C\CQM A>C K?Q QGE<CQ B=>A>CL BGQ^CE PCO=D=E=?D =D G SAQCFR >CBGDE=@ _GR
E? GQWAC E<GE BCQ@<GDE> @GDD?E NCDCO=E NR >ECCQ=DW @A>E?BCQ> OQ?B @QCP=E @GQP EQGD>G@E=?D> E?
PCN=E @GQP> / GD =>>AC " P=>@A>> =D 4GQE [X[X
TJX
.FE<?AW< 4Q?OC>>?Q !GA>BGD GDP 4Q?OC>>?Q 0E=WF=EZ KGDP "DP=\=PAGF :CQ@<GDE
4FG=DE=OO C8SCQE +QX '<Q=>E?S<CQ 6CFFEAQ?L <G\C A>CP >?BC_<GE P=OOCQCDE FGDWAGWC E? PC>@Q=NC
E<C QCFC\GDE BGQ^CE> =D E<C SGRBCDE @GQP =DPA>EQRM ?AQ QC>SC@E=\C GDGFR>C> <G\C NCCD >=B=FGQX
"D :+$7HUJIM " @?D@FAPCP E<GE QCFC\GDE GDE=EQA>E BGQ^CE> C8=>E O?Q >CQ\=@C> SQ?\=PCP E?
BCQ@<GDE> >CSGQGEC OQ?B >CQ\=@C> SQ?\=PCP E? @GQP<?FPCQ>M O?Q @QCP=E @GQP> >CSGQGEC OQ?B PCN=E
@GQP>M GDP / =D SGQE #$*&/)$ -1 ,3$ $11$*,) -1 .$,8-%= &.,">),$$%".4 %/'$) / O?Q P=OOCQCDE NQGDP>
?O @QCP=E @GQP ?Q PCN=E @GQP G@@CSEGD@C >CQ\=@C> >?FP E? BCQ@<GDE>X[T .> " C8SFG=DCPM ehGiDE=7
>ECCQ=DW QAFC> NR E<C=Q DGEAQC ECDP E? @QCGEC >CSGQGEC QCFC\GDE BGQ^CE> >=D@C E<CR QCPA@C E<C
>AN>E=EAEGN=F=ER ?O ?E<CQ SGRBCDE BCE<?P>Xf[[ ,\CD =D G BGQ^CE PCO=DCP E? =D@FAPC GFF @QCP=E
@GQP G@@CSEGD@C >CQ\=@C> K?Q eDCE_?Q^ >CQ\=@C>fL >?FP E? BCQ@<GDE>M " C8SFG=DCP E<GE E<C F?>> ?O
SQ?O=E> E? B?>E BCQ@<GDE> OQ?B PQ?SS=DW GDR ?DC NQGDPM E<C =DGN=F=ER E? SQ?@C>> ?DC NQGDP ?O
@GQP EQGD>G@E=?D> A>=DW GD?E<CQ DCE_?Q^ KGDP =E> OCC>LM GDP E<C GDE=7>ECCQ=DW QAFC>M BCGDE E<GE
BGQ^CE ><GQC> =D E<C NQ?GPCQ WCDCQGF SAQS?>C @QCP=E @GQP DCE_?Q^ >CQ\=@C> BGQ^CEM >EGDP=DW
GF?DCM _?AFP ECDP E? ADPCQ>EGEC E<C PCWQCC ?O BGQ^CE S?_CQ E<GE CG@< DCE_?Q^ @?AFP
C8CQ@=>CX[V
[T 0CCM 5CS?QE ?O .FGD 0X *QGD^CFM :+$ +?@^CE )?X HUJIM 3AFR JM JII` Ke*QGD^CF :+$7HUJI 5CS?QEfLM jHHX[[ "PXM jVIX[V "PXM jHV Ke.DE=7>ECCQ=DW QAFC> <G\C COOC@E=\CFR P=\=PCP E<C BGQ^CE >? E<GE CG@< NQGDP / :G>ECQ'GQP GDP 6=>G /
?O G SGQE=@AFGQ ERSC ?O @GQP DCE_?Q^ >CQ\=@C => >ASSF=CP =D G QCFC\GDE BGQ^CE >CSGQGEC OQ?B E<C ?E<CQ NQGDP>X,gA=\GFCDEFRq ><GQC> =D E<C NQ?GPCQ YBGQ^CEY O?Q WCDCQGF SAQS?>C @GQPM ?OOF=DC PCN=E @GQPM GDP 4") PCN=E @GQP
DCE_?Q^ >CQ\=@C> @GD ECDP E? ADPCQCBS<G>=ZC CG@< DCE_?Q^Y> BGQ^CE S?_CQM PAC E? E<C=Q GDE=7>ECCQ=DW
QAFC>XfLX
Hd
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ &F 2A 78 ?"@$B1 C' ,>87>
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 379/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
TTX
4Q?OC>>?Q 0E=WF=EZ QCG@<C> E<C >GBC @?D@FA>=?D G> " P=PX "D :+$7HUJIM <C
C8SFG=DCP9
[d
T[X
a=E< QC>SC@E E? .BCQ=@GD ,8SQC>>M <C >=B=FGQFR C8SFG=D> E<GE e
f[U
TVX
4Q?OC>>?Q !GA>BGD @?D@FAPC> E<GE E<CQC => G QCFC\GDE BGQ^CE O?Q WCDCQGF
SAQS?>C @QCP=E @GQP DCE_?Q^ >CQ\=@C> K=XCXM >CQ\=@C> E? BCQ@<GDE>LX[c !=> O?@A> QCWGQP=DW BGQ^CE
PCO=D=E=?D =D E<=> @G>C => =D P=>E=DWA=><=DW @QCP=E @GQP> OQ?B PCN=E @GQP>M GDP <C P?C> D?E K=D E<=>
[d ,8SCQE 5CS?QE ?O 3?>CS< 0E=WF=EZM 4<X+XM "D 5C9 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE .DE=EQA>E $=E=WGE=?DM
3ADC JVM JII`M Ke0E=WF=EZ :+$7HUJI 5CS?QEfLM jHIK"LX 0CC GF>? ,8SCQE 5CS?QE ?O +QX '<Q=>E?S<CQ .X 6CFFEAQ?M "D
5C9 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE .DE=EQA>E $=E=WGE=?DM 3AFR JM JII` Ke6CFFEAQ? :+$7HUJI
5CS?QEfLM jH[[
[U ,8SCQE 5CS?QE ?O 4Q?OC>>?Q 3?>CS< 0E=WF=EZM "D 5C .BCQ=@GD ,8SQC>> .DE=70ECCQ=DW 5AFC> .DE=EQA>E $=E=WGE=?DM .SQ=F
JM JIHTM Ke0E=WF=EZ 5CS?QEfLM jTdX +QX 6CFFEAQ? GF>? QCG@<C> E<C >GBC @?D@FA>=?D> E<GE <C QCG@<CP =D :+$7HUJIX,8SCQE 5CS?QE ?O +QX '<Q=>E?S<CQ .X 6CFFEAQ?M "D 5C .BCQ=@GD ,8SQC>> .DE=70ECCQ=DW 5AFC> .DE=EQA>E $=E=WGE=?DM
.SQ=F TM JIHT Ke6CFFEAQ? 5CS?QEfLM jJUcX[c !GA>BGD 5CS?QEM jJIn !GA>BGD :+$7HUJI 5CS?QEM jJUX
HU
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,+ 2A 78 ?"@$B1 C' ,>877
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 380/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
@G>CL C8SF?QC _<CE<CQ E<C BGQ^CE @GD NC PCO=DCP C\CD B?QC DGQQ?_FR KE? >=DWFC NQGDP>L PACM
O?Q C8GBSFCM E? E<C @GQP DCE_?Q^>Y GDE=7>ECCQ=DW QAFC>X[` "D G @G>C NQ?AW<E NR E<C )C_ rCGFGDP
'?BBCQ@C '?BB=>>=?D GWG=D>E :G>ECQ'GQP GDP 6=>G =D _<=@< N?E< 4Q?OC>>?Q !GA>BGD GDP "
>CQ\CP G> C8SCQE> ?D NC<GFO ?O E<C '?BB=>>=?DM 4Q?OC>>?Q !GA>BGD PCO=DCP G QCFC\GDE BGQ^CE
@?D>=>E=DW ?O :G>ECQ'GQP GDP 6=>G >CQ\=@C> SQ?\=PCP E? BCQ@<GDE>X 2AE <C C8SFG=DCP F=^C " <G\C
E<GE eh?iDC @?AFP PCO=DC G B?QC DGQQ?_ BGQ^CE ?O 6=>G G@gA=Q=DW h=XCX BCQ@<GDE >CQ\=@C>i GDP
>=B=FGQFR G BGQ^CE O?Q :G>ECQ'GQP G@gA=Q=DWf GDP E<GE eD?DC ?O E<C >AN>CgACDE C@?D?B=@
GDGFR>C> _?AFP @<GDWCXfVI 4Q?OC>>?Q !GA>BGD GF>? C8SFG=DCP =D )C_ rCGFGDP E<GE =D>ECGP ?O G
>=DWFC7NQGDP BGQ^CE ?Q G :G>ECQ'GQP76=>G @QCP=E @GQP G@gA=Q=DW BGQ^CEM ?DC @?AFP PCO=DC G
NQ?GPCQ BGQ^CE O?Q GFF NQGDP> ?O BCQ@<GDE @QCP=E @GQP G@gA=Q=DW >CQ\=@C> KCXWXM =D )C_ rCGFGDP
=D@FAP=DW .BCQ=@GD ,8SQC>> GDP +=DCQ> 'FANL _=E<?AE GFECQ=DW E<C C@?D?B=@ GDGFR>=>XVH
TdX 4Q?OC>>?Q 0E=WF=EZ P?C> D?E GPPQC>> E<C WC?WQGS<=@ C8ECDE ?O E<C BGQ^CEM NAE
4Q?OC>>?Q !GA>BGD GDP " GWQCC E<GE E<C QCFC\GDE WC?WQGS<=@ BGQ^CE => E<C 1D=ECP 0EGEC>XVJ
TUX
"D ><?QEM E<CQC => D? >AN>EGDE=\C P=OOCQCD@C NCE_CCD BR ?S=D=?D> GDP E<?>C ?O
4Q?OC>>?Q> !GA>BGD GDP 0E=WF=EZ @?D@CQD=DW BGQ^CE PCO=D=E=?DX
TcX
" _=FF QCEAQD E? E<C =BSF=@GE=?D> ?O BGQ^CE PCO=D=E=?D K?Q FG@^ E<CQC?OL O?Q GDGFR>=>
?O E<C COOC@E> ?O >AQ@<GQW=DW =D 4GQE [X[XHX
[` !=> GDGFR>=> ?O CG@< DCE_?Q^Y> BGQ^CE S?_CQ GDP E<C DCCP ?O B?>E BCQ@<GDE> E? G@@CSE CG@< ?O E<C BGk?Q
NQGDP>M <?_C\CQM => E<C >GBC G> B=DCM 4Q?OC>>?Q 0E=WF=EZY>M GDP +QX 6CFFEAQ?Y>X *?Q C8GBSFCM <C C8SFG=D> E<GE
:G>ECQ'GQPM 6=>GM GDP .BCQ=@GD ,8SQC>> eS?ECDE=GFFRq @?AFP @?BSCEC GWG=D>E CG@< ?E<CQf QCWGQP=DW BCQ@<GDE
OCC> NAE E<GE eE<=> @?BSCE=E=?D <G> D?E ?@@AQQCP =D SQG@E=@CXf !GA>BGD 5CS?QEM j[IXVI 2Q=CO ?O C\=PCD@C ?O 4Q?OC>>?Q 3CQQR !GA>BGD KQCPG@ECP ?SCD \CQ>=?DL =D '?BBCQ@C '?BB=>>=?D \X 'GQP> )r
$=B=ECPM CE GFX GDP +0, K)rL $=B=ECPM CE GFX \X 'GQP> )r $=B=ECP CE GFXM [ :GR JII` Ke!GA>BGD )C_rCGFGDP 2Q=CO
?O ,\=PCD@CfLM j[XH`X
VH "PXM j[XJIXVJ !GA>BGD 5CS?QEM jTcn *QGD^CF +C@FGQGE=?DM jUTX +QX 6CFFEAQ? >EGEC> <=> ADPCQ>EGDP=DW E<GE
Xf
6CFFEAQ? 5CS?QEM *)H[IX
Hc
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,& 2A 78 ?"@$B1 C' ,>87D
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 381/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
<383 9DLZKQ 1H[KL
T`X " GWQCC _=E< 4Q?OC>>?Q !GA>BGD GDP 4Q?OC>>?Q 0E=WF=EZ E<GE :G>ECQ'GQPM 6=>GM GDP
.BCQ=@GD ,8SQC>> GFF S?>>C>> BGQ^CE S?_CQXVT
<3<3 (QKKLGCS GC +HJOKQGQGWK 9DLZKQF
[IX 4Q?OC>>?Q !GA>BGDM 4Q?OC>>?Q 0E=WF=EZM GDP " GQC =D GWQCCBCDE E<GEM G> 4Q?OC>>?Q
!GA>BGD SAE> =EM eSQ=@C P=OOCQCD@C> E<Q?AW< m>AQ@<GQWC>Y ?Q mP=>@?ADE>Y GQC @?BB?D =D E<C 1X0X
QCEG=F C@?D?BRXfV[ !?_C\CQM 4Q?OC>>?Q !GA>BGD B=>FCGP=DWFR G>>CQE> E<GE eE<C SQ?S?>CP
>CEEFCBCDE SQ?<=N=E> kA>E E<=> ERSC ?O @?BSCE=E=\C NC<G\=?Qf KQCOCQCD@=DW .BCQ=@GD ,8SQC>>Y> D?7
P=OOCQCDE=GF >AQ@<GQWC S?F=@RLXVV .> " C8SFG=DCP =D 4GQE JM <?_C\CQM =E => .BCQ=@GD ,8SQC>>Y> )+4
E<GE SQ?<=N=E> P=OOCQCDE=GF >AQ@<GQWC> D?E BCQCFR NCE_CCD .BCQ=@GD ,8SQC>> @GQP> GDP ?E<CQ
NQGDP> ?O @QCP=E @GQP>M NAE GF>? NCE_CCD .BCQ=@GD ,8SQC>> @GQP> GDP PCN=E @GQP>X -<C
.WQCCBCDE F=NCQGF=ZC> E<C .BCQ=@GD ,8SQC>> S?F=@R NR QCB?\=DW E<=> F=D^ E? PCN=E @GQP>X -<C
:+$7HUJI 0CEEFCBCDE SCQB=E> BCQ@<GDE> E? >AQ@<GQWC :G>ECQ'GQP GDP 6=>G @QCP=E @GQP
EQGD>G@E=?D> =O E<C BCQ@<GDE >AQ@<GQWC> .BCQ=@GD ,8SQC>> EQGD>G@E=?D>M GDP _=E< E<C SQ?S?>CP
@<GDWC E? .BCQ=@GD ,8SQC>>Y> )+4 ADPCQ E<C ECQB> ?O E<C .WQCCBCDEM BCQ@<GDE> _=FF NC GNFC
E? >AQ@<GQWC .BCQ=@GD ,8SQC>>M :G>ECQ'GQPM GDP 6=>G @QCP=E @GQP EQGD>G@E=?D>X
=3 1*,-%((,*( ($#;2#$> );*%%( .#$5 %)+5 %2%9%"$ ,- 9/ %+,",9#+ )")2/(#( )"&
1*,-%((,* 5)!(9)"?( +*#$#+#(9( 5%*% )*% !"1%*(!)(#7% )"& #"+,"(#($%"$ .#$5
5#( %)*2#%* 1,(#$#,"(
[HX "D E<C QCBG=DPCQ ?O E<=> 5CSFRM " C8SFG=D _<R " NCF=C\C E<GE C@?D?B=@ C\=PCD@C
GDP GDGFR>=> ><?_> E<GE E<C GN=F=ER E? >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> KCgAGFFRL _=E<?AE G
VT !GA>BGD 5CS?QEM 4GQE 6n 0E=WF=EZ +C@FGQGE=?DM jHJ K n 0E=WF=EZ :+$7HUJI 5CS?QEM jdd K Ln *QGD^CF :+$7HUJI 5CS?QEM 4GQE [X
V[ !GA>BGD 5CS?QEM jdIn 0E=WF=EZ +C@FGQGE=?DM jHUn *QGD^CF +C@FGQGE=?DM 4GQE JXVV !GA>BGD 5CS?QEM jdIX
H`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,, 2A 78 ?"@$B1 C' ,>87<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 382/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
QCgA=QCBCDE E? GF>? >AQ@<GQWC PCN=E @GQP EQGD>G@E=?D> _=FF NCDCO=E 1X0X BCQ@<GDE>X 4Q?OC>>?Q
0E=WF=EZ @Q=E=@=ZC> E<C .WQCCBCDE NAE DC\CQ GPPQC>>C> E<=> @CDEQGF gAC>E=?DX " ><?_ E<GE <C
GWQCC> _=E< CG@< CFCBCDE ?O BR C@?D?B=@ GDGFR>=> E<GE FCGP> E? BR @?D@FA>=?DX 4Q?OC>>?Q
!GA>BGD @FG=B> <CQC E<GE 1X0X BCQ@<GDE> _?DYE >AQ@<GQWC @QCP=E @GQP>M GDP >AQ@<GQW=DW @QCP=E
@GQP> _?AFP DC=E<CQ =DPA@C G QCFGE=\C ><=OE ?O EQGD>G@E=?D \?FABC E? PCN=E @GQP> D?Q @QCGEC GDR
SQC>>AQC ?D @QCP=E @GQP DCE_?Q^> E? QCPA@C E<C=Q BCQ@<GDE OCC>X 2AE <C <G> SQC\=?A>FR GWQCCP
_=E< BC ?D E<C>C S?=DE>X !C P=>E=DWA=><C> E<C A>COAFDC>> ?O >AQ@<GQW=DW E? 1X0X BCQ@<GDE> OQ?B
=E> A>COAFDC>> E? BCQ@<GDE> =D .A>EQGF=G NC@GA>C E<C 1X0X BCQ@<GDE >C@E?Q> GQC <=W<FR
@?BSCE=E=\CM NAE <C <G> SQC\=?A>FR GWQCCP E<GE >AQ@<GQW=DW => NCDCO=@=GF C\CD =D @?BSCE=E=\C
BGQ^CE>X
=363
+LKPGQ +DLPF DLK (UYFQDCQGDEEB 9HLK +HFQEB QH 9KLMRDCQF $RDC ,QRKL 1DBJKCQ
9KQRHPF4 #CMEUPGCS &KYGQ +DLPF
[JX
"D BR =D=E=GF PC@FGQGE=?DM " ><?_CP E<GE =E @?>E> 1X0X BCQ@<GDE> >AN>EGDE=GFFR B?QC
_<CD G @A>E?BCQ SGR> O?Q G SAQ@<G>C _=E< G @QCP=E @GQP @?BSGQCP E? E<C >GBC EQGD>G@E=?D SG=P
O?Q A>=DW ?E<CQ SGRBCDE BCE<?P>M =D SGQE=@AFGQM G PCN=E @GQPX .BCQ=@GD ,8SQC>>Y> BCQ@<GDE
OCC>M ?D G\CQGWCM GQC <=W<CQ E<GD E<?>C O?Q +=>@?\CQ 'GQPM :G>ECQ'GQPM GDP 6=>G @QCP=E @GQP>M
NAE CG@< ?O E<?>C KGDP E<C _C=W<ECP G\CQGWC ?O E<CB E?WCE<CQL => >AN>EGDE=GFFR <=W<CQ E<GD E<C
@?>E ?O G@@CSE=DW PCN=E @GQP>XVd )C=E<CQ 4Q?OC>>?Q 0E=WF=EZ D?Q 4Q?OC>>?Q !GA>BGD P=>GWQCC E<GE
@QCP=E @GQP> @?>E BCQ@<GDE> OGQ B?QC E<GD PCN=E @GQP>X
Vd *QGD^CF +C@FGQGE=?DM 4GQE TXH GDP *=WAQC TX
JI
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,8 2A 78 ?"@$B1 C' ,>87E
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 383/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
=383 )Q QRK 2KWKE HI +LKPGQ +DLP -KKF 1LKWDGEGCS GC QRK !CGQKP (QDQKF4 9DCB 9KLMRDCQF DLK
2GZKEB QH (ULMRDLSK +LKPGQ +DLP $LDCFDMQGHCF
[TX "D BR =D=E=GF PC@FGQGE=?DM " C8SFG=DCP E<GE BGDR BCQ@<GDE> GQC F=^CFR E? GP?SE
>AQ@<GQWC> ?D @QCP=E @GQP EQGD>G@E=?D> G> G >EQGECWR O?Q @?S=DW _=E< <=W< @QCP=E @GQP OCC> =D E<=>
@?ADEQRM SGQE=@AFGQFR W=\CD E<C >=WD=O=@GDEFR F?_CQ OCC> =D@AQQCP E? G@@CSE PCN=E @GQP
EQGD>G@E=?D>XVU 4Q?OC>>?Q 0E=WF=EZ GWQCC> _=E< BC E<GE E<C =D@CDE=\C O?Q G BCQ@<GDE E? >AQ@<GQWC
=D@QCG>C> _=E< E<C FC\CF ?O BCQ@<GDE OCC>XVc
=38363 9B 7GK[F )YHUQ QRK 2GZKEGRHHP QRDQ 9KLMRDCQF .GEE (ULMRDLSK +LKPGQ +DLP
$LDCFDMQGHCF 5DWK "HQ +RDCSKP
[[X
4Q?OC>>?Q !GA>BGD @?DECDP> E<GE OC_ 1X0X BCQ@<GDE> GQC F=^CFR E? >AQ@<GQWC
@QCP=E @GQP EQGD>G@E=?D> PAC E? G eNA>=DC>> >ECGF=DWf COOC@E =D _<=@< BCQ@<GDE> E<GE P? D?E
>AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> WG=D @A>E?BCQ> GDP SQ?O=E> OQ?B E<?>C E<GE P?M _<=@<
GF=CDGEC> @QCP=E @GQP @A>E?BCQ>XV` !C >EGEC> E<GE " SQC\=?A>FR GWQCCP _=E< <=> GDGFR>=>XdI -<GE =>
D?E @?QQC@EX 4Q?OC>>?Q !GA>BGD >AWWC>E> E<GE E<C NA>=DC>>7>ECGF=DW =BSCP=BCDE E? >AQ@<GQW=DW
=> SCQBGDCDEM PCECQ> GFB?>E GFF BCQ@<GDE> OQ?B >AQ@<GQW=DW KC\CD GE E<C FC\CF ?O @QCP=E @GQP
BCQ@<GDE OCC> SQC\G=F=DW =D E<C 1D=ECP 0EGEC>LM GDP C>>CDE=GFFR CF=B=DGEC> GDR NCDCO=E> OQ?B E<C
GN=F=ER E? >AQ@<GQWCX " <G\C DC\CQ GWQCCP _=E< E<GE GDGFR>=>X !C @=EC> SGQE ?O G SG>>GWC OQ?B G
SGSCQ ?O B=DC SANF=><CP NR E<C 5C>CQ\C 2GD^ ?O .A>EQGF=G Ke52.fL =D >AWWC>E=DW E<GE " GWQCC E<GE
BCQ@<GDE> GQC ADF=^CFR E? >AQ@<GQWCM NAE =D E<GE SG>>GWC " >GR BCQCFR E<GE >AQ@<GQW=DW => D?E G
*-76'$,$ >?FAE=?D E? E<C FCWG@R ?O GDE=@?BSCE=E=\C COOC@E> ?O E<C 6=>G GDP :G>ECQ'GQP
VU *QGD^CF +C@FGQGE=?DM 4GQE TXJXVc 0E=WF=EZ +C@FGQGE=?DM *)JU K=D E<C @?DEC8E ?O .BCQ=@GD ,8SQC>>9 e
XV` !GA>BGD 5CS?QEM j[UXdI !GA>BGD 5CS?QEM j[dX
JH
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,> 2A 78 ?"@$B1 C' ,>87F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 384/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
B?D?S?F=C> GDP E<C=Q @?DPA@E ?\CQ E<C PC@GPC>M GDP 4Q?OC>>?Q !GA>BGD ?B=E> <GFO ?O G
>CDECD@C =D _<=@< " C8SFG=D E<GE =E => SGQE=@AFGQFR P=OO=@AFE O?Q BCQ@<GDE> E? @?BBAD=@GEC E<C
G\G=FGN=F=ER ?O F?_CQ SQ=@C> A>=DW SGRBCDE BCE<?P> ?E<CQ E<GD @QCP=E @GQP> =O E<C @QCP=E @GQP
DCE_?Q^> <G\C ?E<CQ QAFC> / _<=@< E<CR P=P =D E<C 1D=ECP 0EGEC> / E<GE QC>EQ=@ECP BCQ@<GDE>Y
GN=F=ER E? SQ?B?EC E<C=Q D?D7@QCP=E @GQP SQ=@C>XdH "D E<C SGSCQ @=ECP NR 4Q?OC>>?Q !GA>BGDM "
C8SFG=D GE FCDWE< _<R E<C GN=F=ER E? >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> => GD =BS?QEGDE
@?BSCE=E=\C QCO?QB E<GE NCDCO=E> BCQ@<GDE> GDP E<C SANF=@X
eh'i?BSCE=E=\C SQC>>AQC ?D DCE_?Q^> E? @?D>EQG=D E<C GB?ADE ?O E<C =DECQ@<GDWCOCC => B?QC COOC@E=\C =O G BCQ@<GDE @GD @<??>C E<C DCE_?Q^M QCOFC@E =E> QCFGE=\C
@?>E> =D S?=DE7?O7>GFC >AQ@<GQWC> GDP P=>@?ADE>M ?Q ?E<CQ_=>C COOC@E=\CFR
=DOFACD@C @?D>ABCQ> E? @<??>C E<C BCQ@<GDEY> SQCOCQQCP DCE_?Q^X -<=> => F=^CFR
_<R E<C DCE_?Q^> ?OECD PCECQ ?Q SQ?<=N=E BCQ@<GDE> OQ?B =DOFACD@=DW SGRBCDE
@<?=@C>XfdJ
e,\CD BCQ@<GDE>Y BCQC &#"'",2 E? =BS?>C >AQ@<GQWC> ?D @QCP=E @GQP EQGD>G@E=?D>
@GD <G\C SQ?@?BSCE=E=\C COOC@E>XfdT
e?%-3"#",".4 >AQ@<GQWC> E<CQCO?QC <G> GDE=@?BSCE=E=\C COOC@E>Xfd[
e.FE<?AW< BCQ@<GDE>Y GN=F=ER E? >AQ@<GQWC _=FF D?E SQC\CDE DCE_?Q^> CDE=QCFR
OQ?B A>=DW =DECQ@<GDWC OCC> E? GQE=O=@=GFFR =D@QCG>C BCQ@<GDE OCC>M =E _=FF@?D>EQG=D E<C GB?ADE ?O ?\CQ@<GQWC> =BS?>CP E<Q?AW< =DECQ@<GDWC OCC>XfdV
e-<C GN=F=ER E? >AQ@<GQWC @GD =D@QCG>C E<C DABNCQ ?O BCQ@<GDE> G@@CSE=DW @GQP>M
SQC>>AQC DCE_?Q^> E? QCPA@C BCQ@<GDE OCC>M GDP =DPA@C @?D>ABCQ> E? BG^C
B?QC COO=@=CDE SGRBCDE @<?=@C>Xfdd
dH .FGD 0X *QGD^CFM e-?_GQP> G '?BSCE=E=\C 'GQP 4GRBCDE> :GQ^CESFG@CMf 5C>CQ\C 2GD^ ?O .A>EQGF=G GDP
:CFN?AQDC 2A>=DC>> 0@<??FM 4GRBCDE 0R>ECB 5C\=C_ '?DOCQCD@CM .SQ=F JIIc
K<EES9oo___XQNGXW?\XGAoSGRBCDE>7>R>ECBoQC>?AQ@C>oSANF=@GE=?D>oSGRBCDE>7GAoSGRBE>7>R>7QC\7@?DOoJIIUoV7
@?BSCE7@GQP7SGRBCDEXSPO L Ke*QGD^CF 52. 4GSCQfLM SX VTXdJ *QGD^CF 52. 4GSCQM SX VJX
dT "PXM SX VTXd[ "PXdV "PXdd "PXM SX V[X
JJ
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,7 2A 78 ?"@$B1 C' ,>8D+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 385/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 386/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
[UX
4Q?OC>>?Q !GA>BGD P=>@?ADE> E<C =BS?QEGD@C ?O E<C WQ?_=DW OQG@E=?D ?O
BCQ@<GDE> E<GE <G\C GP?SECP >AQ@<GQW=DW =D .A>EQGF=GX !C D?EC> E<GE =D G SGRBCDE SGDCF >EAPR
?O .A>EQGF=GD <?A>C<?FP> ADPCQEG^CD NR E<C 52.M QC>S?DPCDE> QCS?QECP E<GE E<CR SG=P
>AQ@<GQWC> ?D ?DFR Vs ?O E<C=Q @QCP=E @GQP EQGD>G@E=?D> =D N?E< JIIU GDP JIHIX UH !C @FG=B> E<GE
e=E => E<C \?FABC ?O EQGD>G@E=?D> E<GE GQC >AQ@<GQWCP _<=@< SQ?\=PC> E<C =BS?QEGDE C@?D?B=@
OG@E?QXfUJ " P=>GWQCCX -<C SCQ@CDEGWC ?O BCQ@<GDE> E<GE G@EAGFFR >AQ@<GQWC @QCP=E @GQP> =>
@FCGQFR QCFC\GDE E? G @FG=B E<GE BCQ@<GDE> _=FF D?E >AQ@<GQWC @QCP=E @GQP>X :?QC?\CQM =D
.A>EQGF=GM E<C FGQWC>E BCQ@<GDE> ?NEG=DCP \CQR >AN>EGDE=GF QCPA@E=?D> =D E<C FC\CF ?O E<C=Q @QCP=E
@GQP OCC> >? E<GE E<CR _?AFP .-, >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D>XUT "D GPP=E=?DM BGDR
.A>EQGF=GD BCQ@<GDE> P=OOCQCDE=GFFR >AQ@<GQWCP / =XCXM GSSF=CP >AQ@<GQWC> E? .BCQ=@GD ,8SQC>>
KGDP +=DCQ> 'FAN =O E<CR G@@CSE E<GE FC>> @?BB?DFR G@@CSECP NQGDPL EQGD>G@E=?D> NAE D?E E?
:G>ECQ'GQP ?Q 6=>G @QCP=E @GQP EQGD>G@E=?D> KGDP D?E E? PCN=E @GQP>LX :CQ@<GDE> P=P E<=>
NC@GA>C ?O E<C <=W<CQ BCQ@<GDE OCC> @<GQWCP NR .BCQ=@GD ,8SQC>> GDP +=DCQ> 'FANM GDP BGDR
@A>E?BCQ> A>C D?D7>AQ@<GQWCP @GQP> GE BCQ@<GDE> E<GE >AQ@<GQWCXU[
[cX
4Q?OC>>?Q !GA>BGD >EGEC> E<GE " DCWFC@E E? C8SFG=D E<GE ADPCQ E<C ECQB> ?O E<C
.WQCCBCDEM E<C GB?ADE ?O GDR >AQ@<GQWC ?D .BCQ=@GD ,8SQC>> EQGD>G@E=?D> _=FF <G\C E? CgAGF
E<C GB?ADE E<GE E<C BCQ@<GDE >AQ@<GQWC> :G>ECQ'GQP GDP 6=>G @QCP=E @GQP EQGD>G@E=?D>XUV -?
E<C @?DEQGQRM " PC\?EC 4GQE [XH ?O BR =D=E=GF PC@FGQGE=?D E? E<GE =>>ACX "E => 4Q?OC>>?Q !GA>BGD
_<? DCWFC@E> E? GPPQC>> E<C OG@E E<GE E<C _C=W<ECP G\CQGWC BCQ@<GDE OCC O?Q GFF @QCP=E @GQP
UH !GA>BGD 5CS?QEM jUJXUJ "PX
UT :CQ@<GDE> GQC GF>? B?QC F=^CFR E? >AQ@<GQWC ?Q *%$+"#'2 ,3%$&,$. ,- )/%*3&%4$ E<C B?QC @?BB?D >AQ@<GQW=DWNC@?BC> WCDCQGFFR =D E<C QCEG=F C@?D?BRX
U[ !GA>BGD 5CS?QEM jU[X .BCQ=@GD ,8SQC>> ADPCQE??^ COO?QE> E? @AQN P=OOCQCDE=GF >AQ@<GQW=DW GDPUV !GA>BGD 5CS?QEM jU[X
J[
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,< 2A 78 ?"@$B1 C' ,>8D,
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 387/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
EQGD>G@E=?D> =D E<C 1D=ECP 0EGEC> C8@CCP> E<C .BCQ=@GD ,8SQC>> OCC =D .A>EQGF=GM GDP E<C
G\CQGWC P=OOCQCD@C NCE_CCD @QCP=E @GQP GDP PCN=E @GQP OCC> =D E<C 1D=ECP 0EGEC> >AN>EGDE=GFFR
C8@CCP> E<C P=OOCQCD@C NCE_CCD .BCQ=@GD ,8SQC>> GDP :G>ECQ'GQPo6=>G OCC> =D .A>EQGF=GX
:?QC?\CQM B?>E BCQ@<GDE> =D .A>EQGF=G E<GE >AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> GSSCGQ E? GSSFR
E<C >GBC >AQ@<GQWC E? GFF NQGDP>XUd
[`X
4Q?OC>>?Q !GA>BGD @?DECDP> E<GE E<C _=FF=DWDC>> ?O BCQ@<GDE> E? >AQ@<GQWC
@QCP=E @GQP EQGD>G@E=?D> =D .A>EQGF=G => D?E QCSQC>CDEGE=\C ?O E<C=Q F=^CFR _=FF=DWDC>> E? >AQ@<GQWC
@QCP=E @GQP EQGD>G@E=?D> =D E<C 1D=ECP 0EGEC> NC@GA>C E<CQC => eWQCGECQ @?BSCE=E=?D =D B?>E
QCEG=F >C@E?Q> =D E<C 1X0X E<GD =D .A>EQGF=GXfUU !C @?D@CPC> E<GE G eF=B=ECPf DABNCQ ?O
BCQ@<GDE> _=FF >AQ@<GQWC GDP QC@C=\C GD C@?D?B=@ NCDCO=E OQ?B E<C >CEEFCBCDEM NAE <C G>>ABC>
E<GE E<C>C _=FF NC FGQWC7>=ZC BCQ@<GDE>M GDP E<GE ehBiCQ@<GDE> =D B?QC @?BSCE=E=\C >C@E?Q> GDP
C>SC@=GFFR >BGFF7 GDP BCP=AB7>=ZC BCQ@<GDE> GQC ADF=^CFR E? >AQ@<GQWCXfUc
VIX
" P=>GWQCC E<GE E<C @?BSCE=E=\CDC>> ?O BCQ@<GDE >C@E?Q> BG^C> =E ADF=^CFR E<GE G
>=WD=O=@GDE DABNCQ ?O BCQ@<GDE> _=FF >AQ@<GQWCX "D OG@EM =D E<C )C_ rCGFGDP F=E=WGE=?DM 4Q?OC>>?Q
!GA>BGD GWQCCP E<GE E<CQC => e=DECD>C @?BSCE=E=?D NCE_CCD BCQ@<GDE>f K=XCXM =D )C_
rCGFGDPLMU` RCE <C GQWACP E<GE E<C C\=PCD@C OQ?B .A>EQGF=G _G> e@?DEQGQRf E? GD ?SS?>=DW
Ud -<=> @GD NC >CCD OQ?B E<C UVs ?O .BCQ=@GD ,8SQC>> BCQ@<GDE> E<GE ,G>E t 4GQEDCQ> QCS?QECP GSSF=CP
>AQ@<GQWC> =D JIHI E?WCE<CQ _=E<
UU !GA>BGD 5CS?QEM jUdXUc !GA>BGD 5CS?QEM jj`M c`X "D @=E=DW .A>EQGF=GD PGEGM 4Q?OC>>?Q !GA>BGD O?@A>C> ?D E<C >BGFFCQ ><GQC ?O
EQGD>G@E=?D> >AQ@<GQWCP E<GD BCQ@<GDE> E<GE >AQ@<GQWCM @GA>CP =D SGQE NR E<C FGQWC BCQ@<GDE> ?NEG=D=DW F?_CQ
OCC> D?E >? E<GE E<CR _?AFP D?E >AQ@<GQWCX a<CD SQCP=@E=DW E<C COOC@E> ?O CF=B=DGE=?D ?O D?7>AQ@<GQWC QAFC> =D
E<C 1D=ECP 0EGEC>M <C =D@?D>=>ECDEFR O?@A>C> ?D <=> SQCP=@E=?D E<GE G >BGFF DABNCQ ?O BCQ@<GDE> _=FF >AQ@<GQWCM
PC>S=EC <=> @?DECDE=?D E<GE E<C>C _=FF ECDP E? NC FGQWC BCQ@<GDE>XU` ,\=PCD@C =D QCSFR ?O 4Q?OC>>?Q 3CQQR !GA>BGD KQCPG@ECP ?SCD \CQ>=?DL =D '?BBCQ@C '?BB=>>=?D \X 'GQP> )r
$=B=ECPM CE GFX GDP +0, K)rL $=B=ECPM CE GFX \X 'GQP> )r $=B=ECP CE GFXM [ 0CSECBNCQ JII` Ke!GA>BGD )C_
rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRfLM jUXdX
JV
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,E 2A 78 ?"@$B1 C' ,>8D8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 388/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
C8SCQEY> @FG=B E<GE eBCQ@<GDE> _?AFP NC ADF=^CFR E? >AQ@<GQWC =D )C_ rCGFGDPXfcI "D .A>EQGF=GM
>?BC ?O E<C FGQWC>E BCQ@<GDE> _CQC GNFC E? ?NEG=D >=WD=O=@GDEFR F?_CQ @QCP=E @GQP BCQ@<GDE OCC>
E? ^CCS E<CB OQ?B >AQ@<GQW=DW @QCP=E @GQP>X
cH "D GDR
C\CDEM G> " ><?_CP =D BR =D=E=GF PC@FGQGE=?DM >BGFF7 GDP BCP=AB7>=ZCP BCQ@<GDE>M D?E kA>E FGQWC
BCQ@<GDE>M <G\C GP?SECP >AQ@<GQW=DW =D FGQWC DABNCQ>X "D )C_ rCGFGDPM 4Q?OC>>?Q !GA>BGD
D?ECP C\=PCD@C E<GE e=D )C_ rCGFGDP N?E< EQG\CF GWCDE> GDP @?BSAECQ @?BSGD=C> >AQ@<GQWCP
@QCP=E @GQP EQGD>G@E=?D>M C\CD E<?AW< =E \=?FGECP E<C=Q GWQCCBCDE> _=E< G@gA=QCQ>f GDP E<GE
ehEi<C>C BGQ^CE G@E=?D> QCOAEC E<C @FG=B E<GE ?DFR FGQWC BCQ@<GDE>M _=E< BGQ^CE S?_CQM _=FF
>AQ@<GQWC @QCP=E @GQP EQGD>G@E=?D> =O SCQB=EECP E? P? >?XfcJ
VHX
"D <=> QCS?QE =D :+$7HUJIM =XCXM F=E=WGE=?D GWG=D>E :G>ECQ'GQP GDP 6=>G =D E<C
1D=ECP 0EGEC>M "DP=\=PAGF :CQ@<GDE 4FG=DE=OO C8SCQE +QX 6CFFEAQ? >EGEC> E<GE e
XfcT !C QCF=C> ?D E<C C8SCQ=CD@C =D .A>EQGF=G =D
_<=@< eh c[ $=^C BCM +QX 6CFFEAQ?
QCF=C> ?D E<C FC\CF ?O .BCQ=@GD ,8SQC>> GDP +=DCQ> @FAN OCC> =D .A>EQGF=G GDP E<C OG@E E<GE E<?>C
<=W< OCC> =DPA@C >AQ@<GQW=DW E? >ASS?QE <=> ?S=D=?D> GN?AE :G>ECQ'GQP GDP 6=>G >AQ@<GQWC QAFC>
cI "PXM jdXJJcH
cJ !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM SSX HV7HdXcT 6CFFEAQ? :+$7HUJI 5CS?QEM jJIHXc[ 6CFFEAQ? :+$7HUJI 5CS?QEM jJI[X
Jd
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ ,F 2A 78 ?"@$B1 C' ,>8D>
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 389/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
=D E<C 1D=ECP 0EGEC> @?DEC8EXcV +QX 6CFFEAQ? GPPQC>>CP GDP QCkC@ECP @FG=B> NR ?DC ?O E<C C8SCQE>
O?Q E<C PCOCDPGDE> =D E<GE @G>C E<GE OC_ BCQ@<GDE> _?AFP >AQ@<GQWC NC@GA>C ?O E<C OCGQ E<GE
E<CR _?AFP F?>C @A>E?BCQ> E? D?D7>AQ@<GQW=DW BCQ@<GDE> / =XCXM E<C >GBC @FG=B BGPC <CQC NR
4Q?OC>>?Q !GA>BGDXcd
=383<3 (ULMRDLSGCS GF 9HLK 2GZKEB GC QRK !CGQKP (QDQKF QRDC GC )UFQLDEGD HL QRK !303 DQ
+ULLKCQ 2KWKEF HI 9KLMRDCQ -KKF
VJX
:GDR BCQ@<GDE> @<?>C E? >AQ@<GQWC .BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D> =D
.A>EQGF=G NC@GA>C E<C G\CQGWC .BCQ=@GD ,8SQC>> BCQ@<GDE OCC _G> JXVHs =D JIIT KC\CD GOECQ
eSQC7CBSE=\Cf QCPA@E=?D> =D JIIJM P=>@A>>CP NCF?_LX 2R JIIVM E<C G\CQGWC .BCQ=@GD ,8SQC>>
OCC _G> >E=FF ?\CQ JXTs GDP >AQ@<GQW=DW G@@CFCQGECPX -<C G\CQGWC :G>ECQ'GQP GDP 6=>G
BCQ@<GDE OCC =D .A>EQGF=G _G> FC>> E<GD HXIs NR JIIV KGDP EQCDP=DW F?_CQLM GDP BCQ@<GDE> _CQC
FC>> =D@F=DCP E? GSSFR >AQ@<GQWC> E? E<?>C @GQP>X "D E<C 1D=ECP 0EGEC>M NR @?DEQG>EM BCQ@<GDE
OCC> O?Q GFF ?O E<C BGk?Q NQGDP> ?D G\CQGWC C8@CCP JXTsX -<A>M BCQ@<GDE> <CQC GQC B?QC F=^CFR
E<GD =D .A>EQGF=G E? NC =DECQC>ECP =D >AQ@<GQW=DW GFF ?O E<?>C NQGDP>X
VTX
4Q?OC>>?Q !GA>BGD S?=DE> E? E<C 1D=ECP b=DWP?B _<CQC <C >GR> E<GE >AQ@<GQW=DW
=> =DOQCgACDEXcU !C OG=F> E? D?EC E<GE :G>ECQ'GQP GDP 6=>G =DECQ@<GDWC OCC> GQC OGQ F?_CQ =D E<C
1D=ECP b=DWP?B E<GD =D E<C 1D=ECP 0EGEC>M GDP E<C G\CQGWC BCQ@<GDE OCC O?Q E<?>C NQGDP> =>
GN?AE HX[sXcc :?QC?\CQM E<C 1XbX (OO=@C ?O *G=Q -QGP=DW O?ADP E<GE PC>S=EC E<?>C F?_CQ OCC>M
cV 6CFFEAQ? :+$7HUJI 5CS?QEM jJI[X
cd 5CSFR 5CS?QE ?O +QX '<Q=>E?S<CQ .X 6CFFEAQ?M "D 5C9 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE .DE=EQA>E$=E=WGE=?DM 3ADC JJM JIHIM jHHIX
cU !GA>BGD 5CS?QEM jjcH7cJXcc 0CCM *QGD^CF :+$7HUJI 5CSFR +C@FGQGE=?DM jTJX
JU
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8+ 2A 78 ?"@$B1 C' ,>8D7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 390/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
H[s ?O NA>=DC>>C> =D E<C 1XbX GSSF=CP >AQ@<GQWC> E? @QCP=E @GQP>M GDP `s GSSF=CP >AQ@<GQWC> E?
@<GQWC @GQP>Xc`
=3<3
(ULMRDLSGCS 1KLJGQF 9KLMRDCQF QH *KMHUO QRK +HFQ HI +LKPGQ +DLP 1DBJKCQF &GLKMQEB
-LHJ +UFQHJKLF .RH !FK +LKPGQ +DLPF DCP 1HFQ 2H[KL (RKEI 1LGMKF
V[X
"D BR =D=E=GF PC@FGQGE=?DM " >EGECP E<GE G P=QC@E COOC@E ?O >AQ@<GQW=DW K?QM G>
4Q?OC>>?Q 0E=WF=EZ SAE> =EM eSQ=@=DWf ?O @QCP=E @GQP EQGD>G@E=?D>L => E<GE BCQ@<GDE> E<GE >AQ@<GQWC
@QCP=E @GQP EQGD>G@E=?D> QC@?AS E<C @?>E ?O E<?>C EQGD>G@E=?D> OQ?B @A>E?BCQ> _<? A>C @QCP=E
@GQP> QGE<CQ E<GD OQ?B GFF @A>E?BCQ> WCDCQGFFRX`I " P? D?E NCF=C\C E<GE E<=> =>>AC => =D P=>SAECX
*?Q C8GBSFCM 4Q?OC>>?Q !GA>BGD <G> C8SFG=DCP E<GE ehCi\=PCD@C OQ?B .A>EQGF=G PCB?D>EQGEC>
E<GE >?BC BCQ@<GDE> _=FF FC\R >AQ@<GQWC> O?Q @QCP=E @GQP A>C E? QC@?\CQ E<C hBCQ@<GDE OCC>i
_<CD E<C mD? >AQ@<GQWCY QAFC => CF=B=DGECPXf`H 2R @?DEQG>EM _=E<?AE >AQ@<GQW=DWM BCQ@<GDE>
eQC@?\CQ hE<C BCQ@<GDE OCCi NR =D@QCG>=DW E<C=Q SQ=@C> E? GFF @?D>ABCQ>M _<CE<CQ ?Q D?E E<C
@?D>ABCQ> GQC A>=DW @QCP=E @GQP>Xf`J -<=> => G @CDEQGF E<CBC ?O 4Q?OC>>?Q 0E=WF=EZX`T
VVX "D <=> P=>@A>>=?D ?O eNA>=DC>> >ECGF=DWMf <?_C\CQM 4Q?OC>>?Q !GA>BGD =WD?QC> E<C
OG@E E<GE BCQ@<GDE> >AQ@<GQW=DW @QCP=E @GQP EQGD>G@E=?D> _=FF ECDP E? <G\C F?_CQ S?>ECP SQ=@C>
c` 1D=ECP b=DWP?B (OO=@C ?O *G=Q -QGP=DWM e4GRBCDE 0AQ@<GQWC>9 5C>S?D>C E? E<C a<=@<u 0ASCQ7'?BSFG=DEM 3AFR
JIHJM jVXVX e'<GQWC @GQP>f @?D>=>E ?O .BCQ=@GD ,8SQC>> GDP +=DCQ> 'FANM GDP ,G>E t 4GQEDCQ> QCS?QE> E<GE ?DFR
HIXHs ?O VIV >AQ\CRCP BCQ@<GDE> =D E<C 1D=ECP b=DWP?B G@@CSECP .BCQ=@GD ,8SQC>> ?Q +=DCQ> 'FAN @GQP> =D
JII`X ,G>E t 4GQEDCQ>M e.A>EQGF=GD GDP 1b 'QCP=E 'GQP 0AQ@<GQW=DW 4CQ>SC@E=\C>9 'A>E?B .DGFR>=> O?Q ),5.
.A>EQGF=GMf )?\CBNCQ JII` K!(10-()IIHHJILM -GNFC HUX -<C ,G>E t 4GQEDCQ> >AQ\CR >AWWC>E> E<GE G
>=WD=O=@GDE SCQ@CDEGWC ?O BCQ@<GDE> E<GE G@@CSE .BCQ=@GD ,8SQC>> ?Q +=DCQ> 'FAN @GQP> =D E<C 1XbX GSSFR
>AQ@<GQWC> E? E<?>C @GQP>M NAE E<C SCQ@CDEGWC ?O BCQ@<GDE> E<GE G@@CSE @<GQWC @GQP> => ?DFR Q?AW<FR >AWWC>ECP
NR E<C ,G>E t 4GQEDCQ> QCS?QEM _<=@< O?ADP ?DFR VH 1XbX BCQ@<GDE> E<GE G@@CSECP .BCQ=@GD ,8SQC>> ?Q +=DCQ>
'FAN =D GPP=E=?D E? :G>ECQ'GQP GDP 6=>GM H` ?O _<=@< KTUXTsL GSSF=CP >AQ@<GQWC>X "PXM -GNFC JIX K,G>E t
4GQEDCQ> >EGEC> E<GE E<=> QCS?QECP SCQ@CDEGWC => eO?Q =DP=@GE=\C SAQS?>C> ?DFRf GDP D?E F=^CFR QCF=GNFC G> G
>SC@=O=@ SCQ@CDEGWCXL`I *QGD^CF +C@FGQGE=?DM jj[V7[dX`H !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jVXJX
`J !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jdXHJX`T 0CCM CXWXM 0E=WF=EZ +C@FGQGE=?DM jJT K_=E< E<C )+4 =D SFG@C
LX
Jc
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8& 2A 78 ?"@$B1 C' ,>8DD
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 391/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
E<GD BCQ@<GDE> E<GE P? D?E >AQ@<GQWCM E<CQCNR BG^=DW GPP=E=?DGF >GFC> GDP SQ?O=E> E?
@A>E?BCQ> _<? P? D?E A>C @QCP=E @GQP> K=XCXM eNA>=DC>> >ECGF=DWf =D E<C ?E<CQ P=QC@E=?DLX`[
=3=3
9DCB +UFQHJKLF .GEE *KDMQ QH +LKPGQ +DLP (ULMRDLSKF YB !FGCS 2H[KL +HFQ
)EQKLCDQGWKF DQ 9KLMRDCQF QRDQ (ULMRDLSK4 *KPUMGCS +HFQF DCP 1LGMKF
=3=363 "DLLH[ *KEKWDCQ 9DLZKQF &H "HQ #JOEB $RDQ +LKPGQ +DLP (ULMRDLSKF +DCCHQ
(RGIQ $LDCFDMQGHC 7HEUJK QH &KYGQ +DLPF
VdX
.BCQ=@GD ,8SQC>>M :G>ECQ'GQPM GDP 6=>G <G\C GFF CDO?Q@CP GDE=7>ECCQ=DW QAFC>M
=D@FAP=DW =BS?QEGDEFR D?7>AQ@<GQWC QAFC>M _<=@< <G\C =BSCPCP @?BSCE=E=?D NCE_CCD E<CB GE
E<C S?=DE ?O >GFCX 4Q?OC>>?Q 0E=WF=EZM +QX 6CFFEAQ?M 4Q?OC>>?Q !GA>BGDM GDP " GFF GWQCC E<GE B?>E
BCQ@<GDE> E<GE G@@CSE :G>ECQ'GQPM 6=>GM GDP .BCQ=@GD ,8SQC>> @GQP> O=DP =E DC@C>>GQR E? G@@CSE
E<?>C @GQP> PC>S=EC >ASQG@?BSCE=E=\C FC\CF> ?O OCC> O?Q GFF ?O E<?>C DCE_?Q^> NC@GA>C ?O E<C F?>>
?O EQGD>G@E=?D \?FABC / GDP E<A> SQ?O=E> / _<=@< _?AFP NC =D@AQQCP =O E<C BCQ@<GDE> >E?SSCP
G@@CSE=DW GDR ?O E<?>C NQGDP>X :?QC?\CQM G> " C8SFG=DCP =D 4GQE TXHM _C GQC =D GWQCCBCDE E<GE
OQ?B GD C@?D?B=@ SCQ>SC@E=\C KNC@GA>C BCQ@<GDE> <G\C D?E NCCD GNFC E? ><=OE EQGD>G@E=?D>
C\CD OQ?B ?DC ?O E<?>C @QCP=E @GQP DCE_?Q^> E? GD?E<CQLM ?DC @GD PCO=DC >CSGQGEC QCFC\GDE
BGQ^CE> O?Q CG@< ?O E<?>C NQGDP> ?O @QCP=E @GQP>X
VUX -<C C@?D?B=@ >ASS?QE O?Q E<C C8=>ECD@C ?O NQGDP7>SC@=O=@ QCFC\GDE BCQ@<GDE
@QCP=E @GQP BGQ^CE> P?C> .-, BCGD E<GE P=OOCQCDE=GF >AQ@<GQWC>M O?Q C8GBSFCM ?D B?QC @?>EFR
.BCQ=@GD ,8SQC>> @GQP> _?AFP D?E =DPA@C G >=WD=O=@GDE DABNCQ ?O @?D>ABCQ> E? @<??>C =D>ECGP
E? A>C G F?_CQ @?>E NQGDP ?O @QCP=E @GQPX -<C ?NkC@E?Q>M 4Q?OC>>?Q 0E=WF=EZM GDP 4Q?OC>>?Q
!GA>BGDM =D OG@EM GFF S?=DE E? E<C @?DE=DACP SQ?<=N=E=?D ?O P=OOCQCDE=GF >AQ@<GQWC> ADPCQ E<C
ECQB> ?O E<C .WQCCBCDE G> <G\=DW SQC@=>CFR E<GE COOC@EX -<C @ABAFGE=\C COOC@E> ?O E<C @GQP
`[ *QGD^CF +C@FGQGE=?DM j[UX
J`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8, 2A 78 ?"@$B1 C' ,>8D<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 392/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
DCE_?Q^>Y SQ?<=N=E=?D> ?D SQ=@C P=OOCQCDE=GF> KGDP ?E<CQ O?QB> ?O =DECQNQGDP >ECCQ=DWL GQC E<C
BG=D QCG>?D> _<R ?DC @GD PCO=DC NQGDP7>SC@=O=@ QCFC\GDE BGQ^CE>X 4Q?OC>>?Q 0E=WF=EZ GDP +QX
6CFFEAQ? CBS<G>=ZC E<GE E<C QCFC\GDE BGQ^CE _?AFP <G\C NCCD NQ?GPCQ =D G NAE7O?Q _?QFP =D
_<=@< E<C GDE=7>ECCQ=DW QAFC> <GP D?E NCCD =D COOC@EX`V
VcX %CE E<C )GE=?DGF 5CEG=F *CPCQGE=?D QCF=C> ?D E<C C8=>ECD@C ?O >CSGQGEC QCFC\GDE
@QCP=E @GQP GDP PCN=E @GQP GDE=EQA>E BGQ^CE> K=D E<C SQC>CD@C ?O GDE=7>ECCQ=DW QAFC>L E? @FG=B =E =>
G eOGFFG@Rf E? @?D@FAPC E<GE >AQ@<GQWC> ?D @QCP=E @GQP> _=FF @GA>C G QCFGE=\C ><=OE ?O EQGD>G@E=?D
\?FABC E? PCN=E @GQP>X`d -<C '?D>EGDE=DC 'GDD?D (NkC@E?Q> F=^C_=>C @=EC E<C C8=>ECD@C ?O
>CSGQGEC QCFC\GDE BGQ^CE> O?Q @QCP=E @GQP> GDP PCN=E @GQP> E? @FG=B =E => G eOGAFER SQCB=>Cf E<GE
E<C .WQCCBCDE _=FF GFF?_ BCQ@<GDE> E? >ECCQ EQGD>G@E=?D> OQ?B @QCP=E @GQP> E? PCN=E @GQP>X`U
V`X
-<C>C =DOCQCD@C> @GDD?E NC PQG_D OQ?B E<C C8=>ECD@C ?O >CSGQGEC QCFC\GDE @QCP=E
@GQP GDP PCN=E @GQP BGQ^CE>X
dIX
$=^C 4Q?OC>>?Q 0E=WF=EZ GDP +QX 6CFFEAQ?M BR GDGFR>=> ?O E<C <=>E?QR ?O SGRBCDE
>R>ECB> =D E<C 1D=ECP 0EGEC> <G> FCP BC E? @?D@FAPC E<GE =D G NAE7O?Q _?QFP =D _<=@< @GQP
SGRBCDE DCE_?Q^> <GP D?E ?SCQGECP _=E< GDE=@?BSCE=E=\C QC>EQG=DE>M E<C QCFC\GDE BGQ^CE
_?AFP F=^CFR NC NQ?GPCQ E<GD =E => =D E<C G@EAGF _?QFP E?PGRX -<GE => D?E E? >GR E<GE QCB?\=DW E<C
SQ?<=N=E=?D ?D @QCP=E @GQP >AQ@<GQW=DW ,-+&2 _=FF =BBCP=GECFR @QCGEC G NQ?GPCQ QCFC\GDE BGQ^CEX
"DPCCPM C\CD =O _=PC>SQCGP @QCP=E @GQP >AQ@<GQW=DW ADPCQ E<C >CEEFCBCDE _CQC E? @GA>C WQCGE
`V *?Q C8GBSFCM =D :+$7HUJIM 4Q?OC>>?Q 0E=WF=EZ C8SFG=DCP E<GE
0E=WF=EZ :+$7HUJI 5CS?QEM jd`X`d )5* 0EGECBCDE ?O (NkC@E=?D>M SX cX`U '' 2Q=COM SX THX
TI
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 88 2A 78 ?"@$B1 C' ,>8DE
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 393/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
DABNCQ> ?O @?D>ABCQ> E? >_=E@< E? PCN=EM E<GE >E=FF _?AFP D?E DC@C>>GQ=FR =BSFR G NQ?GPCQ
QCFC\GDE BGQ^CEX`c
dHX
-?PGRM BCQ@<GDE> A>C NFCDPCP ?Q eNADPFCPf SQ=@=DW =D _<=@< @A>E?BCQ> A>=DW
<=W< @?>E @QCP=E @GQP> GDP F?_ @?>E PCN=E @GQP> GFF SGR E<C >GBC QCEG=F SQ=@CX :?QC?\CQM G>
4Q?OC>>?Q 0E=WF=EZ GDP 4Q?OC>>?Q !GA>BGD D?ECM @QCP=E @GQP =>>ACQ> A>C >?BC ?O E<C=Q BCQ@<GDE
OCC QC\CDAC E? ?OOCQ QCNGEC> GDP ?E<CQ eQC_GQP>f K=XCXM DCWGE=\C SQ=@C>L E? @QCP=E @GQP A>CQ>M >?
E<GE @?D>ABCQ> GQC SQ?\=PCP _=E< GD =D@CDE=\C E? A>C E<C B?QC @?>EFR SGRBCDE BCE<?PX "O G
BCQ@<GDE eADNADPFC>f E<C>C SQ=@C>M E<C DCE SQ=@C O?Q @QCP=E @GQP @A>E?BCQ> _=FF =D@QCG>C GDP
E<C DCE SQ=@C O?Q PCN=E @GQP @A>E?BCQ> KGDP @G>< @A>E?BCQ>L _=FF PC@QCG>CX ,\CD =D E<C ADF=^CFR
>@CDGQ=? E<GE D? @A>E?BCQ >_=E@<CP OQ?B A>=DW G @QCP=E @GQP E? A>=DW G PCN=E @GQPM NG>=@
C@?D?B=@ SQ=D@=SFC> =BSFR E<GE BCQ@<GDE> _=FF =D@QCG>C E<C=Q >GFC> E? PCN=E @GQP GDP @G><
@A>E?BCQ> GDP QCPA@C E<C=Q >GFC> E? @QCP=E @GQP @A>E?BCQ>X
dJX
(O @?AQ>CM GFB?>E GFF @?D>ABCQ> _<? S?>>C>> G @QCP=E @GQP GF>? S?>>C>> G PCN=E
@GQP GDP B?>E A>C G PCN=E @GQP O?Q GE FCG>E >?BC EQGD>G@E=?D>M GDPM G> 4Q?OC>>?Q 0E=WF=EZ <G>
C8SFG=DCPM E<C SQ?S?QE=?D ?O EQGD>G@E=?D> O?Q _<=@< =E _=FF NC ?SE=BGF O?Q @GQP<?FPCQ> E? A>C
E<C=Q @QCP=E @GQP> _=FF ECDP E? PC@F=DC GDP E<C SQ?S?QE=?D O?Q _<=@< =E _=FF NC ?SE=BGF E? A>C E<C=Q
`c '?D\CDE=?DGF QCFC\GDE BGQ^CE PCO=D=E=?D BCE<?P> @GD NC @?DOA>=DW =D E<=> @?DEC8E NC@GA>C @?D>ABCQ> ?OECD
OG@C D? SQ=@C ?Q G DCWGE=\C SQ=@C KPAC E? QC_GQP>L GDP >AQ@<GQWC> GQC ?OECD C8SQC>>CP =D SCQ@CDEGWC ECQB>X
'?D\CQE=DW E? P?FFGQ> >=BSF=O=C> E<C S?=DEX 0ASS?>C G lHII SAQ@<G>C WCDCQGEC> G QC_GQP _?QE< lH E? G
@?D>ABCQM >? E<GE E<C SQ=@C E? A>C G @QCP=E @GQP => 7lHX "O G BCQ@<GDE @<GQWC> G lJ >AQ@<GQWC O?Q A>C ?O G @QCP=E
@GQPM E<C DC_ SQ=@C E? E<C @GQP<?FPCQ => vlHM G @<GDWC ?O vJIIs ". ,3$ 6%"*$ ,- ,3$ *&%+3-'+$% ,- /)$ & *%$+",
*&%+ / C\CD E<?AW< E<GE >AQ@<GQWC => ?DFR Js ?O E<C SQ=@C ?O E<C =ECB> SAQ@<G>CP OQ?B E<C BCQ@<GDEX -<C DCE
SQ=@C E? E<C BCQ@<GDE <G> PC@QCG>CP NR Q?AW<FR HIIs NC@GA>C E<C BCQ@<GDE OCC => ?OO>CE NR E<C >AQ@<GQWC
QC\CDACX . Vs ?Q HIs =D@QCG>C =D E<C SQ=@C ?O G @QCP=E @GQP EQGD>G@E=?D E? G @GQP<?FPCQ K=XCXM G @?D\CDE=?DGF
BGQ^CE PCO=D=E=?D E<QC><?FP =D@QCG>CL _?AFP NC WCDCQGECP NR G >AQ@<GQWC ?O ?DFR IXIVs E? IXHIs ?D E<C?\CQGFF SAQ@<G>C GB?ADEX "D ?E<CQ _?QP>M ?DFR =O \CQR >BGFF >AQ@<GQWC> _CQC >AOO=@=CDE E? @GA>C @QCP=E @GQP
DCE_?Q^> E? QCPA@C E<C=Q OCC> E? E<C FC\CF ?O PCN=E @GQP OCC> _?AFP E<C E_? F=^CFR NC =D E<C >GBC QCFC\GDE
BGQ^CE OQ?B E<C SCQ>SC@E=\C ?O BCQ@<GDE>X
TH
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8> 2A 78 ?"@$B1 C' ,>8DF
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 394/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
PCN=E @GQP> _=FF ECDP E? =D@QCG>CX -<=>M E??M => NG>=@ C@?D?B=@>X -<=> >AN>E=EAE=?D =D E<C OG@C ?O
>AQ@<GQWC> P?C> D?E <G\C E? NC >? WQCGE G> E? =BSFR G >=DWFC QCFC\GDE GDE=EQA>E BGQ^CE @?D>=>E=DW
?O @QCP=E @GQP GDP PCN=E @GQP DCE_?Q^ >CQ\=@C> E?WCE<CQ =D ?QPCQ O?Q >AQ@<GQW=DW E? NCDCO=E
BCQ@<GDE>X a=E< G @QCP=E @GQP >AQ@<GQWCM CG@< EQGD>G@E=?D E<GE B=WQGEC> E? G PCN=E @GQP >G\C>
E<C BCQ@<GDE @?>E>M GDP CG@< EQGD>G@E=?D BGPC A>=DW G @QCP=E @GQP WCDCQGEC> GPP=E=?DGF
QC\CDAC E? ?OO>CE GE FCG>E >?BC ?O E<C C8EQG @?>E G>>?@=GECP _=E< @QCP=E @GQP>X
=3=383 1LHIKFFHLF (QGSEGQT DCP 5DUFJDC 5DWK )SLKKP QRDQ +LKPGQ +DLP (ULMRDLSKF (RGIQ
(HJK +LKPGQ +DLP $LDCFDMQGHCF QH &KYGQ +DLPF
dTX 4Q?OC>>?Q 0E=WF=EZ GDP 4Q?OC>>?Q !GA>BGD CBS<G>=ZC <?_ P=OOCQCDE=GF >AQ@<GQWC>
?D B?QC @?>EFR @QCP=E @GQP> K>A@< G> .BCQ=@GD ,8SQC>> @GQP> =D .A>EQGF=GL _=FF ECDP E? @GA>C G
><=OE =D A>C E?_GQP> F?_CQ @?>E @QCP=E @GQP>X " GWQCCX 2AE NR E<C >GBC E?^CDM >AQ@<GQWC> ?D GFF
@QCP=E @GQP> _=FF @GA>C >?BC @A>E?BCQ> E? >_=E@< E? PCN=E @GQP> O?Q >?BC EQGD>G@E=?D>X "D OG@EM
4Q?OC>>?Q 0E=WF=EZ GDP 4Q?OC>>?Q !GA>BGD <G\C SQC\=?A>FR GWQCCP _=E< BC E<GE @QCP=E @GQP
>AQ@<GQWC> PQ=\C EQGD>G@E=?D \?FABC E? D?D7>AQ@<GQWCP @GQP>M ".*'/+".4 +$#", *&%+)X "D <=>
:+$7HUJI QCS?QE> @?D@CQD=DW :G>ECQ'GQP GDP 6=>G GDE=7>ECCQ=DW QAFC>M 4Q?OC>>?Q 0E=WF=EZ
QCSCGECPFR C8SFG=DCP E<GE BCQ@<GDE QC>EQG=DE> K=D@FAP=DW D?7>AQ@<GQWC QAFC>L SQC\CDECP GD
COO=@=CDE B=WQGE=?D ?O >?BC @QCP=E @GQP EQGD>G@E=?D> E? PCN=E @GQP>X
``
`` 0E=WF=EZ :+$7HUJI 5CS?QEM j[JX
TJ
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 87 2A 78 ?"@$B1 C' ,>8<+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 395/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
fHII
fHIH
fHIJ
fHIT
fHI[
HII 0E=WF=EZ :+$7HUJI 5CS?QEM jdcXHIH 0E=WF=EZ :+$7HUJI 5CS?QEM jUTXHIJ 0E=WF=EZ :+$7HUJI 5CS?QEM jcH K@=E=DW 5C>CQ\C 2GD^ ?O .A>EQGF=GM 5CO?QB ?O .A>EQGF=GY> 4GRBCDE> 0R>ECB9
4QCF=B=DGQR '?D@FA>=?D> ?O E<C JIIUoIc 5C\=C_ H7J K.SQX JIIcLXHIT 0E=WF=EZ :+$7HUJI 5CS?QEM jcJ K@=E=DW )CCF=C bQ?C>M ,AQX '?BBYQ O?Q '?BSCE=E=?D 4?F=@RM 0SCC@< GE E<C
,AQ?SCGD 5CEG=F 5?ADP -GNFC '?DOCQCD@C9 ,AQ?SCY> 4GRBCDE 0R>ECB> GOECQ E<C :G>ECQ'GQP +C@=>=?D K3GD H[MJIIcLLX
HI[ 5CSFR 5CS?QE ?O 3?>CS< 0E=WF=EZM 4<X+XM "D 5C9 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE .DE=EQA>E $=E=WGE=?DM
3ADC JJM JIHIM SX dTX
TT
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8D 2A 78 ?"@$B1 C' ,>8<&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 396/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
d[X
"D <=> QCS?QE =D E<C .BCQ=@GD ,8SQC>> F=E=WGE=?DM 4Q?OC>>?Q 0E=WF=EZ _Q=EC>9
HIV
HId
dVX "D )C_ rCGFGDPM F=^C <CQCM 4Q?OC>>?Q !GA>BGD PCO=DCP >CSGQGEC @QCP=E @GQP GDP
PCN=E @GQP BGQ^CE>XHIU %CE <C GF>? C8SFG=DCP E<GE @QCP=E @GQP >AQ@<GQWC> =D \GQ=?A> S?>>=NFC
>@CDGQ=?> 8-/'+ *&/)$ )-7$ *%$+", *&%+ ,%&.)&*,"-. 5-'/7$ ,- 7"4%&,$ ,- +$#", *&%+) K@GFFCP
e,*-4(0f @GQP> =D )C_ rCGFGDPLX
e-<C FCG>E @?>E G@@CSEGD@C \C<=@FC O?Q BGDR BCQ@<GDE> => ,*-4(0X -<C A>C ?O ,*-4(0
_=FF =D@QCG>C =O >AQ@<GQWC> GQC FC\=CP ?D @QCP=E @GQP EQGD>G@E=?D>X .F>?M " _?AFP C8SC@E
E<C A>GWC ?O @QCP=E @GQP> _=E< F?_CQ hBCQ@<GDE OCC>i E? =D@QCG>C NC@GA>C >AQ@<GQWC> ?D
E<?>C @GQP> _?AFP NC F?_CQ E<GD E<C >AQ@<GQWC> ?D @GQP> _=E< <=W<CQ hBCQ@<GDE
OCC>iXfHIc
eh,i@?D?B=@ GDGFR>=> _?AFP ERS=@GFFR O=DP E<GE BCQ@<GDE> _=E< BGQ^CE S?_CQ _?AFP
=D@QCG>C SQ=@C> GN?\C E<C @?BSCE=E=\C FC\CF E? GFF @A>E?BCQ>M D?E ?DFR @QCP=E @GQP
@A>E?BCQ> _<? @?AFP CG>=FR ><=OE E? G @?BSCE=DW SGRBCDE O?QBM CXWXM ,*-4(0XfHI`
e" @?D>=PCQ E<C F=^CFR ?AE@?BC =O E<C h<?D?Q GFF @GQP>i QAFC QCBG=D> NAE E<C D? >AQ@<GQWC
GDP D? P=>@Q=B=DGE=?D QAFC> GQC CF=B=DGECP GF?DW _=E< E<C hBAFE=FGECQGF =DECQ@<GDWC OCCiX
" C8SC@E GD =D@QCG>C =D @?BSCE=E=?D @?BSGQCP E? E<C @AQQCDE >=EAGE=?D NC@GA>C
BCQ@<GDE> _=FF FC\R K<=W<CQL >AQ@<GQWC> ?D @QCP=E @GQP> _=E< <=W< hBCQ@<GDE OCC>i >? F?DW
G> BCQ@<GDE G@gA=QCQ> ADNADPFC E<C=Q hBCQ@<GDE OCC>iq :CQ@<GDE> _=FF GF>? GEECBSE E?
>ECCQ @?D>ABCQ> E? E<C A>C ?O F?_CQ @?>E SGRBCDE ?SE=?D> >A@< G> ,*-4(0 ?Q @QCP=E
@GQP> _=E< F?_CQ hBCQ@<GDE OCC>iXfHHI
HIV 0E=WF=EZ 5CS?QEM SX H`XHId 0E=WF=EZ 5CS?QEM jJ`X
HIU !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jj[X[7[XdM [XHJM [XH[XHIc !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jVXJ KSX HULXHI` !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM SSX Td7TUXHHI !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jdXT`X
T[
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8< 2A 78 ?"@$B1 C' ,>8<,
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 397/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
eh"i <G\C P=>@A>>CP <?_ E<C GWQCCBCDE GB?DW E<C NGD^> E? CDO?Q@C E<C 6=>G GDP
:G>ECQ'GQP QAFC> FCGP> E? GDE=7@?BSCE=E=\C QC>EQ=@E=?D>M CXWX E<C D? >AQ@<GQWC QAFCM ?DS?>>=NFC BCQ@<GDE >EQGECW=C> E? @GA>C @?D>ABCQ> E? A>C F?_CQ @?>E SGRBCDE ?SE=?D>M
CXWX ,*-4(0 @GQP>X -<C>C 6=>G GDP :G>ECQ'GQP QAFC> FCGP E? <=W<CQ COOC@E=\C :0*> SG=P
NR BCQ@<GDE>XXX " O=DP E<GE =D E<C @?ADECQOG@EAGF> =O E<C GWQCCBCDE E? CDO?Q@C >?BC ?Q GFF
?O E<C QAFC> => CF=B=DGECPM E<C C8SC@ECP ?AE@?BC => G QCPA@E=?D =D E<C :0*> SG=P NR
BCQ@<GDE> =D E<C G@gA=Q=DW BGQ^CEM _<=@< => G SQ?7@?BSCE=E=\C ?AE@?BCXfHHH
ea=E< F?_CQ h=DECQ@<GDWC OCC>iM B?QC @?D>ABCQ> _?AFP =D>ECGP A>C ,*-4(0 ?Q @G>< >?
BCQ@<GDE>Y @?>E> _?AFP NC F?_CQXfHHJ
e"D <=> OAQE<CQ P=>@A>>=?D ?O >AQ@<GQW=DW G> OQCC7Q=P=DWq 4Q?OX aQ=W<E DCWFC@E> E? EG^C
=DE? G@@?ADE E<GE BGDR @?D>ABCQ> @GQQR B?QC E<GD ?DC @QCP=E @GQP _<=@< E<CR @GD
>_=E@< E? ?Q A>C E<C=Q ,*-4(0 @GQPXfHHT
e4Q?OX aQ=W<E >EGEC> E<GE _=E<?AE E<C D? >AQ@<GQWC QAFC GDP !.' QAFC =DECQ@<GDWC OCC>
B=W<E NC@?BC DCWGE=\Cq -<=> ?AE@?BC <G> D?E NCCD ?N>CQ\CP =D @?ADEQ=C> _<CQC E<C
D? >AQ@<GQWC QAFC <G> NCCD CF=B=DGECPX *AQE<CQM E<C @?>E ?O A>=DW @QCP=E @GQP> _?AFP
=D@QCG>CM C>SC@=GFFR O?Q EQGD>G@E?Q>M =XCX @QCP=E @GQP A>CQ> _<? P? D?E <G\C G @QCP=E
NGFGD@CX :GDR ?O E<C>C @QCP=E @GQP A>CQ> _?AFP >_=E@< E? ,*-4(0XfHH[
e"O BCQ@<GDE> <G\C E<C GN=F=ER E? >ECCQ ?Q >AQ@<GQWC =DP=\=PAGF =>>ACQ>M E<CR _=FF C>EGNF=><
>ECCQ=DW S?F=@R ?Q >CE >AQ@<GQWC> E? ?OO>CE GD GEECBSE NR GD =>>ACQ E? @<GQWC <=W<CQ
=DECQ@<GDWCX .> CF>C_<CQC =D <=> NQ=COM 4Q?OX aQ=W<E OG=F> E? EG^C =DE? G@@?ADE E<GE BGDR
SC?SFC @GQQR B?QC E<GD ?DC @QCP=E @GQP GDP GFB?>E GFF @QCP=E @GQP A>CQ> GF>? <G\C GD
,*-4(0 @GQPX 'A>E?BCQ> _<? P? D?E _GDE E? SGR E<C >AQ@<GQWC _=FF >_=E@< E? GD?E<CQ
@QCP=E @GQP ?Q A>C E<C=Q ,*-4(0 @GQPXfHHV
e:CQ@<GDE> _?AFP C>EGNF=>< >ECCQ=DW S?F=@=C> GDPo?Q >CE G <=W< >AQ@<GQWC OCC ?D E<C
W=\CD =>>ACQ>w EQGD>G@E=?D> _<=@< _?AFP @GA>C @QCP=E @GQP A>CQ> E? >_=E@< E? GD?E<CQ
@QCP=E @GQP ?Q E? A>C ,*-4(0XfHHd
ddX
"D ><?QEM E<C>C C8SCQE> GDP " GWQCC N?E< E<GE E<CQC GQC DGQQ?_ QCFC\GDE BGQ^CE>
=D E<C G@EAGF _?QFP =D _<=@< >AQ@<GQW=DW <G> NCCD SQ?<=N=ECPM GDP E<GE _<CD BCQ@<GDE> GQC
GNFC E? >AQ@<GQWC @QCP=E @GQP>M GE FCG>E >?BC @QCP=E @GQP EQGD>G@E=?D \?FABC _=FF B=WQGEC E?
PCN=E @GQP>M NCDCO=EE=DW BCQ@<GDE>X 4?>ECP KPCN=E @GQP GDP @G><L SQ=@C> _=FF ECDP E? NC F?_CQ
HHH !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jUXHXHHJ !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRM j[XTX
HHT !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRM jdXHdXHH[ !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRM j`XdXHHV !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRM j`XUXHHd !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@C =D 5CSFRM j`XcX
TV
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8E 2A 78 ?"@$B1 C' ,>8<8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 398/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
GDP @QCP=E @GQP SQ=@C> K_=E< E<C >AQ@<GQWCL <=W<CQM NAE E<C QCFGE=\C ><=OE ?O >?BC EQGD>G@E=?D
\?FABC OQ?B @QCP=E E? PCN=E _=FF BCGD F?_CQ G\CQGWC @?>E> ?\CQGFF KGDP E<A> WQCGECQ >GFC>LM C\CD
GSGQE OQ?B GDR QCPA@E=?D =D E<C FC\CF ?O @QCP=E @GQP BCQ@<GDE OCC QGEC>X
=3=3<3
) *KMKCQ ,CKV/KDL +RDCSK GC +LKPGQ DCP &KYGQ +DLP 7HEUJK GC )UFQLDEGD &HKF
"HQ &GFOLHWK $RK !FKIUECKFF HI (ULMRDLSKF DQ (QKKLGCS QH &KYGQ
dUX
4Q?OC>>?Q !GA>BGD @FG=B> <CQC E<GE >AQ@<GQW=DW ?O @QCP=E @GQP> <G> D?E eFCP E? G
>=WD=O=@GDE ><=OE E? PCN=E @GQP> =D .A>EQGF=GXfHHU !=> \=C_ => D?E ><GQCP NR E<C 5C>CQ\C 2GD^ ?O
.A>EQGF=G ?Q NR E<C .A>EQGF=G 4GRBCDE 'FCGQ=DW .>>?@=GE=?D K.4'.LM G> " @=ECP =D BR =D=E=GF
PC@FGQGE=?DXHHc 4Q?OC>>?Q !GA>BGD P=>@?ADE> BR @=EGE=?D E? E<C>C ?N>CQ\CQ> G> e>CFC@E=\C
gA?EC>f NAE <C SQC>CDE> D? @?DEQGP=@E?QR \=C_> NR ?E<CQ .A>EQGF=GD ?N>CQ\CQ>XHH` !C >AWWC>E>
E<GE GD CBS=Q=@GF EC>E ?O _<CE<CQ @QCP=E @GQP >AQ@<GQW=DW <G> FCP E? G >=WD=O=@GDE ><=OE E? PCN=E
@GQP A>GWC => G @?BSGQ=>?D ?O E<C eWQ?_E< QGEC ?O E<C P?FFGQ GB?ADE ?O @QCP=E7@GQP A>GWCf _=E<
E<GE ?O ePCN=E7@GQP A>GWC =D .A>EQGF=G ?\CQ E<C >GBC SCQ=?PXfHJI !C QCS?QE> E<GE @QCP=E @GQP
P?FFGQ @<GQWC \?FABC =D@QCG>CP NR HIXJs NCE_CCD +C@CBNCQ JIHJ GDP +C@CBNCQ JIHTM GDP
E<GE WQ?_E< QGEC _G> E<C <=W<C>E =D E<C SG>E >=8 RCGQ>X *AQE<CQM <C QCS?QE> E<GE E<C WQ?_E< QGEC
?O @QCP=E @GQP @<GQWC \?FABC C8@CCPCP E<C =D@QCG>C =D PCN=E @GQP @<GQWC \?FABC PAQ=DW E<C
>GBC E_CF\C B?DE< SCQ=?PXHJH
HHU !GA>BGD 5CS?QEM jUcXHHc *QGD^CF +C@FGQGE=?DM jVdX -<C 52. => E<C @?ADEQRY> @CDEQGF NGD^X -<C .4'. PC>@Q=NC> =E>CFO G> eE<C >CFO7
QCWAFGE?QR N?PR O?Q .A>EQGF=GY> SGRBCDE> =DPA>EQRX .4'. <G> `I BCBNCQ> =D@FAP=DW .A>EQGF=GY> FCGP=DW
O=DGD@=GF =D>E=EAE=?D>M BGk?Q QCEG=FCQ> GDP ?E<CQ SQ=D@=SGF SGRBCDE> >CQ\=@C SQ?\=PCQ>Xf
<EES9oo___XGS@GX@?BXGAoGN?AE7GS@G HH` !GA>BGD 5CS?QEM jUcXHJI "PXHJH "PX
Td
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 8F 2A 78 ?"@$B1 C' ,>8<>
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 399/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
dcX
" GB OGB=F=GQ _=E< E<C PGEG QCF=CP ?D NR 4Q?OC>>?Q !GA>BGD O?Q E<=> GDGFR>=>M
_<=@< GQC SANF=><CP NR E<C 52.X " <G\C C8ECDPCP <=> GDGFR>=> =D E_? _GR>X *=Q>EM QGE<CQ E<GD
O?@A> ?D G >=DWFC HJ7B?DE< SCQ=?P CDP=DW =D +C@CBNCQ JIHT / G PC@GPC GOECQ E<C CF=B=DGE=?D ?O
D?7>AQ@<GQWC QAFC> =D .A>EQGF=G / " <G\C QCSF=@GECP <=> @?BSAEGE=?D O?Q CG@< SCQ=?P CDP=DW =D
+C@CBNCQ ?O CG@< ?O E<C G\G=FGNFC SQC\=?A> RCGQ> G> _CFFX " ><?_ E<C QC>AFE =D *=WAQC HX 0C@?DPM
=D>ECGP ?O O?@A>=DW ?DFR ?D RCGQ7?\CQ7RCGQ @<GDWC> O?Q CG@< +C@CBNCQM " <G\C @?BSAECP E<C
GWWQCWGEC P?FFGQ @<GQWC \?FABC ?D PCN=E @GQP> =D .A>EQGF=G G> G SCQ@CDEGWC ?O E<C @<GQWC
\?FABC ?D @QCP=E @GQP> =D CG@< B?DE< >=D@C N?E< >CQ=C> <G\C NCCD G\G=FGNFC NCW=DD=DW =D .AWA>E
JIIJX " ><?_ E<C QC>AFE ?O E<=> GDGFR>=> =D *=WAQC JX
HdXJs
HHXTs
IXJs
dXIs
HTXJs
`XVs
VXds
[X[s
7IX`s
TX[s
HTXTs
HHX[s
HVXHs
`XUs
HVX[s
JHX[s
UXIs
HHXVs
HIXUs
`XVs
V@3\]
\3\]
@3\]
6\3\]
6@3\]
8\3\]
8@3\]
8\\< 8\\= 8\\@ 8\\A 8\\^ 8\\_ 8\\` 8\6\ 8\66 8\68 8\6<
68 9HCQRF %CPGCS &KMKJYKLa
-GSULK 6
68V9HCQR ;LH[QR *DQKa +LKPGQ WF3 &KYGQ 7HEUJK GC )UFQLDEGD
+LKPGQ &KYGQ
0?AQ@C>9 <EES9oo___XQNGXW?\XGAo>EGE=>E=@>oEGNFC>o8F>o@IH<=>EX8F>uG@@C>>CPxJIH[7Id7JT7HV7Tc7V[ GDP
<EES9oo___XQNGXW?\XGAo>EGE=>E=@>oEGNFC>o8F>o@IV<=>EX8F>uG@@C>>CPxJIH[7Id7JT7HV7Tc7V[X
6\36@]
6\36=]
TU
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >+ 2A 78 ?"@$B1 C' ,>8<7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 400/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
d`X
*=WAQC> H GDP J SG=DE G S=@EAQC gA=EC P=OOCQCDE OQ?B E<GE >AWWC>ECP NR 4Q?OC>>?Q
!GA>BGDY> @<CQQR7S=@^=DW ?O +C@CBNCQ JIHJ GDP +C@CBNCQ JIHT G> <=> PGEC> O?Q @?BSGQ=DW
E<C WQ?_E< ?O PCN=E @GQP GDP @QCP=E @GQP A>GWCX "E => EQACM G> 4Q?OC>>?Q !GA>BGD QCS?QE>M E<GE
@QCP=E @GQP A>GWC WQC_ NR HIXJs =D E<C RCGQ CDP=DW +C@CBNCQ JIHTM GDP E<GE E<=> C8@CCPCP E<C
WQ?_E< QGEC ?O PCN=E @GQP A>GWC PAQ=DW E<GE >GBC SCQ=?PX 'F?>CQ C8GB=DGE=?DM <?_C\CQM ><?_>
E<GE E<C P=OOCQCD@C =D E<C>C WQ?_E< QGEC> _G> ?DFR IXIHcs PAQ=DW JIHTM GDP E<GE E<=> HJ7B?DE<
SCQ=?P _G> GNCQQGE=?DGFX .> 4Q?OC>>?Q !GA>BGD D?EC>M @QCP=E @GQP A>GWC WQC_ GE E<C OG>EC>E
QGEC =D >=8 RCGQ> =D JIHTX *=WAQC H ><?_> E<GEM G>=PC OQ?B E<C ?DC7O=OE=CE< ?O ?DC SCQ@CDE OG>ECQ
@QCP=E @GQP WQ?_E< E<GD PCN=E @GQP WQ?_E< =D JIHTM =D C\CQR ?E<CQ RCGQ CDP=DW CG@< SQC\=?A>
+C@CBNCQ >=D@C JIIT KE<C RCGQ @QCP=E @GQP >AQ@<GQW=DW NCWGDLM PCN=E @GQP WQ?_E< C8@CCPCP
@QCP=E @GQP WQ?_E< =D .A>EQGF=GX *=WAQC J ><?_> E<C @ABAFGE=\C COOC@E ?O E<=> P=OOCQCDE=GF
\3\]
6\3\]
8\3\]
<\3\]
=\3\]
@\3\]
A\3\]
^\3\]
_\3\]
`\3\]
) U S V 8 \ \ 8
& K M V 8 \ \ 8
) O L V 8 \ \ <
) U S V 8 \ \ <
& K M V 8 \ \ <
) O L V 8 \ \ =
) U S V 8 \ \ =
& K M V 8 \ \ =
) O L V 8 \ \ @
) U S V 8 \ \ @
& K M V 8 \ \ @
) O L V 8 \ \ A
) U S V 8 \ \ A
& K M V 8 \ \ A
) O L V 8 \ \ ^
) U S V 8 \ \ ^
& K M V 8 \ \ ^
) O L V 8 \ \ _
) U S V 8 \ \ _
& K M V 8 \ \ _
) O L V 8 \ \ `
) U S V 8 \ \ `
& K M V 8 \ \ `
) O L V 8 \ 6 \
) U S V 8 \ 6 \
& K M V 8 \ 6 \
) O L V 8 \ 6 6
) U S V 8 \ 6 6
& K M V 8 \ 6 6
) O L V 8 \ 6 8
) U S V 8 \ 6 8
& K M V 8 \ 6 8
) O L V 8 \ 6 <
) U S V 8 \ 6 <
& K M V 8 \ 6 <
) O L V 8 \ 6 =
-GSULK 8
*DQGH HI &KYGQ QH +LKPGQ +DLP +RDLSK 7HEUJK GC )UFQLDEGD 8\\8V8\6=
1LHIKFFHL
5DUFJDCbF
+HJODLGFHC
Tc
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >& 2A 78 ?"@$B1 C' ,>8<D
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 401/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
WQ?_E<XHJJ .WWQCWGEC PCN=E @GQP >SCDP=DW _G> GN?AE [I7[Vs ?O @QCP=E @GQP >SCDP=DW
E<Q?AW<?AE B?>E ?O E<C SCQ=?P .AWA>E JIIJ7JIIVM NAE >=D@C E<CD E<=> QGE=? <G> =D@QCG>CP
><GQSFRX -<C \CQR >F=W<EFR OG>ECQ WQ?_E< QGEC ?O @QCP=E @GQP A>GWC =D E<C NQ=COM QC@CDE SCQ=?P
C8GB=DCP NR 4Q?OC>>?Q !GA>BGD >G_ E<=> QGE=? PC@F=DC NR IXIHsM NAE E<GE FCOE E<C QGE=? GE UdXTs
/ OGQ GN?\C E<C FC\CF SQC\G=F=DW =D JIITX :?QC?\CQM E<CQC => D? >=WD E<GE E<C AS_GQP EQCDP <G>
@CG>CPX
=3@3 $RK $RLKDQ QH "KQ[HLZF HI 2HFQ $LDCFDMQGHC 7HEUJK -LHJ +LKPGQ +DLP (ULMRDLSKF .GEE
;KCKLDQK D 1LKWGHUFEB (UOOLKFFKP +HJOKQGQGWK +HCFQLDGCQ HC QRK 2KWKE HI +LKPGQ +DLP
9KLMRDCQ -KKF
=3@363 "KQ[HLZF 2HFK 9HLK $LDCFDMQGHCF DF 9KLMRDCQ -KKF #CMLKDFK GI 9KLMRDCQF +DC
(ULMRDLSK $RDC #I 9KLMRDCQF +DCCHQ (ULMRDLSK
UIX .> " <G\C GFQCGPR C8SFG=DCPM GE E<C @AQQCDE FC\CF ?O @QCP=E @GQP OCC> BCQ@<GDE>
NCDCO=E OQ?B >AQ@<GQW=DW @QCP=E @GQP> C\CD _=E<?AE @?D>=PCQGE=?D ?O GDR @<GDWC E? E<C FC\CF ?O
BCQ@<GDE OCC> QC>AFE=DW OQ?B >AQ@<GQW=DWX :CQ@<GDE> E<GE >AQ@<GQWC QC@?AS @QCP=E @GQP @?>E>
>SC@=O=@GFFR OQ?B @A>E?BCQ> _<? A>C @QCP=E @GQP> GDP >? @GD @<GQWC F?_CQ SQ=@C> E? @G>< GDP
PCN=E @GQP @A>E?BCQ>M _<=@< =D@QCG>C> >GFC> E? E<?>C @A>E?BCQ>X :?QC?\CQM >?BC @?D>ABCQ>
_=FF GFECQ E<C=Q SGRBCDE @<?=@C> O?Q GE FCG>E >?BC ?O E<C=Q EQGD>G@E=?D>X " ><?_CP =D BR =D=E=GF
PC@FGQGE=?D KGDP DC=E<CQ 4Q?OC>>?Q 0E=WF=EZ D?Q 4Q?OC>>?Q !GA>BGD <G> P=>SAECPL E<GE
EQGD>G@E=?D> B=WQGE=DW OQ?B @QCP=E @GQP> E? PCN=E @GQP> _=FF >G\C BCQ@<GDE> GSSQ?8=BGECFR
HXVUs ?O E<C EQGD>G@E=?D GB?ADEX '?>E QCPA@E=?D> GF>? FCGP E? SQ=@C QCPA@E=?D>M FCGP=DW E?
=D@QCG>CP ?\CQGFF >GFC>X
HJJ *=WAQC J A>C> E<C >GBC >?AQ@C> G> *=WAQC H GDP E<C >GBC G> E<?>C A>CP NR 4Q?OC>>?Q !GA>BGDX #GS> =D E<C
EQCDP F=DC =D *=WAQC J =DP=@GEC B?DE<> =D _<=@< E<C 52. QCS?QE> e>CQ=C> NQCG^>f PAC E? @<GDWC> =D QCS?QE=DWX
T`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >, 2A 78 ?"@$B1 C' ,>8<<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 402/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 403/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
A>C F?_CQ @?>E SGRBCDE ?SE=?D>M CXWX ,*-4(0 @GQP>X -<C>C 6=>G GDP
:G>ECQ'GQP QAFC> FCGP E? <=W<CQ COOC@E=\C :0*> hBCQ@<GDE OCC>i SG=P NRBCQ@<GDE>X -<C :0*> GQC G \GQ=GNFC @?>E O?Q BCQ@<GDE> GDP GQC SG>>CP ?D
=D <=W<CQ SQ=@C> E? GFF @?D>ABCQ>M _<CE<CQ E<CR A>C @QCP=E @GQP> ?Q
GD?E<CQ O?QB ?O SGRBCDEX " O=DP E<GE =D E<C @?ADECQOG@EAGF> =O E<C
GWQCCBCDE E? CDO?Q@C >?BC ?Q GFF ?O E<C QAFC> => CF=B=DGECPM E<C C8SC@ECP
?AE@?BC => G QCPA@E=?D =D E<C :0*> SG=P NR BCQ@<GDE> =D E<C G@gA=Q=DW
BGQ^CEM _<=@< => G SQ?@?BSCE=E=\C ?AE@?BCXHJd
U[X -<C CFG>E=@=ER ?O PCBGDP _=E< QC>SC@E E? BCQ@<GDE OCC> _?AFP NC CD<GD@CP E<C
B?>EM SAEE=DW E<C B?>E P?_D_GQP SQC>>AQC ?D @QCP=E @GQP BCQ@<GDE OCC>M =O BCQ@<GDE> <GP
@?BSFCEC OFC8=N=F=ER E? G@@CSE ?Q QCkC@EM CD@?AQGWC ?Q P=>@?AQGWCM GDP >AQ@<GQWC ?Q P=>@?ADE
_<=@<C\CQ @GQP> E<CR _=><CPX 2AE E<C COOC@E C\CD ?O AD=O?QB @QCP=E @GQP >AQ@<GQWC> => E<C >GBC
P=QC@E=?DGFFRM =O D?E =D BGWD=EAPCX
=3@383
(ULMRDLSGCS #CQKCFGIGKF +HCFQLDGCQF HC 9KLMRDCQ -KKF *KEDQGWK QH QRK (QDQUF
XUH %WKC GI !CGIHLJ )MLHFF cLDCPF
UVX
"O BCQ@<GDE> @?AFP P=OOCQCDE=GFFR >AQ@<GQWC =D E<C 1D=ECP 0EGEC>M E<=> _?AFP ECDP
E? WCDCQGEC G QCFGE=\CFR WQCGECQ @?BSCE=E=\C @?D>EQG=DE ?D .BCQ=@GD ,8SQC>> E<GD ?D
:G>ECQ'GQP ?Q 6=>G K?Q +=>@?\CQ 'GQPL NC@GA>C ?O .BCQ=@GD ,8SQC>>Y> QCFGE=\CFR <=W<CQ BCQ@<GDE
OCCX 2AE E<C A>C ?O P=OOCQCDE=GF >AQ@<GQWC> _?AFP ADF=^CFR NC G> _=PC>SQCGP G> =D .A>EQGF=GX
a<=FC E<CQC => \GQ=GE=?D G@Q?>> BCQ@<GDE>M =D E<C 1D=ECP 0EGEC> " C>E=BGEC E<GE E<C G\CQGWC
.BCQ=@GD ,8SQC>> EQGD>G@E=?D B=WQGE=DW E? :G>ECQ'GQP ?Q 6=>G E?PGR _?AFP >G\C G BCQ@<GDE
HJd !GA>BGD )C_ rCGFGDP 2Q=CO ?O ,\=PCD@CM jUXHX
[H
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >> 2A 78 ?"@$B1 C' ,>8<F
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 404/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
GSSQ?8=BGECFR HU NG>=> S?=DE>XHJU "D .A>EQGF=GM =D JII[7IVM E<C P=OOCQCD@C _G> GSSQ?8=BGECFR
@AB #&)") 6-".,)XHJc
UdX
a<CD BCQ@<GDE OCC> O?Q P=OOCQCDE NQGDP> ?O @QCP=E @GQP> GQC QCFGE=\CFR @F?>C E?
?DC GD?E<CQM OC_CQ BCQ@<GDE> _=FF P=OOCQCDE=GFFR >AQ@<GQWC C\CD =O E<CR <G\C E<C @?DEQG@EAGF
GN=F=ER E? P? >?X ,\CD _=E< BCQ@<GDE> E<GE P=OOCQCDE=GFFR >AQ@<GQWC =D .A>EQGF=GM =E => @?BB?D E?
>CC BCQ@<GDE> @<GQWC E<C >GBC >AQ@<GQWC O?Q .BCQ=@GD ,8SQC>> GDP +=DCQ> 'FAN EQGD>G@E=?D>M
PC>S=EC F=^CFR P=OOCQCD@C> =D E<C @?>E ?O CG@< NQGDPX "E => GF>? @?BB?D O?Q BCQ@<GDE> =D .A>EQGF=G
E? SGQ=ER >AQ@<GQWC GFF @QCP=E @GQP> GE E<C >GBC FC\CFX .> E<C )GE=?DGF 5CEG=F .>>?@=GE=?D ?O
.A>EQGF=G <G> ?N>CQ\CPM =D O=F=DW> _=E< E<C 52.9
*?Q QCEG=FCQ> _<? CFC@E E? >AQ@<GQWC @QCP=E @GQP SAQ@<G>C>M >=BSF=@=ER GDP
COO=@=CD@R GQC SQ=BGQR @?D>=PCQGE=?D> =D >CEE=DW >A@< OCC>X X X X 0AQ@<GQWC>
BA>E NC CG>R O?Q @?D>ABCQ> E? =PCDE=OR GDP @GF@AFGEC GDP CG>R O?Q QCEG=F
>GFC> >EGOO E? GPB=D=>ECQX (OECD G >=DWFC >AQ@<GQWC O?Q GFF @QCP=E @GQP> _=FF
NC SQCOCQQCP NR QCEG=FCQ> PAC E? =E> >=BSF=@=ER ?O ?SCQGE=?D GDP E<C GN=F=ER
?O E<C QCEG=FCQ E? F??^ GE E<C=Q E?EGF @?>E> QCFGECP E? >A@< EQGD>G@E=?D> =D
C>EGNF=><=DW GD GSSQ?SQ=GEC OCCXHJ`
UUX
,\CD =O P=OOCQCDE=GF >AQ@<GQW=DW =D E<C 1D=ECP 0EGEC> <RS?E<CE=@GFFR CF=B=DGECP
P=OOCQCD@C> NCE_CCD BCQ@<GDE OCC> O?Q P=OOCQCDE @QCP=E @GQP NQGDP>M >AQ@<GQW=DW _?AFP
@?DE=DAC E? C8CQE G @?D>EQG=DE ?D DCE_?Q^ BCQ@<GDE OCC>M C\CD =O BCQ@<GDE> E<CQCGOECQ A>CP
?DFR AD=O?QB >AQ@<GQWC>X -<C @QCP=E @GQP DCE_?Q^ =DPA>EQR => <=W<FR @?D@CDEQGECPM GDP CG@<
DCE_?Q^ _?AFP NCGQ G >=WD=O=@GDE ><GQC ?O E<C F?>E EQGD>G@E=?D \?FABC QC>AFE=DW OQ?B BCQ@<GDE
HJU *QGD^CF +C@FGQGE=?DM *=WAQC TX
HJc <EES9oo___XQNGXW?\XGAo>EGE=>E=@>oEGNFC>o8F>o@IT<=>EX8F> HJ` )GE=?DGF 5CEG=F .>>?@=GE=?D 0ANB=>>=?D E? 5C>CQ\C 2GD^ ?O .A>EQGF=G9 5C\=C_ ?O 'GQP 0AQ@<GQW=DWM 3AFR JVM JIHHX
<EES9oo___XQNGXW?\XGAoSGRBCDE>7>R>ECBoQCO?QB>o>ANB=>>=?D>7@GQP7>AQ@<GQW=DWoDQG7@GQP7>AQ@<GQW=DWXSPO
[J
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >7 2A 78 ?"@$B1 C' ,>8E+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 405/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
>AQ@<GQW=DWXHTI -<C @?BSCE=E=\C SQC>>AQC ?D G DCE_?Q^ =D@QCG>=DW =E> BCQ@<GDE OCC> _?AFP D?E
NC G> WQCGE G> _?AFP C8=>E =O >?BC BCQ@<GDE> >=DWFCP ?AE E<GE DCE_?Q^ O?Q P=OOCQCDE=GF
>AQ@<GQW=DWM NAE E<CQC _=FF NC G B?QC COOC@E=\C @?BSCE=E=\C @?D>EQG=DE E<GD C8=>E> =D E<C @AQQCDE
BGQ^CESFG@C =D _<=@< DCE_?Q^> OG@C D? COOC@E=\C @?D>EQG=DE _<CD E<CR QG=>C OCC> GDP
@?D>ABCQ> GQC SQ?\=PCP D? =D@CDE=\C E? G\?=P A>=DW @QCP=E @GQP> =D QC>S?D>C E? E<?>C <=W<CQ
OCC>X
=3@3<3 1LHIKFFHL 5DUFJDC GF #CMHLLKMQ GC 5GF +EDGJ QRDQ (ULMRDLSGCS 5DF "HQ +DUFKP D
*KPUMQGHC GC )JKLGMDC %NOLKFF?F 9KLMRDCQ -KKF GC )UFQLDEGD
UcX 4Q?OC>>?Q !GA>BGD DC\CQ =PCDE=O=C> GDR GDE=@?BSCE=E=\C @?DPA@E E<GE <C NCF=C\C>
.BCQ=@GD ,8SQC>> <G> CDWGWCP =D ?Q GDR QCBCP=C> E<GE _?AFP CQ?PC =E> >=WD=O=@GDE BGQ^CE
S?_CQX !C @Q=E=@=ZC> E<C .WQCCBCDE O?Q FCG\=DW =DEG@E .BCQ=@GD ,8SQC>>Y> D?7P=OOCQCDE=GF
>AQ@<GQWC S?F=@R _=E< QC>SC@E E? GFECQDGE=\C @QCP=E @GQP>M NAE E<GE => SAZZF=DWM NC@GA>C 4Q?OC>>?Q
!GA>BGDY> GDGFR>=> K=D@?QQC@EFRL >AWWC>E> E<GE E<GE .BCQ=@GD ,8SQC>> S?F=@R <G> D? >=WD=O=@GDE
GDE=@?BSCE=E=\C COOC@E>X !C @?DECDP> E<GE C\CD =D .A>EQGF=GM _<CQC .BCQ=@GD ,8SQC>>Y>
BCQ@<GDE OCC _G> H[I NG>=> S?=DE> GN?\C E<?>C ?O :G>ECQ'GQP GDP 6=>GM P=OOCQCDE=GF >AQ@<GQW=DW
<GP .- $11$*, ?D .BCQ=@GD ,8SQC>>Y> BCQ@<GDE OCC>X 2AE =O E<C GN=F=ER E? P=OOCQCDE=GFFR >AQ@<GQWC
<GP D? COOC@E GE QCPA@=DW C\CD .BCQ=@GD ,8SQC>>Y> OCC> _<CD E<CR _CQC H[I NG>=> S?=DE> GN?\C
E<?>C ?O ?E<CQ @QCP=E @GQP DCE_?Q^>M E<GE GN=F=ER @GDD?E F?W=@GFFR <G\C G >=WD=O=@GDE @?BSCE=E=\C
COOC@E =D E<C 1D=ECP 0EGEC> _<CQC E<C BGk?Q @GQP DCE_?Q^>Y OCC> GQC BA@< @F?>CQ GDP <C
@?DECDP> BCQ@<GDE> GQC FC>> F=^CFR E? >AQ@<GQWCX
HTI -<GE => D?E E? >GR E<GE >?BC BCQ@<GDE> _=FF D?E O=DCFR P=>E=DWA=>< P=OOCQCDE >AQ@<GQWC> O?Q P=OOCQCDE NQGDP> ?QE<GE >?BC BGk?Q BCQ@<GDE> _?AFP D?E DCW?E=GEC OG\?QCP D?7>AQ@<GQWC GWQCCBCDE> _=E< SGQE=@AFGQ NQGDP> =D
C8@<GDWC O?Q F?_CQ OCC> =O P=OOCQCDE=GF >AQ@<GQW=DW _CQC GD G\G=FGNFC ?SE=?DX +=OOCQCDE=GF >AQ@<GQW=DW _?AFP
@?DE=DAC E? NC G \GFAGNFC @?BSCE=E=\C BCQ@<GDE E??F C\CD =O GFF NQGDP>Y BCQ@<GDE OCC> >EGQECP ?AE E<C >GBCX
[T
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >D 2A 78 ?"@$B1 C' ,>8E&
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 406/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
U`X
4Q?OC>>?Q !GA>BGD W?C> OAQE<CQM >AWWC>E=DW E<GE E<C QCFC\GDE BCG>AQC ?O
.BCQ=@GD ,8SQC>>Y> BCQ@<GDE OCC> <G> G@EAGFFR ".*%$&)$+ =D .A>EQGF=G PC>S=EC E<C GN=F=ER E?
>AQ@<GQWC GDP P=OOCQCDE=GFFR >AQ@<GQWCX 2AE .BCQ=@GD ,8SQC>>Y> G\CQGWC BCQ@<GDE OCC <G>
PC@QCG>CP NR Uc NG>=> S?=DE> >=D@C :GQ@< JIITM @?BSGQCP E? dH NG>=> S?=DE> O?Q E<C
=DECQ@<GDWC7QCWAFGECP :G>ECQ'GQP GDP 6=>GX
TH
cIX
"D ?E<CQ _?QP>M E<C COOC@E=\C .BCQ=@GD ,8SQC>> BCQ@<GDE OCC =D .A>EQGF=G <G>
PC@F=DCP NR NCE_CCD cT7HHT NG>=> S?=DE>M @?BSGQCP E? G PC@F=DC ?O dH NG>=> S?=DE> O?Q
:G>ECQ'GQP GDP 6=>GM D?E_=E<>EGDP=DW E<C FG@^ ?O P=QC@E QCWAFGE?QR =DECQ\CDE=?D _=E< QC>SC@E E?
.BCQ=@GD ,8SQC>>Y> QGEC>X
HTH 6CFFEAQ? 5CS?QEM jJI[M @=E=DW :GF<?EQG +CS?>=E=?D ,8<=N=E TVJX
[[
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >< 2A 78 ?"@$B1 C' ,>8E,
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 407/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
M GDP E<CQC => D? DCCP O?Q BC E? QCSCGE GFF ?O E<GE C\=PCD@C <CQCXHTJ
cHX
4Q?OC>>?Q !GA>BGDY> @FG=B E<GE >AQ@<GQW=DW <GP D? COOC@E ?D .BCQ=@GD ,8SQC>>Y>
QGEC>M GDP =D OG@E E<GE e.:,; <G> WQ?_D QCFGE=\CFR 7-%$ $;6$.)"5$ E<GD 6:' >=D@C .A>EQGF=G
NCWGD GFF?_=DW >AQ@<GQW=DWMf => NG>CP ?D <=> @?BSAEGE=?D ?O E<C %&,"- ?O .BCQ=@GD ,8SQC>>Y>
G\CQGWC BCQ@<GDE OCC E? E<GE ?O :G>ECQ'GQP GDP 6=>GXHTT !C @?DECDP> E<GE => E<C C@?D?B=@GFFR
QCFC\GDE BCG>AQC ?O SQ=@C O?Q SAQS?>C> ?O C\GFAGE=DW E<C COOC@E> ?O >AQ@<GQW=DWX 2AE =E => D?EX
cJX
4Q?OC>>?Q !GA>BGD G>>CQE> E<GE eE<C +$*%$&)$) ". 9C:D<) 1$$) <G\C NCCD PAC E?
E<C F?_CQ QCWAFGECP =DECQ@<GDWC QGEC> ?O 6:' GDP BCQ@<GDE>Y GN=F=ER E? QCOA>C E? G@@CSE
.:,;XfHT[ 2AE <=> A>C ?O E<C PC@F=D=DW '$5$' ?O .BCQ=@GD ,8SQC>>Y> OCC> E? C\GFAGEC E<C @FG=BCP
COOC@E=\CDC>> ?O BCQ@<GDE>Y GN=F=ER E? QCOA>C E? G@@CSE .BCQ=@GD ,8SQC>> @GQP> GDP E<C %&,"- E?
:G>ECQ'GQP GDP 6=>G OCC> E? C\GFAGEC E<C COOC@E=\CDC>> ?O >AQ@<GQW=DW => GQN=EQGQRX
cTX
" GWQCC E<GE QCPA@E=?D> =D :G>ECQ'GQP GDP 6=>G BCQ@<GDE OCC> *-.,%"#/,$+ E? E<C
PC@F=DC =D .BCQ=@GD ,8SQC>> BCQ@<GDE OCC>M NAE )- +"+ ,3$ $'"7".&,"-. -1 .->)/%*3&%4$ %/'$)X
HTJ 6CFFEAQ? 5CS?QEM jjJIV7JJcM JTV7J[`XHTT !GA>BGD 5CS?QEM jdc KCBS<G>=> GPPCPLXHT[ "PX KCBS<G>=> GPPCPLX
[V
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >E 2A 78 ?"@$B1 C' ,>8E8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 408/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
HTV
c[X
"O .BCQ=@GD ,8SQC>>Y> D?7>AQ@<GQWC S?F=@R <GP NCCD FCOE =D SFG@C =D JIITM =E _?AFP
<G\C OG@CP FC>> SQC>>AQC E? QCPA@C =E> BCQ@<GDE OCC>X 4Q?OC>>?Q !GA>BGDM <?_C\CQM >AWWC>E>
E<GE E<C 52. GWQCC> _=E< <=> @?D@FA>=?D E<GE >AQ@<GQW=DW <G> SFGRCP .- Q?FC GE @?D>EQG=D=DW
BCQ@<GDE OCC>XHTd "D JII`M E<C E<CD7!CGP ?O 4GRBCDE 4?F=@R GE E<C 52. GWQCCP _=E< BCX
" E<=D^ E<CQC GQC E_? E<=DW> PQ=\=DW E<=> h@?DE=DACP QCPA@E=?D =D .BCQ=@GD
,8SQC>> BCQ@<GDE OCC>i KHL E<C OG@E E<GE E<C >SQCGP _=PCDCP GOECQ
=DECQ@<GDWC OCC> OCFF BCGDE E<GE .BC8 <GP E? F?_CQ =E> OCC> ?\CQ E=BC E?
QCBG=D @?BSCE=E=\C GDP E? =D@QCG>C G@@CSEGD@C GDP KJL >AQ@<GQW=DW <G><=E .BC8 BA@< <GQPCQ E<GE h>=@i 6=>G GDP :G>ECQ'GQP _<=@< <G> =D >?BC
@G>C> QC>AFE=DW h>=@i =D =E <G\=DW E? F?_CQ =E> hBCQ@<GDE >CQ\=@C OCC>i E?
G\?=P >AQ@<GQW=DWXHTU
cVX
"D =E> JIHH QC\=C_ ?O @GQP >AQ@<GQW=DWM E<C 52. GOO=QBCP =E> \=C_ E<GE D?7
>AQ@<GQWC QAFC> eF=B=ECP E<C GN=F=ER ?O BCQ@<GDE> E? SAE P?_D_GQP SQC>>AQC ?D E<C=Q BCQ@<GDE
>CQ\=@C OCC> GDP =DECQ@<GDWC OCC> NR E<QCGECD=DW E? @<GQWC E<C @A>E?BCQ O?Q A>=DW G @QCP=E ?Q
>@<CBC PCN=E @GQPXfHTc
cdX
4Q?OC>>?Q !GA>BGD @=EC> PGEG @?D@CQD=DW E<C KB=D?QL WQ?_E< =D E<C @?BN=DCP
7&%=$, )3&%$ ?O .BCQ=@GD ,8SQC>> GDP +=DCQ> 'FAN KQCFGE=\C E? :G>ECQ'GQP GDP 6=>GL NG>CP ?D
EQGD>G@E=?D P?FFGQ \?FABC G> C\=PCD@C E<GE e>AQ@<GQW=DW <G> D?E @?D>EQG=DCP .:,; GDP +=DCQ>
7$%*3&., 1$$)XfHT` -<GE => G D?D >CgA=EAQX "D OG@EM PC>S=EC E<C =>>AGD@C ?O e@?BSGD=?Df
HTV HTd !GA>BGD 5CS?QEM jdcXHTU 5CNAEEGF 5CS?QE ?O .FGD 0X *QGD^CFM 4<X+XM "D 5C 4GRBCDE 'GQP "DECQ@<GDWC *CC GDP :CQ@<GDE +=>@?ADE
.DE=EQA>E $=E=WGE=?DM 3ADC JJM JIHIM @=E=DW CBG=F OQ?B :=@<CFFC 2AFF?@^ E? .FGD *QGD^CFM :GR THM JII`X
HTc 52. 3ADC JIHH '?D>AFEGE=?D +?@ABCDEM SX JXHT` !GA>BGD 5CS?QEM jUHX .E FCG>E SGQE ?O E<GE QCS?QECP =D@QCG>C QC>AFE> OQ?B G @<GDWC =D E<C 52.Y> QCS?QE=DW
BCE<?P?F?WRM G> 6=>G PCN=E EQGD>G@E=?D> GQC D?_ NC=DW C8@FAPCP OQ?B E<GE DCE_?Q^Y> QCS?QECP BGQ^CE ><GQCX
<EES9oo___XQNGXW?\XGAo>EGE=>E=@>oEGNFC>oC8S7D?ECo@J7D?EC7HJIVHIX<EBF
[d
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ >F 2A 78 ?"@$B1 C' ,>8E>
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 409/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
.BCQ=@GD ,8SQC>> @GQP> NR .A>EQGF=GD NGD^> GDP PC>S=EC .BCQ=@GD ,8SQC>>Y> BA@< <=W<CQ
BCQ@<GDE OCC> GDP E<C GN=F=ER E? A>C E<?>C OCC> E? @?DE=DAC OADP=DW QC_GQP SQ?WQGB>M E<C
ePCGE< >S=QGFf E<GE :G>ECQ'GQP GDP 6=>G _GQDCP GN?AE =D .A>EQGF=G P=P D?E BGECQ=GF=ZCX
4Q?OC>>?Q !GA>BGD @?DECDP> E<GE G >F=W<E ASE=@^ =D E<C @?BN=DCP ><GQC ?O .BCQ=@GD ,8SQC>>
GDP +=DCQ> 'FAN ><?_> E<GE >AQ@<GQWC> <G\C OG=FCP E? @?D>EQG=D E<?>C DCE_?Q^>X "D OG@EM =E
><?_> E<C ?SS?>=ECX 2GD^> E<GE =>>AC :G>ECQ'GQP GDP 6=>G @QCP=E @GQP> F?>E GN?AE [V NG>=>
S?=DE> ?O BCQ@<GDE K=DECQ@<GDWCL OCC QC\CDAC PAC E? 52. QCWAFGE=?DX -<C BGk?Q NGD^> NCWGD
=>>A=DW @?BSGD=?D .BCQ=@GD ,8SQC>> @GQP> GDP CD@?AQGWCP E<C A>C ?O E<?>C @GQP> _=E<
CD<GD@CP QC_GQP> O?Q A>C ?O .BCQ=@GD ,8SQC>> =D>ECGP ?O E<C :G>ECQ'GQP ?Q 6=>G @QCP=E @GQP
F=D^CP E? E<C >GBC G@@?ADEX %CE .BCQ=@GD ,8SQC>> <G> F?>E ?\CQ cT7HHT NG>=> S?=DE> ?O
BCQ@<GDE OCC QC\CDAC GDP <G> NCCD ADGNFC E? =DPA@C G >=WD=O=@GDE B=WQGE=?D E? A>GWC ?O =E>
@GQP>X
=3A3 $RK )SLKKJKCQ cKCKIGQF 9KLMRDCQF .GQR *KFOKMQ QH )EE +ULLKCQ +LKPGQ +DLP !FDSK4 "HQ
,CEB )JKLGMDC %NOLKFF +DLP !FDSK
cUX
"D BR =D=E=GF PC@FGQGE=?DM " C>E=BGECP Q?AW<FR E<C NCDCO=E> E? BCQ@<GDE> O?Q CG@<
?DC SCQ@CDE ?O @<GQWC \?FABC E<GE NC@?BC> >ANkC@E E? @QCP=E @GQP >AQ@<GQWC> =D E<C 1D=ECP
0EGEC>X -<C -GQWCE (NkC@E?Q> >EGEC E<GE BR @?BSAEGE=?D ><?AFP NC P=>QCWGQPCP NC@GA>C " P?
D?E >CSGQGEC E<C \GFAC OQ?B >AQ@<GQW=DW .BCQ=@GD ,8SQC>> OQ?B E<C \GFAC ?O >AQ@<GQW=DW
:G>ECQ'GQP GDP 6=>GXH[I 2AE " <G\C C8SFG=DCP =D BR PC@FGQGE=?D> =D :+$7HUJIMH[H GDP GWG=D =D
E<=> @G>CMH[J E<GE .BCQ=@GD ,8SQC>>Y> )+4 SQC\CDECP B?>E BCQ@<GDE> OQ?B GSSFR=DW >AQ@<GQWC>
H[I (BD=NA> (NkC@E=?D> E? E<C .BCQ=@GD ,8SQC>> 'FG>> .@E=?D 0CEEFCBCDE ?O .N>CDE 4AEGE=\C 5AFC JTK2LKJL 'FG>>:CBNCQ> -GQWCE '?QS?QGE=?DM CE GFXM 3ADC dM JIH[M SX JdX
H[H *QGD^CF :+$7HUJI +C@FGQGE=?DM 4GQE [XdXJ GDP *QGD^CF :+$7HUJI 5CSFR +C@FGQGE=?DM 4GQE [X[XJXH[J *QGD^CF +C@FGQGE=?DM 4GQE TXd GDP 4GQE J GN?\CX
[U
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 7+ 2A 78 ?"@$B1 C' ,>8E7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 410/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
E? :G>ECQ'GQP GDP 6=>G @QCP=E @GQP EQGD>G@E=?D> SCQB=EECP ADPCQ E<C QCF=CO ?NEG=DCP =D :+$7
HUJIX .> " C8SFG=DCP =D :+$7HUJIM .BCQ=@GD ,8SQC>>Y> S?F=@R >=WD=O=@GDEFR QCPA@CP E<C \GFAC
E<GE BCQ@<GDE> ?E<CQ_=>C _?AFP <G\C ?NEG=DCP OQ?B E<C QCF=CO =D E<GE @G>CX -<C QCF=CO SQ?S?>CP
=D E<C .WQCCBCDE _=FF OQCC BCQ@<GDE> D?_ E? >AQ@<GQWC GFF @QCP=E @GQP NQGDP>X .> GD C@?D?B=@
BGEECQM E<C NCDCO=E> E? BCQ@<GDE> OQ?B E<C >CEEFCBCDE E<A> =D@FAPC E<C NCDCO=E> D?E ?DFR OQ?B
E<C GN=F=ER E? >AQ@<GQWC .BCQ=@GD ,8SQC>> @GQP EQGD>G@E=?D>M NAE GF>? E<C GN=F=ER E? >AQ@<GQWC GFF
NQGDP> NR BCQ@<GDE> E<GE G@@CSE .BCQ=@GD ,8SQC>> @GQP>X
@3
($)$% *%($*#+$#,"(
ccX "D BR =D=E=GF PC@FGQGE=?D " D?ECP GQWABCDE> E<GE >EGEC >EGEAEC> QC>EQ=@E=DW @QCP=E
@GQP >AQ@<GQWC> CF=B=DGEC GDR \GFAC OQ?B CF=B=DGE=?D ?O DCE_?Q^ D?7>AQ@<GQWC QAFC>XH[T
4Q?OC>>?Q !GA>BGD QCSCGE> E<=> GQWABCDE GDP @?BSAEC> E<C SCQ@CDEGWC ?O 1X0X @?BBCQ@C =D
ECD >EGEC> <C >GR> SQ?<=N=E >AQ@<GQW=DWXH[[ !C D?EC> G> " P=P E<GE G OCPCQGF @?AQE <G> PCECQB=DCP
E<GE )C_ %?Q^Y> >EGEAEC => AD@?D>E=EAE=?DGFM GDP <C >EGEC> <?_ <=> @?BSAECP SCQ@CDEGWC ?O
@?BBCQ@C =D D?7>AQ@<GQWC >EGEC> _?AFP @<GDWC =O eE<GE @?AQEY> kAPWBCDE => QC\CQ>CPMf NAE <C
P?C> D?E @?BSAEC <?_ =E _=FF @<GDWC =O =D>ECGP ?E<CQ @?AQE> PC@=PC >=B=FGQFR E? E<GE =D E<C )C_
%?Q^ @G>CX "D GPP=E=?D E? FCWGF @<GFFCDWC>M " GF>? C8SFG=DCP E<GE >EGEC QC>EQ=@E=?D> BGR NC
>ANkC@ECP E? @?BSCE=E=\C @<GFFCDWC> G> BCQ@<GDE> E<GE @GD @<??>C E<C=Q F?@GE=?D BGR @?D>=PCQ
>AQ@<GQWC Q=W<E> =D GPP=E=?D E? ?E<CQ OG@E?Q>X
H[T *QGD^CF +C@FGQGE=?DM j[XJX
H[[ !GA>BGD 5CS?QEM jVJX 4Q?OC>>?Q !GA>BGD D?EC> E<GE e>?BC BCQ@<GDE> <G\C >=WD=O=@GDEFR B?QC E<GD TVs ?OE<C=Q NA>=DC>> =D E<C >EGEC> _<=@< SQ?<=N=E >AQ@<GQW=DWXf !GA>BGD 5CS?QEM jVTX "O GDR >EGEC SQ?<=N=E>
>AQ@<GQW=DW E<GE _=FF NC EQACM NC@GA>C E<CQC GQC >=DWFC7F?@GE=?D BCQ@<GDE> =D C\CQR >EGECX 2AE E<GE GF>? BCGD>
E<GE E<CQC GQC BGDR BCQ@<GDE> _=E< .-.$ ?O E<C=Q NA>=DC>> =D D?7>AQ@<GQWC >EGEC>X
[c
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 7& 2A 78 ?"@$B1 C' ,>8ED
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 411/512
!"#!$% '()*"+,)-".$ / 0123,'- -( 45(-,'-"6, (5+,5
c`X
-<CQC => D? P=>SAEC =D E<=> @G>C E<GE E<C QCFC\GDE WC?WQGS<=@ BGQ^CE => E<C 1D=ECP
0EGEC>M GDP " D?ECP E<GE e6=>G GDP :G>ECQ'GQPM O?Q C8GBSFCM P? D?E >CE >CSGQGEC =DECQ@<GDWC
OCC> =D >CSGQGEC >EGEC>f >? E<GE @?BSCE=E=\C SQC>>AQC QC>AFE=DW OQ?B >AQ@<GQW=DW _=FF <G\C G
DGE=?D_=PC COOC@EXH[V 4Q?OC>>?Q !GA>BGD @Q=E=@=ZC> E<=> ?D E<C WQ?ADP> E<GE e<?_ 6=>G GDP
:G>ECQ'GQP SQ=@C >GR> D?E<=DW GN?AE E<C COOC@E ?O E<C >CEEFCBCDEY> F=B=ECP >AQ@<GQW=DW ?D
.:,;Y> BCQ@<GDE OCC>XfH[d 2AE G> " <G\C C8SFG=DCPM E<C >CEEFCBCDE OQCC> BCQ@<GDE> E<GE G@@CSE
.BCQ=@GD ,8SQC>> E? GSSFR >AQ@<GQWC> GF>? E? :G>ECQ'GQP GDP 6=>G @QCP=E @GQP EQGD>G@E=?D>XH[U
A3
+,"+2!(#,"
`IX (DC ?O E<C OG@E?Q> E<GE <G> BGPC >AQ@<GQW=DW G QCFGE=\CFR COOC@E=\C >EQGECWR O?Q
BCQ@<GDE> =D .A>EQGF=G _G> E<C CDP?Q>CBCDE ?O >AQ@<GQW=DW G> G FCW=E=BGEC GDP SQ?7@?D>ABCQ
NA>=DC>> >EQGECWR NR QCWAFGE?Q> GDP BCQ@<GDE> GF=^CX "D E<C 1D=ECP 0EGEC>M E<C )GE=?DGF 5CEG=F
*CPCQGE=?D <G> >EGECP E<GE >AQ@<GQW=DW eQAD> HcI PCWQCC>f OQ?B E<C W?GF ?O F=E=WGE=?D E? QCPA@C
@QCP=E @GQP BCQ@<GDE OCC> GDP SQ=@C> SG=P NR @?D>ABCQ>XH[c -<GE => C8G@EFR _Q?DWM GDP =E =>
ADO?QEADGECX -<C GN=F=ER E? >AQ@<GQWC => G E??F E<GE BCQ@<GDE> @GD A>C E? QCPA@C E<C \CQR
>AN>EGDE=GF BGQ^CE S?_CQ C8CQ@=>CP NR @GQP DCE_?Q^> =D E<C 1D=ECP 0EGEC>X +CB?D=Z=DW
>AQ@<GQW=DW G> GDE=7@?D>ABCQ GDP =DCOOC@E=\C _=FF D?E <CFS BCQ@<GDE> E? A>C >AQ@<GQW=DW
>A@@C>>OAFFR E? WCDCQGEC =E> S?ECDE=GF SQ?@?BSCE=E=\C COOC@E>X
`HX
4Q?OC>>?Q 0E=WF=EZM +QX 6CFFEAQ?M GDP " GWQCC GN?AE E<C OADPGBCDEGF C@?D?B=@
=>>AC> GDP O?Q@C> E<GE FCGP BC E? @?D@FAPC E<GE E<C GN=F=ER E? >AQ@<GQWCM C\CD =O QC>EQ=@ECP E?
H[V *QGD^CF +C@FGQGE=?DM jUTXH[d !GA>BGD 5CS?QEM jVUX
H[U 4Q?OC>>?Q !GA>BGD >EGEC> E<GE e.:,; P?C> D?E <G\C DGE=?D_=PC BCQ@<GDE OCC EGNFC> G> P? 6=>G GDP:G>ECQ'GQPXf "PX
XH[c <EES>9ooDQOX@?BoBCP=GoSQC>>7QCFCG>C>oDQO7>GR>7BCQ@<GDE>7ADF=^CFR7>AQ@<GQWC7@QCP=E7@GQP7A>C
[`
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 7, 2A 78 ?"@$B1 C' ,>8E<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 412/512
HIGHLY
CONFIDENTIAL
-SUBJECT TO
PROTECTIVE ORDER
uniform surcharges, will have beneficial effects for merchants and their customers. I agree that
more complete reforms of
the
card networks would be even more beneficial, but
that
is
not an
option currently available, and I am
not
able to opine on the likelihood
that
rejection
ofthis
Agreement would be followed by more complete, market-wide relief. Notwithstanding
Professor Hausman s criticisms of my analysis, he and I also agree on most
ofthe
fundamental
economic issues, including the substantial market power exercised by all of the major U.S.
credit card networks. Where I
differ from
both him and Professor Stiglitz
is
my conclusion
that
the
ability
to
apply
uniform
credit card surcharges
is
beneficial (even
though it
is
easy
to
imagine even more beneficial market arrangements) . Professors Stiglitz and Hausman, on the
other
hand, take
an
extreme position that
the
ability
to
surcharge all credit card transaction
has o value to U.S. merchants. I do
not
believe
that
position is supported by economic
analysis
or the
evidence. Moreover, Professor Hausman does
not
even
offer
a coherent
prescription for relief that American Express on its own
ould
provide that would significantly
reduce its market power.
July 4 2014
s
!"#$ &'&&()*(+,,,&(-..(/0/ 1234)$56 7&8 9:;$* +<=&>=&> ?"@$ 78 2A 78 ?"@$B1 C' ,>8EE
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 413/512
HOW THE PROPOSED P AYMENTS LEGISLATION WILL R ESTRAIN
COMPETITION AMONG P AYMENT C ARD SCHEMES AND H ARM
CONSUMERS IN THE EUROPEAN UNION
David S. Evans*
1 October 2014
The European Commission’s proposed payments card legislation and the common position reached by the
European Parliament in April 2014 will harm competition, innovation, and consumers if broadly endorsed by the
European Council in the coming months. The interchange fee price caps will soften competition between MasterCard
and Visa, the global four-party bankcard systems, and disadvantage domestic card systems. The limits on what, in effect,
merchants pay for cards will shift billions of euros of costs to European consumers. The infirmity of the legislation is
particularly apparent from its treatment of the three-party card schemes. These three-party schemes, which have small
shares of payment cards in European countries, provide an important source of competition. The proposed legislation
impairs the ability of these smaller three-party systems to compete by permitting merchants to surcharge cards from the
smaller three-party systems but not the larger four-party ones, and by potentially prohibiting three-party systems from
only entering into select partnerships. They may also face arbitrary price caps. These anti-competitive restrictions on
small rivals, advanced in the name of competition, demonstrate the lack of serious analysis behind the proposed
legislation. For European consumers the proposed payments legislation will lead to a hefty price tag, diminished choice,
and depressed innovation.
__________________________________________________________
* Chairman, Global Economics Group; Executive Director, Jevons Institute for Competition Law and Economics and Visiting Professor, Faculty of Laws, University College London; and Lecturer, University of Chicago Law School. I would like to thank Steven Joyce and Alexis Pirchio for excellent research help and American Express for financialsupport. The views in this paper are my own and do not necessarily reflect the view of any of the people or institutionsmentioned above.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 414/512
2
I. INTRODUCTION AND SUMMARY
The European Parliament, in early April 2014, endorsed and further extended draft
legislation,1 originally proposed by the European Commission, which will impose sweeping
regulation on payment card businesses.2 The backers of the legislation claim that it will nurture
competition, innovation, and consumer choice in the European Union.3 In fact, if adopted in the
current form, it will reduce competition among payment systems in the EU, impede the entry of
new schemes, weaken innovation, and decrease consumer choice. European consumers will end up
paying billions of euros more in fees. The legislation will squelch virtually all challengers to
MasterCard and Visa.
One doesn’t have to speculate about these effects. There are already dead and wounded
victims in plain sight. The European Commission’s recent policies have eliminated the most serious
emerging pan-European challenger to the global card networks. A group of 24 banks drawn from
across major countries in Europe tried to start a competing pan-European card system a few years
ago. After being rebuffed by an intransigent Commission, set on shifting the cost of payments from
merchants to consumers, the Monnet Project folded in April 2012. Several other attempts are all but
shuttered. European consumers have already lost competition, choice, and innovation as a result.
The cornerstone of the draft legislation involves caps on the “multilateral interchange fees”
(MIF) that banks that service merchants pay to banks that service consumers when consumers use
their cards to pay at merchants. These caps apply to banks that are members of the four-party bank-
card networks.4 The fee caps will reduce the revenue that cardholders’ banks receive from
1 European Parliament, “Amendments adopted by the European Parliament on 3 April 2014 on the proposal for adirective of the European Parliament and of the Council on payment services in the internal market and amending2 The Commission’s initial proposals are currently being considered by the European Council, before Trialoguediscussions commence at the end of 2014, or beginning of 2015, with a view to finalizing the legislation for adoption bythe European Council and European Parliament.3 European Commission, “Proposal for a Regulation of the European Parliament and of the Council on InterchangeFees for Card-Based Payment Transactions”. COM(2013) 550 final. July 24, 2013. Available at:http://www.ipex.eu/IPEXL-WEB/dossier/document/COM20130550.do; European Commission, “Proposal for aDirective of the European Parliament and of the Council on Payment Services in the Internal Market and AmendingDirective 2002/65/EC, 2013/36/EU and 2009/110/EC and repealing Directive 2007/64/EC”. COM(2013) 547 final”.
July 24, 2013. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0547:FIN:EN:PDF4 The “three” in three-party systems refers to the cardholder, the card company, and the merchant. The “four” in four-party systems refers to the cardholder; the cardholder’s bank; the merchant’s bank, and the merchant. Of course, thatlist doesn’t include the network operator, which would make five, but since this is the normal nomenclature I will use it.
The network operator for the four-party system and the card company for the three-party system serve very differentroles. The card company for the three-party system has direct relationships with cardholders and merchants. The
network operator for the four-party system does not have direct relationships with cardholders and merchants.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 415/512
3
merchants’ banks by as much as 84 percent for debit and 73 percent for credit in some European
countries. That is an experiment that several countries around the world have already performed
with widely reported disastrous results for cardholders. When the merchant-side pays less the
consumer-side pays more. Consumer fees go up, or services go down, and by far more than
consumers may ever see back in lower prices from merchants.
It is even worse than that. By making every four-party bank network, in every country in
Europe, have exactly the same MIF for every transaction regardless of the amount or type of
merchant or any other factor, the legislation limits the ability of these four-party networks to
compete through price and product differentiation. Perversely, given the claimed purpose of the
legislation, this approach will soften competition between MasterCard and Visa. That will exacerbate
the harm to European consumers through less choice, higher prices, and less innovation.
The defects of the legislation are most apparent in the treatment of the smaller card systemsthat operate primarily as standalone companies and do not involve large networks of banks. These
companies, which are called “three-party systems”, account for less than 5 percent of debit, credit
and charge card volume in the European Union. Their presence is known to be modest—less than
10 percent in virtually all EU Member States. Yet the legislation sweeps them into regulations that
were originally motivated by competition concerns about the large four-party bank networks.
According to the legislation, if one of these standalone card companies decides to
collaborate with even one bank to issue or acquire cards, the company may have to make its card
brand available for all banks, in every country in the EU, to issue and acquire as well.5 That
requirement may lead these three-party systems to withdraw from a number of the smaller European
markets where they have entered and extended their reach and coverage through perfectly legitimate
individually and confidentially negotiated vertical agreements with a bank or payment institution
partner. It may therefore perversely reverse the competitive entry that has taken place over the lasttwo decades—entry that was enabled by a competition law-based intervention brought by the
European Commission against Visa in the mid-1990s. It also deters three-party systems, such as
Cetelem in France, from considering a business model that involves partnerships and thereby
arbitrarily limits the ability of these domestic three-party systems from expanding beyond their
borders.
The legislation proposed by the European Parliament6 also prohibits merchants from
5 Article 29(1) of the proposed revised Payment Service Directive purports to extend the open access obligation for
four-systems to three-party systems, requiring them to establish criteria for participation in the system by unrelatedinstitutions which are objective, non-discriminatory and proportionate and do not inhibit access more than is necessaryto safeguard against specified risks. The Commission’s proposal on this issue has been endorsed by the EuropeanParliament.
6 See Article 55, paragraphs 3-4 European Commission, “Proposal for a Directive of the European Parliament and of
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 416/512
4
imposing added fees (“surcharges”) on consumers who use cards from the four-party bank networks
that account the preponderance of card use. It then, in a peculiar twist, specifically permits
merchants to impose added fees on consumers who use cards issued by the smaller companies that
compete with these large bank networks. This makes no sense at all. The ostensible rationale for the
legislation is to provide tools to merchants in circumstances where they have to accept the cards
issued by the “must have” four-party bank networks. That reasoning doesn’t extend to smaller
systems whose cards are not “must have” but, in fact, are “don’t have” at many merchants.
The legislation proposed by the European Commission and European Parliament provides
for extending price regulation to the smaller three-party systems. The price caps would appear to
apply whenever these standalone card companies enter into an individually-negotiated vertical
agreement with an arm’s length partner. In that case the proposals suggest that the three-party
systems should be treated “as if they are a four party scheme.” 7 It is unclear what these provisionsmean in practice since these systems do not have a MIF that could be subject to a cap.
The proposed regulations on smaller players are inconsistent with sound competition policy,
which imposes special obligations only on firms that are dominant in a market, and demands open
access only in the extreme case of essential facilities such as telecom monopolies. Indeed, one sees
how absurd the proposed legislation is from the effect of the combination of the proposed
regulations on the smaller card companies. Several of the regulations make it harder for these
companies to compete against the likes of MasterCard and Visa, and risk undermining the
competitive entry that the European Commission has previously sought to enable.8
The proposed payments legislation left behind by the outgoing European Commission and
European Parliament is anti-consumer and anti-competition. The European Council should not
the Council on Payment Services in the Internal Market and Amending Directive 2002/65/EC, 2013/36/EU and2009/110/EC and repealing Directive 2007/64/EC”. COM(2013) 547 final”. July 24, 2013. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2013:0547:FIN:EN:PDF. See also Amendments 111 and 112,European Parliament, “Amendments adopted by the European Parliament on 3 April 2014 on the proposal for adirective of the European Parliament and of the Council on payment services in the internal market and amendingDirectives 2002/65/EC, 2013/36/EU and 2009/110/EC and repealing Directive 2007/64/EC (COM(2013)0547 – C7-0230/2013 – 2013/0264(COD))”. April 3, 2014. Available at:http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0280+0+DOC+XML+V0//EN.7 See Article 1, paragraph 3 (c), Article 2 (15) and Articles 3-5, European Commission, “Proposal for a Regulation of theEuropean Parliament and of the Council on Interchange Fees for Card-Based Payment Transactions”. COM(2013) 550final. July 24, 2013. Available at: http://www.ipex.eu/IPEXL-WEB/dossier/document/COM20130550.do. See also
Amendment 21, Amendment 28, and Amendments 29-34, European Parliament, “Amendments adopted by theEuropean Parliament on 3 April 2014 on the proposal for a regulation of the European Parliament and of the Councilon interchange fees for card-based payment transactions (COM(2013)0550 – C7-0241/2013 – 2013/0265(COD))”.
April 3, 2014. Available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0279+0+DOC+XML+V0//EN.
8 See discussion below and footnote 29.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 417/512
5
approve it in its current form.
II. THE COMPETITIVE LANDSCAPE FOR PAYMENT CARDS IN THE
EUROPEAN UNION
Networks of banks issue most debit, credit, and charge cards in the European Union. They
are part of “four-party” systems in which one bank handles card payments for merchants, another
bank handles card payments for cardholders, and the network company that operates the system has
no direct relationship with either the merchants or the cardholders, but takes care of authorizing and
clearing transactions between these banks, who are paid a common fee, the MIF, set by the network.In some countries such as the United Kingdom, most banks belong to networks operated by one of
the global card networks—MasterCard and Visa.9 In other countries, many banks belong to
independent domestic networks—such as ServiRed in Spain and Cartes Bancaires in France. The
domestic networks are often affiliated with MasterCard and Visa so their cardholders can use their
cards in other countries using the global networks. Four-party systems almost always have a MIF
that is adhered to by default and which the bank that issues the card receives from the bank that
services the merchant.
Three-party systems also issue debit, credit, and charge cards in the EU. They typically sign
up merchants directly and take care of reimbursing them for payments made on cards they issue;
they also sign up and service consumers directly. Because they are single integrated enterprises they
do not have interchange fees. In some countries the multinational three-party systems, American
Express and Diners Club, work with a local partner that issues cards and in some cases may also work with merchants. Nonetheless, even in such circumstances, they continue not to have
multilateral or bilateral interchange fees. As with any freely and bilaterally negotiated agreement, the
two parties agree on how to allocate the revenues from their joint activities.
To understand the competitive landscape for payment card systems I have examined
industry data for EU Member States that account for approximately 92 percent of EU GDP and 91
percent of EU population. The multi-national four-party networks account for more than 80 percent
of debit, credit and charge card spend in most these countries and their average share, weighted by
GDP, is almost 60 percent.10 By contrast the multi-national three-party systems, in total, account for
9 Visa International is a publicly traded global card system. Visa Europe is an association of European banks which areaffiliated with Visa International and have entered into a deal in which they have the option of selling Visa Europe inreturn for equity in Visa International.
10 The European Commission has claimed that credit, charge and debit cards are a separate relevant antitrust market and
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 418/512
6
less than 10 percent of card spend in virtually every country and their average share, weighted by
GDP, is about 3 percent. Visa and MasterCard dominate the payment card landscape in the EU.
As mentioned earlier, the multi-national three-party systems sometimes partner with banks
or payment institutions in particular countries. Table 1 shows the extent of these partnership
relationships for American Express for all EU countries. American Express operates directly in 11
EU Member States. It has partners in 17 Member States. It is apparent that American Express
typically operates on its own in the larger economies but chooses to partner with banks in the
smaller economies. The average GDP per capita of countries in which it operates on its own is !
37,359 while the average GDP per capita in countries for which it has a partner is, at ! 15,889, more
than 57 percent lower.
The main increase in competition occurred after 1996 when American Express began
entering into bank partnerships to issue cards for use in various countries. That happened followinga competition law-based intervention by the European Commission that challenged the introduction
of a Visa rule that prohibited its member banks from issuing cards for a competitor other than
MasterCard. These partnership relationships were mainly entered into over the course of the first
decade of the century and reflect entry into these countries over that time period.
III. THE FAILED QUEST FOR A NEW PAN-EUROPEAN CARD SYSTEM
The European Commission has encouraged the creation of a pan-European system that
could obtain a global presence. The Commission saw China’s UnionPay as an example. The Chinese
government established UnionPay as the card network for banks in China in March 2002.11 China
UnionPay cards accounted for over 9 billion card transactions in 2012.12 Although the UnionPay
that they do not compete with cash, checks, or other means of payments. EC. Mastercard. COMP/34.579. December19, 2007. Available at: http://ec.europa.eu/competition/antitrust/cases/dec_docs/34579/34579_1889_2.pdf. Thatdefinition is not consistent with the fact that payment card systems compete aggressively with these other forms ofpayments, such as cash, and that consumers and merchants can and do substitute readily between different forms ofpayment. Nevertheless, for the purpose of this paper I use the Commission’s view as a reference point, as this underliesthe proposed legislation, that credit, charge and debit cards are together the relevant “market”.11 China UnionPay, “Overview”. http://en.unionpay.com/comInstr/aboutUs/file_4912292.html.
12 The Nilson Report, #1043.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 419/512
7
Table 1: American Express Entities and Partners in Europe
Country Entities
Austria American Express
Belgium Alpha Card (American Express / BNP Paribas Fortis JV)
Bulgaria Eurobank EFG Bulgaria
Croatia PBZ Card
Cyprus Bank of Cyprus
Czech Republic Global Payments Europe
Denmark TellerEstonia Swedbank
Finland American Express
France American Express, Credipar, Credit Mutuel
Germany American Express
Greece Alpha Bank
Hungary OTP Bank
Ireland Elavon Merchant Services
Italy American Express
Latvia Citadele Banka
Lithuania Citadele Bankas
Luxembourg Alpha Card (American Express / BNP Paribas Fortis JV)
Malta Bank of Valletta
Netherlands American Express
Poland Bank Millennium, First Data
Portugal Millennium bcp, Banco Espirito Santo
Romania Bancpost / EFG Retail Services
Slovakia VUB Bank
Slovenia Banka Koper
Spain American Express, Bansamex (American Express / Santander JV), La Caixa, Iberia Card, BancoPopular Espanol
Sweden American Express, Entercard
United Kingdom American Express, BarclayCard, Lloyds Banking Group, TSB Bank plc, MBNA (Bank of America Europe Card Services)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 420/512
8
cards are primarily issued to Chinese nationals, the cards are accepted in 141 countries and regions
outside of China.13 Another way to look at the situation in Europe is to consider several other large
countries. The United States, China, Japan, and Russia all have large payment systems with roots in
those countries.14 These US, China and Japan systems have secured worldwide distributions for their
domestic card systems.
Several bank groups considered starting pan-European systems in the late 2000s. These
included the European Alliance of Payment Schemes (EAPS), the Monnet Project, and payFair. The
experience of the Monnet Project is instructive. The idea for starting a new pan-EU card system
came about around 2008. A number of banks met in Madrid in 2010 to discuss the initiative and
made plans for moving it forward. By 2011 the Monnet Project had developed detailed technical and
business plans for starting a pan-European system. By then it included 24 banks drawn from seven
countries including the EU-5 as well as Belgium and Portugal. 15 One of their key plans was todevelop a mobile payments system for Europe.
The proponents of the new system, however, did not believe they could develop a viable
business model that did not include economically meaningful interchange fees for the participating
banks.16 They took their concerns to the European Commission. The Commission, however,
apparently would not entertain any system, including a new entrant, having interchange fees in
excess of the low levels that the Commission was pursuing. Absent a clear revenue stream for
issuing banks, the Monnet Project believed it could not move forward. It disbanded in April 2012
“owing”, as the European Central Bank put it, “to the perceived absence of a viable business
model.”17
Meanwhile EAPS and payFair have not obtained much traction in Europe. EAPS is a
coalition of the domestic independent card systems in Europe. According to the European Central
Bank the number of participating systems has declined from six to three. 18 EAPS’ webpage lists
13 China UnionPay, “Overview”. http://en.unionpay.com/comInstr/aboutUs/file_4912292.html.14 Visa and Mastercard in the United States, UnionPay in China, JCB in Japan, and several domestic systems in Russia.BIS (2011) “Payment, Clearing and Settlement Systems in Russia”. CPSS – Red Book – 2011. Available at:http://www.bis.org/publ/cpss97_ru.pdf; BIS (2003) “Payment Systems in the United States”. CPSS – Red Book –2003. Available at: http://www.bis.org/cpss/paysys/UnitedStatesComp.pdf; BIS (2012) “Payment, Clearing andSettlement Systems in China”- CPSS – Red Book – 2012. Available at: http://www.bis.org/publ/cpss105_cn.pdf; Bankof Japan (2003) “Payment System in Japan”. CPSS – Red Book – 2003. Available at:https://www.boj.or.jp/en/paym/outline/pay_boj/pss0305a.pdf.15 “EU Banks Ready to Break Visa/MasterCard Duopoly”, FinExtra. June 15, 2011
http://www.finextra.com/news/fullstory.aspx?NewsItemID=22662. 16 “EU Banks Ready to Break Visa/MasterCard Duopoly”, FinExtra. June 15, 2011
http://www.finextra.com/news/fullstory.aspx?NewsItemID=22662. 17 “Thumbs Down for Monnet”, PaySys SEPA Newsletter, May 2012. http://www.paysys.de/download/SepaMay12.pdf . 18 European Central Bank, “Card Payments in Europe – A Renewed Focus on SEPA for Cards,” at p. 32. Available at
http://www.ecb.europa.eu/pub/pdf/other/cardpaymineu_renfoconsepaforcards201404en.pdf.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 421/512
9
Consorzio BANCOMAT, EUFISERV, and the German Banking Industry Committee. However,
their webpage provides no information on commercial activity after 2012. The latest news section
on the site has only one item from April 2012. PayFair was started in 2007 by industry professionals
and has attempted to develop a pan-European payment system. It highlights on its web site that it
did its one-millionth transaction in 2013. Unfortunately, one million transactions, in total, over six
years, is not an impressive number.19 There were, for example, more than 1.2 billion transactions in
Belgium in just one year, 2013.
Faced with the obstacles set in place by the European Commission there is, at this point, no
significant effort underway, to my knowledge, to create a pan-European system. 20 Despite the
prospect of legislation that claims to “nurture” competition in Europe it does not appear that
anyone is waiting in the wings anxious to make another attempt to start a pan-European system.
These facts strongly suggest that the legislation is not the solution but rather the problem along withthe regulatory barriers to entry erected by the European Commission.
IV. OVERVIEW OF THE PAYMENTS LEGISLATION ENDORSED BY THE
EUROPEAN PARLIAMENT
The legislation endorsed by the European Parliament in April 2014 shifts most of the cost of
running domestic payment systems in Europe from merchants to consumers and favors MasterCard
and Visa at the expense of domestic systems and smaller multinational competitors.
19 The European Central Bank also mentions EUFISERV as one of the entities trying to establish a pan-Europeansystem. I note that their webpage has a 2012 date on it. Suffice it to say that it does not have much presence in Europe.http://www.eufiserv.com/home.aspx. Note that EUFISERV is also a member of PayFair.20 One possibility concerns the banks that belong to Visa Europe. Visa Europe is not owned by Visa. However, underthe terms of an agreement Visa Europe has an option to sell itself to Visa International. There have been somediscussions that Visa Europe would exercise that option after which the banks that belong to Visa Europe wouldestablish their own pan-European debit card system. “Visa Likely to Purchase Europe Payments System”, Banking ServicesPayments”, March 20, 2013. http://payments.banking-business-review.com/news/visa-likely-to-purchase-europe-
payments-system-200313.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 422/512
10
A. THE PROPOSED INTERCHANGE FEE R EGULATIONS
The interchange fee is paid by the merchant’s bank to the cardholder’s bank in the four-party
model. Typically the merchant’s bank passes on most of the cost of the interchange fee payments to
the merchant and the cardholder’s bank passes on most of the benefit of the interchange fee
revenue to the consumer in the form of lower fees and product enhancements. As a result the MIF
balances how much one group of customers (merchants that accept cards) pays relative to another
group of customers (cardholders). Increasing the interchange fee usually lowers what consumers pay
for using cards and increases what merchants pay for using cards. In some cases, the two individual
banks, one an acquirer for merchants and the other an issuer to cardholders, negotiate a bilateral
interchange fee. Such bilateral negotiations are seldom practical for four-party bank networks with
many participants that have to deal with each other. As a result, four-party bank networks typically
set a default interchange fee that applies whenever there is no alternative bilaterally agreed fee.
Notably, European competition authorities have never questioned interchange fees that are
negotiated bilaterally between banks. Three-party systems, as noted earlier, do not have interchange
fees.
Four-party systems use the interchange fee to compete with each other and with the
companies that operate the so-called three-party system. A higher interchange fee helps attract banks
to the system. And since banks pass savings on to cardholders the higher interchange fee also
attracts cardholders, which in turn is critical to ensuring merchants are interested in accepting the
network’s cards. Card systems also have to consider the impact on merchant acceptance. Acquiring
banks may pass on some, or all, of the interchange fee to merchants, so a higher interchange fee
results in a higher merchant fee. The companies that operate three-party systems also chargemerchant fees, but do not have interchange fees. Four and three-party systems strike different
balances between the prices to merchants and consumers. That is consistent with normal
competition where businesses differentiate themselves based on price and many other features.
Four-party bank card systems also reach different judgments on the interchange fee, along
with other prices, across EU Member States. That’s not surprising. As much as Europeans might
aspire for more similarity across countries, the countries differ enormously from one another in so
many ways—from income levels, to the role of large merchants, to cultural preferences concerning
credit. In fact, given the obvious differences it would be astonishing if the rate structures for cards
were the same across Europe. Figure 1 shows the median interchange fees for credit and debit—
taken at the EMV rate when available—for most of the EU countries.21
21 See the appendix for details. To show interchange fees on a comparable basis we used the interchange fees for non-
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 423/512
11
Figure 1: Interchange Fees in EU Countries
Source: See Appendix.
There is even more variability than shown in the figure. Four-party bank card schemestypically set different interchange fees for different kinds of payment cards. There are other
differences as well. Rates for chip-and-pin cards used at the brick-and-mortar locations where the
consumer is present when they are paying with the card are, for example, lower than the rates for
online transactions. Rates can also vary by industry so in some cases rates for petrol are lower than
for retail. These variations in the interchange fees are another source of competitive differentiation
among the systems.
The Commission’s proposals, broadly endorsed by the European Parliament, impose caps
on the MIF adopted by four-party networks of 0.20 percent of the transaction amount for debit
cards and 0.30 percent of the transaction amount for credit cards. For a ! 50 payment the issuing
bank would receive 10 eurocents for debit and 15 eurocents for credit. The same interchange fee
premium consumer cards used in face-to-face transactions.
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
A u s t r i a
B e l g i u m
B u l g a
r i a
C r o a t i a
C y p r u s
C z e c h
R e p u b l i c
D e n m
a r k
E s t o n
i a
F i n l a n
d
F r a n
c e
G e r m
a n y
G r e e c
e
H u n g a r y
I r e l a n
d I t a
l y
L a t v i a
L i t h u
a n i a
L u x e m b
o u r g
M a l t a
N e t h e
r l a n d
s
P o l a n
d
P o r t u
g a l
R o m a
n i a
S l o v a k i a
S l o v e n i a
S p a i n
S w e d e n
U n i t e
d K i n g
d o m
Debit Interchange Fee
Credit Interchange Fee
Average Interchange Fee
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 424/512
12
caps would apply in every country, to every industry, for every merchant, online and offline, and for
every size and type of transaction. The Commission has not, to my knowledge, provided any serious
economic support for the level of these proposed caps, which are apparently wholly arbitrary. The
interchange fee is the only method available for four-party systems to balance their relative prices to
merchants and consumers since different banks serve these two sets of customers. Therefore the
interchange fee caps prevent the card systems from differentiating themselves based on their relative
prices to merchants and cardholders. Under the cap, none of the systems would be able to use
interchange fees to attract banks from other systems.
The interchange fee caps would lead to a dramatic reduction in the fees collected by issuing
banks in most EU countries. Table 2 shows the impact of the legislation by country. It shows the
percent reduction in interchange fee revenue received by issuing banks. The figures are based on the
average interchange fee for debit and credit cards for each country weighted by the volume oftransactions for debit and cards.22 The median reduction in fees is 66 percent. The reductions range
from a low of 0 percent in Hungary to a high of 82 percent in Romania. They exceed 65 percent in
15 of the 28 Member States. In a few pages I’ll show what these reductions mean for European
consumers.
B. THE PROPOSED R EGULATION OF THREE-P ARTY S YSTEMS
The European Parliament’s proposals prohibit merchants from imposing surcharges when
consumers present a card from a four-party card system. At the same time it specifically allows
merchants to impose surcharges when consumers present a card from a company that operates athree-party system. The law today, as set out in the Payment Services Directive, allows merchants to
surcharge but gives Member States the option of banning merchant surcharging. As of February
2013, 14 EU countries had done that.23 The new proposals do not allow EU Member States to opt
out. Therefore under the European Parliament’s proposals, merchants would be able to surcharge
three-party systems throughout the EU.
22 See Appendix.23 They are Austria, Bulgaria, Cyprus, Czech Republic, France, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg,Portugal, Romania, and Sweden. See: London Economics, iff, and PaySys (2013), “Study on the Impact of Directive2007/64/EC on Payment Services in the Internal Market and on the Application of Regulation (EC) No 924/2009 onCross-Border Payments in the Community” (Table 17, page 70). Available at
http://ec.europa.eu/internal_market/payments/docs/framework/130724_study-impact-psd_en.pdf.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 425/512
13
Table 2: Reduction in Interchange Fees by Country
Country Reduction in Debit Card
Interchange
Reduction in Credit Card
Interchange
Reduction in Overall
Interchange
Austria 69% 70% 69%
Belgium 0% 56% 11%
Bulgaria 73% 63% 70%
Croatia 83% 76% 80%
Cyprus 78% 67% 73%
Czech Republic 80% 71% 79%
Denmark 33% 59% 36%Estonia 75% 63% 73%
Finland 0% 45% 7%
France 21% 0% 10%
Germany 67% 67% 67%
Greece 69% 71% 70%
Hungary 0% 0% 0%
Ireland 4% 56% 26%
Italy 56% 52% 55%
Latvia 48% 39% 45%
Lithuania 79% 68% 77%
Luxembourg 0% 56% 32%
Malta 0% 56% 26%
Netherlands 0% 56% 6%
Poland 84% 76% 82%
Portugal 65% 69% 66%Romania 84% 73% 82%
Slovakia 70% 57% 69%
Slovenia 78% 71% 76%
Spain 70% 62% 67%
Sweden 0% 56% 15%
United Kingdom 17% 62% 31%
Median 66% 62% 66%
Source: Based on our calculations; see appendix for details on the calculation of rates.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 426/512
14
There is now extensive data and research on the results of surcharging.24 We know from the
experience of countries in Europe, and elsewhere, that most merchants do not surcharge when given
the opportunity to do so. Some, however, use the ability to surcharge to act opportunistically
towards consumers and exploit them. Depending on the interpretation, the proposed legislation also
allows merchants that have agreed to accept cards from a three-party system to selectively refuse to
take some of the system’s cards for payment.25 For example, a merchant could potentially choose to
accept an American Express corporate card but not take the classic green consumer card product.
When any merchant does that it creates uncertainty for consumers on whether other merchants will
do the same.
In the eyes of consumers the regulations make the cards of three-party systems less
desirable. Consumers may see signs at merchants alerting customers that they will surcharge certain
three-party system cards. And consumers that have these cards will occasionally face opportunisticsurcharging. The proposed legislation therefore seeks to incite the merchant community to
participate in what would become a massive advertising campaign against the three-party card
companies. Consumers will learn in no uncertain terms that if they want to be confident that they
can use their cards to pay and be safe from opportunistic merchant behavior they should stick to
MasterCard and Visa. The proposed legislation will taint the smaller three-party systems, which have
been the main source of new competition in many countries, with a badge of inferiority and will
create a two-tier structure of card products in which the three-party cards are inherently open to and
most likely to be subject to unfavorable treatment.
The legislation also appears to impose open-access regulation on these three-party systems.
To understand the implications of this requirement a short digression into the modern business
24 See, for example, European Commission (2001), “Commission Decision of 9 August 2001 Relating to a ProceedingUnder Article 81 of the EC Treaty and Article 53 of the EEA Agreement,” Case No. COMP/29.373 (VisaInternational), 2001 O.J. (L 293) 24. Available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32001D0782&from=EN. European Commission (2006), “Interim Report IPayment Cards: Sector Inquiry Under Article 17 Regulation 1/2003 on Retail Banking.” Available athttp://ec.europa.eu/competition/sectors/financial_services/inquiries/interim_report_1.pdf. London Economics, iff,and PaySys (2013), “Study on the Impact of Directive 2007/64/EC on Payment Services in the Internal Market and onthe Application of Regulation (EC) No 924/2009 on Cross-Border Payments in the Community.” Available athttp://ec.europa.eu/internal_market/payments/docs/framework/130724_study-impact-psd_en.pdf. Reserve Bank of
Australia (2007), “Reform of Australia’s Payments System: Issues for the 2007/08 Review.” Available athttp://www.rba.gov.au/payments-system/reforms/review-card-reforms/pdf/review-0708-issues.pdf. Reserve Bank of
Australia (2011), “Review of Card Surcharging: A Consultation Document.” Available athttp://www.rba.gov.au/publications/consultations/201106-review-card-surcharging/pdf/201106-review-card-surcharging.pdf. Reserve Bank of Australia (2012), “A Variation to the Surcharging Standards: Final Reforms andRegulation Impact Statement.” Available at http://www.rba.gov.au/payments-system/reforms/cards/201206-var-surcharging-stnds-fin-ref-ris/pdf/201206-var-surcharging-stnds-fin-ref-ris.pdf.
25 See Article 10, proposed MIF Regulation.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 427/512
15
model of these three-party systems is helpful.
Some of the standalone card companies have decided to enter into selective partnerships
with banks to help expand their businesses.26 This strategy helps them secure scale economies and
network effects by issuing more cards and acquiring transactions in countries where they might
otherwise have no presence, and thereby makes them stronger competitors to the large four-party
systems in those countries and globally. Partnerships also enable three-party systems to enter
countries without making significant investments and thereby reduce barriers to entry into the
payments sector of these countries. American Express used this strategy starting in the late 1990s to
enter 17 EU countries, mainly less wealthy ones as mentioned above, through partnerships with
financial institutions. Diners Club also has bank partners in 8 countries that it has developed over
the last several decades.
The European Commission and European Parliament proposals apparently require three-party systems to enter into partnerships on the basis of objective, proportionate and non-
discriminatory criteria with ny nd l l banks or payment institutions that want to issue or acquire
cards for three-party systems if those systems make a deal with a single bank or payment institution
in the EU. That requirement increases entry barriers for three-party systems into domestic payment
markets because a decision to enter into a bank partnership triggers a requirement to provide access
to banks throughout the EU as a result. As a practical matter the proposed legislation appears to
subject the small three-party systems to “essential-facility” regulation that is commonly applied to
domestic monopolies in energy, ports, and telecom. Such an approach imposes entirely
disproportionate burdens and has no basis in competition or regulatory policy.
Finally, the proposed legislation appears to subject the three-party systems to price caps as
well. Whenever the three-party system enters into a licensing deal to issue a card, it appears the
system would be subject to the MIF price caps developed for and applied to four-party systems. It isunclear how the proposed legislation envisions this provision would apply in practice. The three-
party systems do not establish an interchange fee that flows from an acquiring bank to an issuing
bank. They do enter into a bilateral negotiation with a potential partner—which may have its own
valuable brand and other assets in a particular country—over the allocation of revenues resulting
from their joint activities. The viability of these confidential and bilateral negotiations appears under
threat.
Beyond the issue of practicality is the question of what the possible justification for the price
caps could be. The European Commission and other competition authorities that have challenged
interchange fees for four-party systems have claimed that these fees violate the competition laws
26 Visa used to prohibit its member banks from entering into these partnerships. Antitrust action taken by the European
Commission forced it to allow these partnerships.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 428/512
16
because they are set collectively and have also pointed to the dominant position of these four-party
systems in a claimed market for debit, credit, and charge cards. To my knowledge, no competition
authority, regulatory authority, or court has complained about commercial terms that are agreed
bilaterally and it is hard to see under what basis these authorities could do so. Likewise, no
competition authority, regulatory authority, or court, at least to my knowledge, has found that the
merchant fees agreed between merchants and three-party systems are anticompetitive. Given the
small European wide share that three-party systems have, in total, of debit, credit and charge card
volume (the market identified by the European Commission) none of these systems is even remotely
dominant.27
The rationale for capping interchange fees does not apply to the financial terms that three-
party systems negotiate with a licensee that issues cards. Interchange fees are direct payments from
the merchant’s acquirer to the cardholder’s issuer and are typically passed on by the acquirer to themerchant. Competition and regulatory authorities have sought to reduce the impact of interchange
fees on merchants and have done so by capping those fees. There is no pass through, however,
between the fees that a three-party system negotiates individually with a licensee and the fees that
the three-party system, or an acquiring partner, negotiates with merchants.
These proposed regulations of smaller three-party payment card systems are unprecedented
outside the EU.28 What is remarkable is the length to which the proposed legislation has gone to
squelch competition by three-party card systems. The proposed legislation impairs the ability of
these smaller systems to compete by permitting merchants to surcharge the smaller three-party
systems but not the larger four-party ones and by making it costly for three-party systems to enter
into select partnerships. But, then, just in case (against the odds) the three-party systems are
successful, the proposed legislation empowers the European Commission to impose even more
restraints if they surpass some undefined threshold.
27 The proposed legislation involving MIFs exposes three-party systems to other risks. In the text proposed by theEuropean Parliament, the entire set of interchange fees regulations for four-party systems can be applied to three-partysystems that exceed a threshold set by the European Commission. In practice, it is difficult to envision what this means.See Amendment 21, European Parliament, “Amendments adopted by the European Parliament on 3 April 2014 on theproposal for a regulation of the European Parliament and of the Council on interchange fees for card-based paymenttransactions (COM(2013)0550 – C7-0241/2013 – 2013/0265(COD))”. April 3, 2014. Available at:http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0279+0+DOC+XML+V0//EN. 28 Spain recently adopted the Commission’s proposals on this issue word-for-word, pending the adoption of final
legislation (at which point Spain indicated it would be prepared to reverse course).
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 429/512
17
V. IMPACT OF PROPOSED LEGISLATION ON COMPETITION IN THE
EUROPEAN UNION
The proposed payments legislation has an Alice-in-Wonderland “up is down, left is right”
flavor to it. In the name of “nurturing” competition the European Commission and European
Parliament have come up with an approach that places an oppressive thumb on the smallest
competitors, discourages the challengers, and weakens competition between the two giant systems
left standing. Despite a vision of creating a European born-and-bred system the legislation pushes
and shoves consumers to the dominant global brands. Then, in a final flourish, the legislation
threatens the smaller systems with even more regulation if they are nonetheless able to continue
providing a degree of increased competition. This is legislation that only Lewis Carroll could have
written.
A. R ESTRAINING THREE-P ARTY S YSTEMCOMPETITION
The proposed payments legislation restrains the ability of three-party systems to compete
with the four-party card schemes, which are based on networks of banks, in at least three ways.
First, it imposes rules that make cards from the dominant four-party bank card systems
“preferable”—in the sense of having fewer regulatory-imposed annoyances—for cardholders and
merchants than cards from the smaller three-party systems. Consumers will learn that the three-party
system cards are the ones that merchants can surcharge, possibly opportunistically, and rejectaltogether even though the merchant has a sign at their store claiming they accept the card.
Consumers may find this out directly, from the media, or from friends, family and colleagues. It is
easy to imagine the media reports advising consumers to stick with the major brands—MasterCard
and Visa—to avoid having merchants subject them to a surcharge.
Second, the legislation could result in the three-party systems simply withdrawing as
competitors in countries where they operate with a bank or payment institution partner. A single
partnership agreement, anywhere in the European Union, exposes a three-party system to the risk
that banks, including members of MasterCard and Visa, will insist on being able to issue or acquire
the three-party system’s cards as well. Under the legislation a three-party system that has entered a
partnership with a single bank or payment institution, anywhere in the EU, may be required to offer
the same terms to every other bank or payment institution that approaches the system. No longer
could a three-party system decide to partner selectively and to do so in countries of its own
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 430/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 431/512
19
prospect would likely deter Cetelem from ever considering partnerships and therefore limit its ability
to compete on a pan-European basis.
More importantly, the legislation makes the EU a very unwelcome area for entry by any new
three-party system. Suppose, for example, that a three-party global mobile payments system emerges
and that system needs to consider where to enter around the world. The EU will be the only place in
the world in which merchants are allowed to surcharge, and reject, the cards of three-party systems
but not of MasterCard or Visa. Suppose, as is common in mobile payments, the three-party system
wanted to partner with a bank to enter the EU or a Member State. It could not guarantee its partner
an exclusive deal and, if it entered into a relationship in any country, it would potentially have to
extend that deal to all banks and payment institutions in that country and the other EU countries as
well and be price capped when doing so.
B.
SOFTENING FOUR -P ARTY S YSTEMCOMPETITION
The European Parliament’s payment legislation weakens competition among the four-party
systems.
To begin with it softens competition between MasterCard and Visa. They won’t be able to
use the interchange fee to compete for issuers, consumers, or merchants. No longer would one of
these companies be able to lower their interchanges fees for a particular type of merchant to secure
acceptance, to increase their interchange fees to persuade banks to switch card volume to them, or
to increase their interchange fees to promote benefits that could attract more cardholders.
Four-party systems have used selective reductions in interchange fees to promote newtechnologies such as chip-and-pin cards and contactless cards. They would lose that ability under the
payments legislation: with such a substantial reduction in these fees it is unlikely they could persuade
banks to accept an even lower fee. If one of the systems came up with a technology for accepting
payment at the point of sale—for example related to mobile payments—it would lose one of its
main tools for persuading merchants to invest in the necessary changes. MasterCard and Visa will of
course continue to compete but will do so with one hand tied behind their backs.
The payments legislation weakens competition among the global four-party systems and the
independent domestic systems for these same reasons. None of these systems will be able to agree
to higher interchange fees to compete for banks and consumers. And, with the drastic reductions,
few if any could risk bank defections if they wanted to lower interchange fees further to promote
innovative technologies or business practices by the merchants.
The threat to domestic competition though is actually much worse. An independentdomestic system could not offer banks a somewhat higher interchange fee to induce them to switch
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 432/512
20
from the domestic MasterCard or Visa network. That eliminates an important competitive tool.
Once the payments legislation makes all systems exactly the same when it comes to interchange fees
the advantage of switching to a system that lacks the scale economies, brand recognition, and
marketing prowess of MasterCard and Visa is lessened. The proposed legislation places the survival
of the domestic systems at risk and it is conceivable that they will wither over time or simply become
appendages of the global four-party networks.
Lastly, the very low interchange fee caps proposed by the European Parliament largely gut
the business models of new four-party entrants. As I’ve noted this isn’t mere conjecture. We have
the dead body to prove it. A substantial viable pan-European entrant gave up when the European
Commission wouldn’t relent on its insistence that four-party systems have not only low interchange
fees but interchange fees that can’t be any higher for any country, industry, product, transaction
type, or anything else.
C. THE ANTICOMPETITIVE P AYMENTS LEGISLATION
The European Commission and the European Parliament have put forward legislation that
is anti-competitive. It fixes the interchange fee that MasterCard and Visa use to compete with each
other and independent domestic schemes. It places independent domestic schemes that would be
less able to differentiate themselves at a disadvantage. After the Commission helped destroy a major
pan-European entrant, the proposed legislation raises a barrier to further entry by any potential new
payment systems. As a finishing touch it hobbles all of MasterCard and Visa’s three-party system
rivals. Almost two decades ago, when Visa proposed rules to prohibit three-party systems from
pursuing arm’s length licensing agreements with banks that were members of Visa, the European
Commission claimed competitive harm and acted swiftly to prevent it. It seems perverse now that
the EU is at risk of delivering the same outcome for Visa and legitimizing the endeavor that it
previously claimed was anticompetitive.29
29 As per the following press release the Commission's Directorate General for Competition reached the view that Visa's proposed rule prohibiting its member banks from partnering with American Express would have infringed theEC competition rules because it would have restricted competition between international cards systems as well asbetween banks which issue cards riding on those systems. Moreover, at the time, the Commission confirmed itsdetermination to ensure that access to the payments card market by new competitors such as three-party schemes should
not be impeded. http://europa.eu/rapid/press-release_IP-96-585_en.htm.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 433/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 434/512
22
Figure 2: Average Debit Interchange Fees versus Per Capita GDP in EU Countries
Source: European Central Bank.
The extent of the redistribution from merchants to consumers varies enormously across
countries. Consumers in high-interchange fee countries such as Romania will lose much more
relatively speaking than consumers in low-interchange fee countries such as Denmark. Figure 2
shows the relationship between the average debit card interchange fee in each country and GDP per
capita. The graph shows that the debit card interchange fee is higher in countries with lower per
capita GDP. The countries that will have the largest reductions in interchange fees, and therefore
the greatest harm to consumers, are the poorest countries; the countries that will have the lowest,
and in some cases no, reductions in interchange fees and therefore the least harm to consumers are
the richest countries. There are exceptions, of course, but that is the general rule. The interchange
fee caps take from the consumer and give to the merchant, and they take the most from the poorest
consumers. As I said, this is Alice-in-Wonderland public policy.
The EU payments legislation harms European consumers in other ways. Approximately ! 88
billion was spent in 2012 by Europeans using cards from three-party systems in the Member States
AustriaBelgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
0 !
10 !
20 !
30 !
40 !
50 !
60 !
70 !
80 !
90 !
0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40%
G D P p e r C a p
i t a ( E u r o 0 0 0 s )
Debit Interchange Fee (%)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 435/512
23
that account for more than 90 percent of GDP and population. Consumers will also face occasional
opportunistic surcharging by merchants on such purchases. A consumer also risks having merchants
that advertise that they accept a three-party system brand turn around and reject the particular card
the consumer presents. In the longer run consumers are also likely to find that they have less choice
than they have now as independent domestic card systems and three-party systems are forced to
withdraw from the payment card market in countries across the EU. Consumers are also likely to
have even less choice than they would get in the absence of the payments legislation. That’s because
the legislation will reduce entry into payments cards in the European Union.
VII. CONCLUSION
The European Commission’s proposal and the common position reached by the European
Parliament in April 2014 is ill-conceived and poorly thought through. This is no surprise, given how
woefully inadequate—and in some areas, completely lacking—the impact assessment undertaken by
the Commission is. The proposed legislation destines Europe to having a payment card industry
operated largely by banks and run by two global brands. The prospect of low caps on interchange
fees has already killed or chilled the prospects for the emergence of a new pan-European payment
system. Those caps will temper competition between MasterCard and Visa and may drive
independent domestic systems out of business altogether over time. The bizarre restraints on the
three-party systems in European countries, all of them much smaller than their four-party rivals
across Europe, will make these companies less vibrant competitors and may drive them out of many
countries in Europe. For European consumers the proposed payments legislation would lead to ahefty price tag, diminished choice, and depressed innovation.
The European Council would be wise to discard this legislation as currently drafted. Any
new legislation should completely abandon restraints on the three-party systems that are essentially
fringe competitors in Europe. There is simply no sensible rationale for these restraints and none has
been offered. New legislation should also drop the caps on interchange fees. These caps weaken
competition between MasterCard, Visa, and independent domestic card systems. They also shift the
costs of payment cards to consumers and will cost European consumers billions of euros in added
fees.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 436/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 437/512
25
Table A: Interchange Fees for Large Domestic Card Systems
Country System Type Interchange Fee (Actual) Interchange Fee (%)
Denmark Dankort Debit 0.20%36 0.20%
France Cartes Bancaires Credit 0.28% + fraud adjustment
averaging no greater than 0.03%37
0.31%
Germany ZKE Debit 0.30%38 0.30%
Italy PagoBancomat Debit 0.1309% + !0.1039 0.34%
Portugal MB Debit 0.50%40 0.50%
Spain Servired Credit 0.76%41 0.76%
Spain Euro 6000 Credit 0.79%42 0.79%
Spain 4b Credit 0.75%43 0.75%
Spain Servired Debit !0.3344 0.69%
Spain Euro 6000 Debit !0.3245 0.66%
Spain 4b Debit !0.3046 0.62%
Cases with a flat interchange fee were converted to percentages of the transaction using the
same method used for Visa and MasterCard.
36 Denmark’s Dankort pays issuers a flat fee per transaction, where the level of the flat fee depends on the issuer’sannual number of transactions. In general, this fee is less than 0.20 percent, although it may be higher on small-valuetransactions. Ministry of Growth and Business Denmark, “Interchange Fee Regulation and Domestic Debit CardSchemes,” June 2, 2014. Available at http://www.eu-oplysningen.dk/upload/application/pdf/ca7ff3c0/201305502.pdf?download=1. The exact average interchange feeappears to be non-public.37 Cartes Bancaires, “Current CB Multilateral Interchange Fees and Tariffs.” Available at http://www.cartes-bancaires.com/IMG/pdf/CB_Interchange_Fees_and_Tariffs.pdf; PaySys, “French Anti-Trust Authority Decision on
MIF,” PaySys SEPA Newsletter, June-July 2011. Available at http://www.paysys.de/download/SepaJunJul11.pdf.38 Der Handel, “Bundeskartellamt kippt Girocard-Gebühr,” April 8, 2014. Available athttps://www.derhandel.de/news/finanzen/pages/Bundeskartellamt-kippt-Girocard-Gebuehr-10503.html.39 Conzorzio Bancomat, “Commissioni Interbancarie.” Available athttp://www.bancomat.it/it/consorzio/commissioni.html.40 David S. Evans and Rosa Abrantes-Metz (2013), “The Economics and Regulation or the Portugese Retail PaymentsSystem.” Available at http://www.sibs.pt/export/sites/sibs_fps/pt/documentos/The-Economics-and-Regulation-of-the-Portuguese-Retail-Payments-System_2013.pdf.41 Servired, “Tasas de Intercambio: Intra-Sistema.” Available at http://www.servired.es/tasas-de-intercambio/intra-sistema/.42 Euro 6000, “Tasas de intercambio: Intra-Sistema.” Available at http://www.euro6000.com/informacion-corporativa/tasas/intrasistema.43 4B, “Tasas de intercambio.” Available at http://www.4b.es/productos-y-servicios/comercios/tasas-de-intercambio.44 Servired, “Tasas de Intercambio: Intra-Sistema.” Available at http://www.servired.es/tasas-de-intercambio/intra-sistema/.45 Euro 6000, “Tasas de intercambio: Intra-Sistema.” Available at http://www.euro6000.com/informacion-corporativa/tasas/intrasistema.
464B, “Tasas de intercambio.” Available at http://www.4b.es/productos-y-servicios/comercios/tasas-de-intercambio.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 438/512
26
Next, we calculated the median debit and credit interchange rate for each country, taking the
median across all systems. Then we calculated an overall average interchange rate as a weighted
average of the debit and credit interchange rates, using each product type’s share of all payment card
spending in the country as the weights. Data on the value of debit and credit card payments were
taken from 2012 data from the European Central Bank.47
47 European Central Bank, Statistical Data Warehouse. Available at
http://sdw.ecb.europa.eu/reports.do?node=1000001431.
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 439/512
Electronic copy available at: http://ssrn.com/abstract=1950474
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
;1'&<)=); , (0 ,&>('=1< ,? @*&<* 1A :@32=B*=0&0 93(2A1<:*
!"#$% '( )#"*+ ,
( ,*2<(C2
!"#$%&'%()( +#,$-./0' '"12 ,' )312,45)'6 '),/12 )45%4)'6 '.1%,# 4)$7./8'6 ,4( '.-$7,/)
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
+,/$ .- , +/%9,$) 5.9)/4,41) 0)12,4%'0 -./ (),#%45 7%$2 :,( :)2,9%./ .- '.0) +#,$-./0"')/' $2,$ 2,/0 .$2)/ "')/'<
J KLMK N,9%( O< P9,4'<Q R2,%/0,46 S#.:,# P1.4.0%1' S/."+T U)1$"/)/6 V4%9)/'%$; .- R2%1,5. U,7 O12..#T
W%'%$%45 G/.-)''./6 X,1"#$; .- U,7'6 V4%9)/'%$; R.##)5) U.4(.4< Y 7."#( #%8) $. $2,48D%12,/( P+'$)%4 ,4( D%12,/( O120,#)4')) -./ 2)#+-"# 1.00)4$'T U,"/)4 R2%,456 Z,1F")#%4)
!"/+2;6 O$)9)4 Z.;1)6 !,/5,/)$ O12%#$6 ,4( [%82%# ="#,(2,/ -./ )31)##)4$ /)'),/12 2)#+T ,4(S..5#) -./ /)'),/12 -"4(%45< [.4) .- $2)') %4(%9%(",#' ./ )4$%$%)' 4)1)'',/%#; ,5/))' 7%$2 0),4( Y /)$,%4 '.#) .74)/'2%+ .- ,4; )//./'<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 440/512
Electronic copy available at: http://ssrn.com/abstract=1950474
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"#" ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
2 (,3& 1A C1)2&)2*
Y< =)2<10@C2=1) <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKLK
YY< :@32=B*=0&0 93(2A1<: *2<(2&;=&* A1<
=)C<&(*=); '(3@& <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKL\
><
=]P GU>=X^D! =^^U_Y= <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKL ̀
?<
W >UVP RDP>=Y^[ >[N Pa=PD[>UY=YPO <<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<< <<< MKML
R< W >UVP NYO=DY?V=Y^[ >[N R^^DNY[>=Y^[ <<<<<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<< MKMM
YYY< ,(0 ,&>('=1< ()0 93(2A1<: C1::@)=2=&* <<<<<<<<<<<<<<<<<< MKMK
><
Y = ^VS]= =^ ?P > RDY!P <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKMb
?< G^^D >[N >Oc!!P=DYR Y[X^D!>=Y^[ <<<<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<<< MKMd
R< R^[SPO=Y^[ >[N ^G=Y!YeY[S G]cOYR>U OG>RPO <<<<<<<<<<<<<<<<<<<<< <<< MKMf
N< R >OP Y[ G^Y[=g NPR^D ! c P cPO <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKMf
P< ? >N ?P]>WY^D >[N GU>=X^D! W >UVP <<<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<<< < MKMh
YW< 0&(3=); +=2> ,(0 ,&>('=1< <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKMh
>< =]P GD^GPD=c D YS]=O XD>!Pi^D_ <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKKL
?< OPUPR=YWP PaRUVOY^[ <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKKK
R<
Y[X^D!>=Y^[ >[N =D>[OG>DP[Rc <<<<<<<<<<<<<<<<<<< <<<<<<<<<<<<<<<<<<<<<<< <<<<<<< MKKd
W< ;1'&<)()C& <&;=:&* A1< D&? 93(2A1<:* <<<<<<<<<<<<<<<<<<<<< MKKf
>< O^RY>U [P=i^D_O <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKKf
?<
O =^R_ PaR]>[SPO <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKjM
R<
OP>DR] P[SY[PO <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKjd
WY<
9<='(2& '*I 9@,3=C ;1'&<)()C& =) 2>&
<&;@3(2=1) 1A ,(0 ,&>('=1< 1) 93(2A1<:* <<<<<<<<<<<<<< MKbL
>< =]P ?P[PXY=O ̂ X GDYW>=P D PSVU>=Y^[ <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKbM
?< >[=Y&R^!GP=Y=YWP PaRUVOY^[g > GD^G^OPN =]DPP&O =PG
>[>UcOYO <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKbj
WYY<
C1)C3@*=1) <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< MKb`
=I =)2<10@C2=1)
Y- ;." 7%4 ,4 ,"1$%.4 .4 )?,; :"$ (. 4.$ 5)$ $2) 5..(6 ./ $2) 5..( %'4.$ 72,$ 7,' ,(9)/$%')(6 ;." 1,4 1.0+#,%4 $. $2) )&1.00)/1) '%$) %4,((%$%.4 $. 5%9%45 $2) 0)/12,4$ , #.7 /,$%45< =2) '%$) 0,; ()1%() $. +"4%'2$2) 0)/12,4$6 %41#"(%45 +/.2%:%$%45 $2)0 -/.0 )9)/ ')##%45 ,5,%4 .4 )?,;<
!)/12,4$' /)1)%9) +/.$)1$%.4' $..< R.4'"0)/' ,/) /)F"%/)( $. +,; -./ ,4;%$)0 $2); 7%4 %4 ,4 ,"1$%.4 ,4( 1,4 :%( .4#; %- $2); %4$)4( $. :"; $2) %$)0$2,$ $2); 7%4< >0.45 .$2)/ $2%45'6 $2)') /"#)' +/.2%:%$ 1.4'"0)/' -/.0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 441/512
Electronic copy available at: http://ssrn.com/abstract=1950474
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"#7
:%((%45 %4 ')9)/,# ,"1$%.4' -./ '%0%#,/ %$)0' ,4( $2)4 .4#; +,;%45 -./ $2)12),+)'$ %$)0 $2); 2,9) 7.4<M R.4'"0)/' $2,$ 2,9) $.. 0,4; "4+,%( %$)0'1,4 #.') $2)%/ :";%45 +/%9%#)5)'<K )?,; 2,' , ';'$)0 $2,$ 5.9)/4' :,( :)2,9%./:; $2) 1.4'"0)/' ,4( 0)/12,4$' $2,$ "') %$' 7):'%$)< !,4; .$2)/ :"'%4)'')'$2,$ ,/) 0"#$%&'%()( +#,$-./0'6 #%8) )?,;6 ,#'. 2,9) 5.9)/4,41) ';'$)0' -./(),#%45 7%$2 :,( :)2,9%./ $2,$ 1/),$)' 4)5,$%9) )3$)/4,#%$%)'j ,1/.'' +#,$-./0+,/$%1%+,4$'< =2%' >/$%1#) )3,0%4)' $2)') 5.9)/4,41) ';'$)0' ,4( )3+#./)'$2) /)#,$%.4'2%+ :)$7))4 $2) +":#%1 ,4( +/%9,$) 1.4$/.# .- 4)5,$%9))3$)/4,#%$%)'<
!"#$%&'%()( +#,$-./0' 1/),$) 9,#") :; 2)#+%45 $7. ./ 0./) (%--)/)4$ $;+)'.- "')/'6 72. 1."#( :)4)-%$ -/.0 5)$$%45 $.5)$2)/6 -%4( ,4( %4$)/,1$ 7%$2 ),12
.$2)/6 ,4( )312,45) 9,#")<b
=2); %41#"() '.-$7,/) +#,$-./0' H)<5<6 >++#)C'%^OI6 -%4,41%,# )312,45)' H)<5<6 [>ON>kI6 '),/12 )45%4)' H)<5<6 !%1/.'.-$C'?%45I6 '.1%,# 4)$7./8' H)<5<6 U%48)(Y4I6 '2.++%45 0,##' H)<5<6 i,$)/ =.7)/G#,1) %4 R2%1,5.I6 ,(9)/$%'%45&'"++./$)( 0)(%, H)<5<6 R[[I6 ,4( )&1.00)/1)'%$)' $2,$ 1.44)1$ :"'%4)'')' ,4( '2.++)/' H)<5<6 >0,@.4I<d !"#$%&'%()(+#,$-./0' '.#9) , $/,4',1$%.4 +/.:#)0f $2,$ +/)9)4$' $2)') (%--)/)4$ $;+)' .-"')/' -/.0 5)$$%45 $.5)$2)/ .4 $2)%/ .74 $. )312,45) 9,#")< =2)/) ,/)+.'%$%9) )3$)/4,#%$%)' :)$7))4 $2) 0"#$%+#) $;+)' .- "')/'< G#,$-./0' +/.9%()
M< X./ 5"%(,41) /)#,$%45 $. $2) /"#)' -./ :";)/' ,4( ')##)/' .4 )?,;6 +-- ./0-+ 1 230$4$-+ 6P? >c 6 2$$+gll+,5)'<):,;<1.0l2)#+l+.#%1%)'l.9)/9%)7<2$0# H#,'$ 9%'%$)( >"5< M6 KLMMI<
K< X./ )?,;C' +.#%1%)' .4 "4+,%( %$)0' +-- 5*6"$% 78-9 230$4: 6 P? >c 62$$+gll+,5)'<):,;<1.0l2)#+l+.#%1%)'l"4+,%(&%$)0<2$0# H#,'$ 9%'%$)( >+/< Mh6 KLMKI<
j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i 6 GDY[RYGUPO ^X PR^[^!YRO KLbmL\ Hj( )(< KLLbI<
b< '-- ?)/4,/( R,%##,"( n ?/"4. Z"##%)46 ;<$4=-* "*% )>>? ;396-8$8$3* @93*>7*8-A9-%$"8$3* '-A#$4- 2A3#$%-A+ 6 jb D>[N Z< ^X PR^[< jL`6 jL`mjML HKLLjIT Z),4&R2,/#)'D.12)$ n Z),4 =%/.#)6 20"8B3A9 ;396-8$8$3* $* CD3E'$%-% F"A=-8+ 6 M Z< ^X =]P PVD < PR^[< >OOC[ ``L6 ``L HKLLjI<
d< '-- >-*-A"00: N,9%( O< P9,4'6 '39- )96$A$4"0 @+6-48+ 3B F/08$E+$%-% 20"8B3A9 7*%/+8A$-+ 6 KD PW < ^X [P=i^D_ PR^[< M`M HKLLjIT N >WYN O< P W>[O n D YR]>DN OR]!>UP[OPP6 R >=>UcO= R^NPg =]P O =D>=PSYPO ?P]Y[N =]P i ̂ DUNCO !^O= N c[>!YR R^!G>[YPO HKLL\IT =2.0,' P%')40,446 S).--/); G,/8)/ n !,/'2,## i< W,4 >#'$;4)6 '8A"8->$-+ B3A CD3E '$%-% F"A=-8+ 6 hb ] >DW < ?VO< D PW < `K HKLLfI<
f< >' D.12)$ n =%/.#) .:')/9)6 $2) %4,++#%1,:%#%$; .- $2) R.,') =2)./)0 %' ,4)1)'',/; 1.4(%$%.4 -./ $2) )3%'$)41) .- , 0"#$%&'%()( +#,$-./0< Z),4&R2,/#)' D.12)$ n Z),4
=%/.#)6 CD3E'$%-% F"A=-8+? @ 2A3>A-++ .-63A8 6 j\ D>[N Z< PR^[ fbd6 fb` HKLLfI< i2)4 $2)R.,') =2)./)0 2.#('6 %4(%9%(",# "')/' 7."#( :) ,:#) $. )45,5) %4 9,#")&0,3%0%@%45)312,45) (%/)1$#;< '-- D.4,#( R.,')6 C<- 2A3G0-9 3B '34$"0 ;3+8 6 j Z< ^X U< n PR^[< M HM`fLI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 442/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"#L ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
7,;' $. +/.0.$) $2)') +.'%$%9) )3$)/4,#%$%)' ,4( $2)/):; 1/),$) 9,#") -./ $2)1.00"4%$; .- "')/' $2); ')/9)< \
i2)4)9)/ +).+#) ,4( :"'%4)'')' 5)$ $.5)$2)/6 ,4( %4 ,4; 1.00"4%$;6$2)/) ,/) 0,4; .++./$"4%$%)' -./ +).+#) ,4( :"'%4)'')' $. :)2,9) :,(#; ,4($. $2)/):; 5)4)/,$) 4)5,$%9) )3$)/4,#%$%)'< =2%' :,( :)2,9%./ 1,4 /)("1))1.4.0%1 )--%1%)41; ,4( %4 $2) )3$/)0) #),( $. $2) $/,5)(; .- $2) 1.00.4'<h !"#$%&'%()( +#,$-./0' '"12 ,' )?,; ()9)#.+ 5.9)/4,41) ';'$)0' $. /)("1)$2%' :,( :)2,9%./ ,4( 0%4%0%@) 4)5,$%9) )3$)/4,#%$%)'< =2%' >/$%1#) '2.7' $2,$0"#$%&'%()( +#,$-./0' ()9)#.+ ';'$)0' .- /"#)' ,4( +)4,#$%)' $. 0,4,5) 0,4;.- $2) ',0) 8%4(' .- +/.:#)0' $2,$ 1.00"4%$%)' '":A)1$ $. +":#%1 #,7' ,4(/)5"#,$%.4' -,1)< =2)') +#,$-./0' )4-./1) '"12 /"#)' :; )3)/1%'%45 $2)%/
+/.+)/$; /%52$' $. )31#"() "')/' -/.0 $2) +#,$-./0< Y4 '.0) 1,')'6 $2) /"#)',4( +)4,#$%)' %0+.')( :; $2) +#,$-./0 ,/) '%0%#,/ $.6 ,4( %4 '.0) 1,')' 1#.')'":'$%$"$)' -./6 /"#)' ,4( +)4,#$%)' ,(.+$)( :; , +":#%1 /)5"#,$./<
G/%9,$) 1.4$/.# %' #%8)#; $. :) 0./) )--%1%)4$ $2,4 '.1%,# 1.4$/.#` %4 (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)' %4 +#,$-./0 1.00"4%$%)'< =2) +#,$-./0 .74)/ 1,40.4%$./ :,( :)2,9%./ 0./) 1#.')#; ,4( (),# 7%$2 $2%' :)2,9%./ 0./) F"%18#;$2,4 1,4 , +":#%1 /)5"#,$./< !"#$%&'%()( +#,$-./0' -,1) ,4$%$/"'$ 1.0+#,%4$'1.41)/4%45 /)("1$%.4' %4 ')/9%1) ./ ()4%,# .- ')/9%1) :; $2) +#,$-./0< =2%'
>/$%1#) ,/5")' $2,$ $2) 1."/$' ,4( ,4$%$/"'$ ,"$2./%$%)' '2."#( )3)/1%') 1,"$%.4%4 ,'')''%45 $2)') 1#,%0' 72)4 $2) )31#"'%.4 ,$ %''") %' /)#,$)( $. +#,$-./05.9)/4,41) -./ (),#%45 7%$2 :,( :)2,9%./< Y$ +/.+.')' , $2/))&'$)+ $)'$ -./,4$%&1.0+)$%$%9) )31#"'%.4 %4 $2)') 1,')' %4 72%12 $2) :"/()4 '2%-$' $. $2)1.0+#,%4,4$ 72)4 $2) +#,$-./0 2,' )45,5)( %4 )31#"'%.4 ,' +,/$ .- ,4)'$,:#%'2)( %4$)/4,# 5.9)/4,41) ';'$)0<
N)'+%$) $2) +)/9,'%9)4)'' .- +/%9,$) 5.9)/4,41) ';'$)0' -./ :,(:)2,9%./6 $2)/) %' #%$$#) /)'),/12 .4 $2) $.+%1 ,4( 4.4) $2,$ )3,0%4)' $2)+":#%1 +.#%1; %''")' ,((/)'')( %4 $2%' +,+)/< D.12)$ ,4( =%/.#) 7)/) $2) -%/'$$. %()4$%-; $2) /.#) .- $2) +#,$-./0 ,' , /)5"#,$./ %4 $2)%/ ')0%4,# +,+)/ .4$7.&'%()( +#,$-./0'<ML ?."(/)," ,4( ],5%" +/)')4$ , ()$,%#)( ,4,#;'%' .-+#,$-./0 /)5"#,$%.4 ,4( 2%52#%52$ $2) -,1$ $2,$ +#,$-./0' #)9)/,5) , 7%()
9,/%)$;6 ,4( 4",41)( ')$6 .- %4'$/"0)4$' $. 0,3%0%@) 9,#")<MM ].7)9)/6 $2);$/),$ ,## 4.4&+/%1) %4'$/"0)4$' "')( :; +#,$-./0' ,' , -./0 .- /)5"#,$%.4 -./
\< '-- N,9%( O< P9,4' n D%12,/( O120,#)4'))6 C<- 7*%/+8A$"0 HA>"*$I"8$3* 3B F"A=-8+ D$8<CD3E'$%-% 20"8B3A9+ 6 j R^!GP=Y=Y^[ G^UC c Y[=CU MdM6 Mdb HKLL\I<
h< '-- >-*-A"00: S,//)$$ ],/(%46 C<- CA">-%: 3B 8<- ;3993*+ 6 MfK ORYP[RP MKbj HM`fhI<`< BO.1%,# 1.4$/.#E /)-)/' $. $2) )4-./1)0)4$ .- +":#%1 #,7' ,4( /)5"#,$%.4'<
ML< D.12)$ n =%/.#)6 +/6A" 4.$) b< '-- "0+3 P9,4' n O120,#)4'))6 +/6A" 4.$) \6 ,$ Mfj<MM< '-- _)9%4 Z< ?."(/)," n >4(/)% ],5%" J 20"8B3A9+ ./0-+? F/08$E'$%-% 20"8B3A9+ "+
.->/0"83A+ 6 $* GU>=X^D!O6 ! >D_P=O6 >[N Y[[^W>=Y^[ Mfj H>44,:)##) S,7)/ )(<6 KLL`I<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 443/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"#%
0,/8)$ -,%#"/)' ,4( 1.4'%()/ , 0"#$%$"() .- '$/,$)5%)' -./ ,((/)''%45 +.'%$%9),4( 4)5,$%9) )3$)/4,#%$%)'< =2%' >/$%1#) -.1"')' 4,//.7#; .4 $2) )3%'$)41) .-4)5,$%9) )3$)/4,#%$%)' ,0.45 +#,$-./0 "')/' ,4( $2) "') .- 5.9)/4,41)';'$)0' $. (),# 7%$2 $2%' :,( :)2,9%./< Y$ '2.7' $2,$ $2)') +/,1$%1)' ,/),4,#.5."' $. $2) 5.9)/4,41) ';'$)0' -./ 1.00"4%$%)'6 1#":'6 ,4( .$2)/'%0%#,/ )4$%$%)'<
=2) ,4,#;'%' 2)/) %' #..')#; /)#,$)( $. $2) -/,0)7./8 +"$ -./7,/( :;O$/,2%#)9%$@<MK ]) ,/5")' $2,$ +/.+)/$; /%52$' %41#"() ')9)/,# '":./(%4,$)/%52$' $2,$ )4,:#) +/%9,$) :"'%4)'')' $. (),# 7%$2 %4-./0,$%.4 ,';00)$/%)',4( )3,0%4)' $2) )3$)4$ $. 72%12 +/%9,$) +/.+)/$; /%52$' ,4( +":#%15.9)/4,41) ';'$)0' ,/) '":'$%$"$)'< =2%' >/$%1#) ,(.+$' 2%' -/,0)7./8 .-
'":./(%4,$) +/.+)/$; /%52$' :"$ $2)4 )3,0%4)' 2.7 $2)') /%52$' -,1%#%$,$) $2)()9)#.+0)4$ .- +/%9,$) 5.9)/4,41) ';'$)0' -./ 0"#$%&'%()( +#,$-./0' $2,$6#%8) +.#%$%)'6 0"'$ 5.9)/4 , 1.00"4%$; .- 0)0:)/' 72. 0,; %4$)/,1$+.'%$%9)#; ./ 4)5,$%9)#; 7%$2 ),12 .$2)/<
=2) 5.9)/4,41) .- :,( :)2,9%./ ,0.45 0)0:)/' .- +#,$-./01.00"4%$%)' %' , 7./$2; '":A)1$ -./ ')9)/,# /),'.4'<
X%/'$6 ,#$2."52 0"#$%&'%()( +#,$-./0' 2,9) )3%'$)( -./ $2."',4(' .- ;),/'6$2); ,/) :)1.0%45 ,4 %41/),'%45#; %0+./$,4$ +,/$ .- $2) -,:/%1 .- $2))1.4.0;< =2) ()9)#.+0)4$ .- $2) Y4$)/4)$ 2,' -,1%#%$,$)( $2) 1/),$%.4 .-$2)') +#,$-./0' ,4( '.0) .- $2)') +#,$-./0' 2,9) :)1.0) 5#.:,# :"'%4)'')'F"%$) /,+%(#;< X./ )3,0+#)6 X,1):..86 72%12 '$,/$)( %4 KLLb6 2,' 0./) $2,4hbd 0%##%.4 ,1$%9) 0.4$2#; "')/' 7./#(7%()6Mj %4$)5/,$)' 0./) $2,4 \ 0%##%.4,++#%1,$%.4' ,4( 7):'%$)'6Mb ,4( 2,( ,(9)/$%'%45 /)9)4") %4 KLMM .- 0./)
$2,4 oj<M :%##%.4<
Md
V4()/'$,4(%45 8); ,'+)1$' .- 2.7 $2)') +#,$-./0' 7./82)#+' %4 4"0)/."' 1.4$)3$' /,45%45 -/.0 :"'%4)'' $. #%$%5,$%.4<
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
MK< U%./ O$/,2%#)9%$@6 7*B3A9"8$3* @+:99-8A$-+ "*% 8<- .$><8+ 83 )K40/%- 6 MLb !YR]< U< D PW <Mhjd6 Mhjh HKLLfI<
Mj< X,1):..86 Y41<6 D)5%'$/,$%.4 O$,$)0)4$ HX./0 O&MI6 ,$ M HX):< M6 KLMKI6 "#"$0"G0- "8
2$$+gll')1<5.9l>/12%9)'l)(5,/l(,$,lMjKfhLMlLLLMM`jMKdMKLjbdM\l(Kh\`db('M<2$0<Mb< 7% < ,$ \d<Md< 7% < ,$ dL<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 444/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"#- ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
=2%/(6 $2) ,:%#%$; .- +#,$-./0' $. )4-./1) /"#)' 1.41)/4%45 4)5,$%9))3$)/4,#%$%)' /)'$' .4 :)%45 ,:#) $. +)4,#%@) ,4( "#$%0,$)#; )31#"() 0)0:)/'.- $2) 1.00"4%$;< =2,$ 4,$"/,##; #),(' $. (%'+"$)' $2,$ '.0)$%0)' )4( "+:)-./) 1."/$' ./ /)5"#,$./; ,"$2./%$%)'< =2)') %''")' ,/%') +,/$%1"#,/#; 72)4+)4,#$%)' ,/) #)9%)( ,5,%4'$ +#,$-./0 "')/' $2,$ +/.9%() ')/9%1)' $2,$ 1.0+)$)6./ 0%52$ 1.0+)$)6 7%$2 $2.') +/.9%()( :; $2) +#,$-./0< !,4; .- $2) 1"//)4$,4$%$/"'$ 1.0+#,%4$' ,5,%4'$ S..5#)6 -./ )3,0+#)6 %49.#9) 1.0+,4%)' $2,$+/.$)'$ $2,$ $2)%/ :"'%4)'')' 2,9) :))4 2,/0)( ,' , /)'"#$ .- /)("1$%.4' %4$2)%/ '),/12 /,48%45 ,4( $2,$ S..5#) 5%9)' +/)-)/)4$%,# $/),$0)4$ $. %$' .74
9)/$%1,# '),/12 ./ +/%1)&1.0+)4',$%.4 ')/9%1)'<Mf V4()/'$,4(%45 $2) /.#) .-/"#)' %4 +.#%1%45 4)5,$%9) )3$)/4,#%$%)' 1,4 2)#+ (%'$%45"%'2 +/.&1.0+)$%$%9)
-/.0 ,4$%&1.0+)$%$%9) :"'%4)'' +/,1$%1)' .- +#,$-./0 .74)/'< >-$)/ +/.9%(%45 , :/%)- %4$/.("1$%.4 $. 0"#$%&'%()( +#,$-./0'6 G,/$ YY
'%$",$)' $2) 5.9)/4,41) .- 4)5,$%9) )3$)/4,#%$%)' %4 $2) #,/5)/ ')$ .- +/,1$%1)'%4 72%12 0"#$%&'%()( +#,$-./0' )45,5) $. 0,3%0%@) $2) 9,#") $2); 5)4)/,$)-./ $2)%/ 1.00"4%$%)' ,' 7)## ,' -./ $2)0')#9)' %4 $2) -./0 .- +/.-%$'< G,/$YYY ()'1/%:)' '."/1)' .- 4)5,$%9) )3$)/4,#%$%)' ,4( /)#,$)' $2) +/.:#)0' -,1)(:; 0"#$%&'%()( +#,$-./0' $. +.#%$%)' ,' 7)## ,' .$2)/ :"'%4)'')' $2,$ 0"'$ (),#
7%$2 4)5,$%9) )3$)/4,#%$%)' 1/),$)( :; $2)%/ 1"'$.0)/'< G,/$ YW )3,0%4)' $2)5.9)/4,41) 0)$2.(' +#,$-./0' 2,9) ()9)#.+)( $. 0,4,5) $2)') +/.:#)0'< Y$(/,7' .4 /)'),/12 1.41)/4%45 $2) :"'%4)'' +/,1$%1)' .- 0"#$%&'%()( +#,$-./0'%4 , (%9)/') ')$ .- %4("'$/%)' ,4( .9)/ $%0)< G,/$ W +/.9%()' ()$,%#)()3,0%4,$%.4' .- -."/ )1.4.0%1,##; '%54%-%1,4$ %4("'$/%)' $2,$ 2%52#%52$+#,$-./0 5.9)/4,41)g '.1%,# 4)$7./8'6 '$.18 )312,45)'6 '),/12 )45%4)'6 ,4('.-$7,/) +#,$-./0'< G,/$ WY ,4,#;@)' $2) #)5,# ,4( +.#%1; %''")' $2,$ ,/%')-/.0 (%'+"$)' %49.#9%45 +#,$-./0 5.9)/4,41)< Y$ 1.4'%()/' $2) (%'$%41$%.4:)$7))4 )--%1%)4$ /)5"#,$%.4 .- 4)5,$%9) )3$)/4,#%$%)' ,4( ,4$%&1.0+)$%$%9))31#"'%.4 ,' 7)## ,' $2) "') .- '.1%,# 9)/'"' +/%9,$) 1.4$/.# .9)/ 4)5,$%9))3$)/4,#%$%)' %4 +#,$-./0 1.00"4%$%)'<
Mf< O)) U). R)4(/.7%1@6 C<- )(5( 2A3G-? 7+ L33>0- .$>>$*> 78+ '-"A4< .-+/08+M 6 =Y!P6 N)1<K6 KLML6 "#"$0"G0- "8 2$$+gll777<$%0)<1.0l$%0)l:"'%4)''l,/$%1#)lL6hd``6KLjbMjh6LL<2$0#T;396"*$-+ @+= )5 ;399$++$3* C3 '8-6 $* H* L33>0- '-"A4< ."*=$*> ;3960"$*8 6 Y=GD^G^D=>U HX):< Kb6 KLMLI6 2$$+gll777<%$+/.+./$,#<1.0lKLMLlLKlKbl1.0+,4%)'&,'8&)"&1.00%''%.4&'$)+&5..5#)&'),/12&/,48%45&1.0+#,%4$lT R#,%/) R,%4 !%##)/6 =)3,' G/.:)' S..5#) .4 D,48%45.- O),/12 D)'"#$'6 [<c< =Y!PO6 O)+$< j6 KLML6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLMLl
L`lLbl$)124.#.5;lLb5..5#)<2$0#p,(344#qMn,(344#3qMjMbMMjbh\&bO-8^LWlO"X3[-1D!(]8:kT N$*%-A+8"A8 '/-+ L33>0- H#-A O3D-A 2">- ."*=$*> 6 D PV=PDO6 !,/< M`6 KLLf6 "#"$0"G0- "8 2$$+gll777<"',$.(,;<1.0l$)12l4)7'lKLLf&Lj&M`&5..5#)&8%4()/'$,/$r3<2$0<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 445/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"#J
==I :@32=B*=0&0 93(2A1<: *2<(2&;=&* A1<=)C<&(*=); '(3@&
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
,4$%F") ')7%45 0,12%4)' :)1,"') %$ 1,4 ,55/)5,$) $2) ()0,4( .- 0,4;,4$%F") ')7%45 0,12%4) .74)/' ,4( 0,4; :";)/' ,4( 2)#+ :/%45 $2)0$.5)$2)/ $. )45,5) %4 $/,()'<
>## 0"#$%&'%()( +#,$-./0' )32%:%$ $2) ',0) :,'%1 -),$"/)' $2,$ 7) ')) 7%$2)?,;< >#$2."52 +#,$-./0' 1,4 2,9) 0./) $2,4 $7. (%'$%41$ 5/."+' .- "')/'6 M\ %$ %' 2)#+-"# $. ()'1/%:) $2)') :,'%1 -),$"/)' -./ , $7.&'%()( +#,$-./0<
X%/'$6 $2) +#,$-./0 :/%45' $.5)$2)/ $7. $;+)' .- "')/' $2,$ 1,4 5)4)/,$) 9,#") :; 1.0%45 $.5)$2)/< X./ )3,0+#)6 , +#,$-./0 0%52$ :/%45 $.5)$2)/ ,0,4 ,4( , 7.0,4 72. ,/) #..8%45 -./ 1.0+,4%.4'2%+6 , ')4()/ ,4( /)1)%9)/.- 0.4);6 , 0.:%#) '.-$7,/) ,++#%1,$%.4 ()9)#.+)/ ,4( , 0.:%#) +2.4) "')/6, '),/12 )45%4) "')/ ,4( ,4 ,(9)/$%')/6 ./ 0,4; .$2)/ 1.0:%4,$%.4'< =2)')$7. $;+)' .- "')/' 2,9) %4$)/()+)4()4$ ()0,4( -"41$%.4' -./ +#,$-./0')/9%1)' %4 $2) ')4') $2,$ $2) ()0,4( :; 0)0:)/' .- .4) 5/."+ -./ $2)
+#,$-./0 ()+)4(' +.'%$%9)#; .4 $2) ,:%#%$; $. ,11)'' ,4( )45,5) %4 9,#"))312,45) 7%$2 0)0:)/' .- $2) .$2)/ 5/."+<Mh
M\< X,1):..86 -./ )3,0+#)6 %' , -."/&'%()( +#,$-./0< Y$ %' , 1.00"4%1,$%.4' +#,$-./0-./ ')4()/' ,4( /)1)%9)/' .- %4-./0,$%.4< =2%' 1.00"4%1,$%.4' +#,$-./0 %' ,#'. .+)4 $.,(9)/$%')/' 72. 7,4$ $. /),12 $2) +).+#) $2,$ ,/) "'%45 X,1):..8 $. 1.00"4%1,$) 7%$2 ),12.$2)/< Y$ %' -"/$2)/ 0,() ,9,%#,:#) $. )4$/)+/)4)"/' 72. ()9)#.+ '.-$7,/) ,++#%1,$%.4's'"12,' '.1%,# 5,0)'s$2,$ /"4 .4 X,1):..8< =2)/) ,/) %4$)/()+)4()41%)' ,0.45 $2)') -."/5/."+' .- )1.4.0%1 "')/'< X,1):..86 Y41<6 D)5%'$/,$%.4 O$,$)0)4$6 +/6A" 4.$) Mj6 ,$ M<
Mh< =2) $7. $;+)' .- "')/' (. 4.$ 4)1)'',/%#; 4))( $. 9,#") ),12 .$2)/< Y$ %' '"--%1%)4$$2,$ %$ %' +.''%:#) $. 1/),$) 4)$ 9,#") :; +"$$%45 $2)0 $.5)$2)/< > 1.0+,4; 0,; 9,#")+/)')4$%45 ,(9)/$%'%45 $. , 1.4'"0)/ :"$ $2) 1.4'"0)/ 0,; :) %4(%--)/)4$ $. $2) ,(9)/$%'%45./ )9)4 7%##%45 $. +,; $. ,9.%( %$< O. #.45 ,' $2) 9,#") .- +/)')4$%45 ,(9)/$%'%45 $. $2)1.4'"0)/ %' 5/),$)/ $2,4 $2) 1.'$ $. $2) 1.4'"0)/ .- /)1)%9%45 %$6 $2)/) ,/) +.$)4$%,# 5,%4' $.$/,()< =2) /.#) .- , +#,$-./0 -./ ,(9)/$%'%45&'"++./$)( 0)(%, %' $. B+,;E $2) 1.4'"0)/ $. :)
)3+.')( $. ,(9)/$%'%45 :; +/.9%(%45 1.4$)4$< Y4 )--)1$6 $2) 0)(%, +#,$-./0 .74)/ "')' '.0).- $2) 0.4); $2,$ $2) ,(9)/$%')/ %' 7%##%45 $. +,; $. /),12 , "')/ $. -"4( 1.4$)4$ 1/),$%.4$2,$ %41)4$%9%@)' "')/' $. :) )3+.')( $. ,(9)/$%'%45 %4 /)$"/4 -./ B-/))E 0)(%, 1.4$)4$<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 446/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"#8 ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
O)1.4(6 $2) +#,$-./0 +/.9%()' , 4"0:)/ .- ')/9%1)' $. /)("1) $2)$/,4',1$%.4' 1.'$' -./ $2)') "')/' $. 1.0) $.5)$2)/ ,4( $. )312,45) 9,#")<
=2.') ')/9%1)' 1."#( %41#"() -,1%#%$%)' $. '),/12 ,4( 0,$12 "')/'6 $. -%5"/)."$ )312,45) 9,#")'6 ,4( $. ')$$#) $/,4',1$%.4'< > $;+%1,# -%4,41%,# )312,45)6-./ )3,0+#)6 2)#+' ,5)4$' -%4( 1."4$)/+,/$%)' $. , $/,() ,4( +/.9%()' -,1%#%$%)'-./ $2)0 $. 1.4'"00,$) , $/,() %4 ,((%$%.4 $. 0,4; .$2)/ 1.0+#)0)4$,/;')/9%1)'<
=2%/(6 $2) +#,$-./0 .74)/ 0,3%0%@)' +/.-%$ :; 12..'%45 +/%1)' ,4( .$2)/'$/,$)5%1 9,/%,:#)' $2,$ /)1.54%@) $2) %4$)/()+)4()41%)' :)$7))4 $2) $7.5/."+' .- "')/'< =2) )1.4.0%1 #%$)/,$"/) 2,' -.1"')( .4 +/%1%45 +.#%1%)'<M`
=2) +/.-%$&0,3%0%@%45 +/%1)' 0"'$ '.#9) , 1../(%4,$%.4 +/.:#)0 :)$7))4
$2) 0"#$%+#) '%()'< > 5/."+ .- "')/' 7%## "'",##; +#,1) 4. 9,#") .4 , +#,$-./0"4#)'' .4) ./ 0./) .- $2) .$2)/ 5/."+' .- "')/' ,/) ,#'. .4 $2) +#,$-./0<
=2) +/.-%$&0,3%0%@%45 +/%1)' 0,; :) ,$ ./ :)#.7 0,/5%4,# 1.'$6 ,4( 0,; :)@)/. ./ 4)5,$%9)6 ,4( $2)/)-./) /)-#)1$ , $;+) .- '":'%(; $. .4) '%()< KL H=2)'.1%,# 7)#-,/) 0,3%0%@%45 +/%1)' 2,9) $2) ',0) 12,/,1$)/%'$%1'6 ,#$2."52 $2)/)%' 4. 5",/,4$)) $2,$ $2) +/%9,$)#; ,4( '.1%,##; .+$%0,# +/%1)' 7%## 1.%41%()<KM I
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
=2%' G,/$ ()'1/%:)' 2.7 0"#$%&'%()( +#,$-./0' 0,3%0%@) ,4( ,##.1,$) 9,#") ,4( $2)/):; +/.9%()' , -/,0)7./8 -./ "4()/'$,4(%45 $2) /.#) .-5.9)/4,41) ';'$)0' %4 $2%' +/.1)''< O)1$%.4 YY<> ()'1/%:)' $2) ')$ .- $..#'$2,$ +#,$-./0' 2,9) ,9,%#,:#) $. $2)0< O)1$%.4 YY<? '2.7' 2.7 $2)') $..#' ,/)
M`< '--J -(>(6 P< S#)4 i);#6 @ 2A$4- C<-3A: 3B F/08$E'$%-% 20"8B3A9+ 6 MLL >!< PR^[< D PW <MfbK6 Mfb`mdb HKLMLI H(%'1"''%456 %4 +,/$6 9,/%."' +/%1%45 0.()#' ,' $2); /)#,$) $. 4)$7./8+#,$-./0'I<
KL< 7%( ,$ MfdKT Z),4&R2,/#)' D.12)$ n Z),4 =%/.#)6 +/6A" 4.$) b6 ,$ ``M6 ``K<KM< =2) +/%9,$)#; .+$%0,# +/%1)' ')$ :; , 0"#$%&'%()( +#,$-./0 0,; (%--)/ -/.0 $2)
'.1%,##; .+$%0,# +/%1)' %- $2) +#,$-./0 ')$' +/%1)' $.. 2%52 ,4( ."$+"$ $.. #.7< ?"$ %$ 0,;,#'. ')#)1$ , +/%1%45 '$/"1$"/) $2,$ (.)' 4.$ '.#9) $2) 1../(%4,$%.4 +/.:#)0 :)$7))4 $2)5/."+' .- "')/' ,' )--%1%)4$#; ,' , '.1%,# +#,44)/ 7."#(< '-- >#)3,4()/ i2%$) n P< S#)4 i);#67*+/0"8-% 20"8B3A9 ;396-8$8$3* ML6 M`6 K` H[P= Y4'$< i./8%45 G,+)/ [.< ML&M\6 KLMMI6 "#"$0"G0-
"8 2$$+gll+,+)/'<''/4<1.0l'.#jl+,+)/'<1-0p,:'$/,1$r%(qMf`bjM\<KK< '-- P W>[O n OR]!>UP[OPP6 +/6A" 4.$) d6 ,$ MjmMfT P%')40,446 G,/8)/ n W,4
>#'$;4)6 +/6A" 4.$) d6 ,$ jm\T ?."(/)," n ],5%"6 +/6A" 4.$) MM6 ,$ M\d<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 447/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"#M
"')( $. 1/),$) 9,#") ,4( %4 +,/$%1"#,/ $. 5)4)/,$) +.'%$%9) )3$)/4,#%$%)'<O)1$%.4 YY<R )3,0%4)' $2) /.#) .- 9,#") (%'$/%:"$%.4 %4 '.#9%45 $2)1../(%4,$%.4 +/.:#)0<
!" =]P GU>=X^D! =^^U_Y=
!"#$%&'%()( +#,$-./0 :"'%4)'')' 2,9) , 4"0:)/ .- $..#' -./ '.#9%451../(%4,$%.4 +/.:#)0' $2,$ 5)4)/,$) 9,#") -./ "')/'< =. :)5%4 7%$26 $2); 1,4()9%') , +#,$-./0 ()'%54 $2,$ -,1%#%$,$)' $2) %4$)/,1$%.4 .- $2) (%--)/)4$ $;+)'.- "')/'< c."=":)6 -./ )3,0+#)6 /)1.54%@)( , #,$)4$ ()0,4( -./ .4#%4) 9%().'2,/%45< =. 0))$ $2%' ()0,4( %$ ()'%54)( , '.-$7,/) ,4( 2,/(7,/) +#,$-./0$2,$ )4,:#)( +).+#) $. "+#.,( ,4( 9%)7 9%().'< Y$ %41#"()( -),$"/)' $2,$
2)#+)( +).+#) 72. "+#.,()( 9%().' $. -%4( ,4 ,"(%)41) ,4( 2)#+)( +).+#) 72. 7,4$)( $. 9%)7 9%().' $. -%4( .4)' $2); 7."#( )4A.;<Kj
G#,$-./0' ,#'. +/.9%() '+)1%-%1 +,18,5)' .- +/.("1$' ./ ')/9%1)' $. ),12$;+) .- "')/ $. -,1%#%$,$) 1../(%4,$%.4< >' 7%$2 , '%45#)&'%()( :"'%4)''6 $2)+#,$-./0 2,' $. ()1%() .4 $2) .+$%0,# 1.0:%4,$%.4 .- +/.("1$ ,$$/%:"$)' ,4(+/%1)< =2) (%--)/)41) %4 $2) 1,') .- , 0"#$%&'%()( +#,$-./0 %' $2,$ .--)/%45'$2,$ %4("1) "')/' .4 .4) '%() $. A.%4 $2) +#,$-./0 ,4( %4$)/,1$ .-$)4 +/.9%()
9,#") $. $2) "')/' .4 $2) .$2)/ '%()<Kb O.-$7,/) +#,$-./0 ()'%54)/' -/)F")4$#;+/.9%() '.-$7,/) ()9)#.+)/' 7%$2 '.-$7,/) ()9)#.+)/ 8%$' HON_'I ,4( .$2)/,''%'$,41) $. -,1%#%$,$) $2) )--%1%)4$ ()9)#.+0)4$ .- '.-$7,/) $2,$ 7./8' .4$2) +#,$-./0<Kd P4( "')/' :)4)-%$ -/.0 $2.') F",#%$; )42,41)0)4$' %4(%/)1$#;<
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
Kj< '-- S#)44 R2,+0,46 P3/C/G- .-%-+$>*+ Q-G+$8- 83 N--6 R$-D-A+ ;"68$#"8-% 6 >XG H!,/<jM6 KLMLI6 2$$+gll777<5..5#)<1.0l2.'$)(4)7'l,-+l,/$%1#)l>U)F!dA-S-__'%7:3[9ha.V:0he#Deei;7 H#%'$%45 ()'%54 -),$"/)' '"12 ,' +)/'.4,#%@)( 9%)7%45 /)1.00)4(,$%.4',4( 0.(%-%)( +#,;#%'$ $..#'I<
Kb< '-- !,/8 >/0'$/.456 ;396-8$8$3* $* CD3E'$%-% F"A=-8+ 6 j\ D>[N Z< PR^[< ffh6 ffhHKLLfIT D.12)$ n =%/.#)6 +/6A" 4.$) f6 ,$ fd`<
Kd< '--J -(>(6 '!N+ 1 C330+ S T"4-G33= !-#-036-A+ 6 X >RP?^^_ 6 2$$+gll()9)#.+)/'<-,1):..8<1.0l(.1'l'(8' H#,'$ 9%'%$)( X):< K\6 KLMKIT $H' !-# ;-*8-A S @660- !-#-036-A 6 >GGUP6 2$$+'gll()9)#.+)/<,++#)<1.0l()91)4$)/l%.'l%4()3<,1$%.4 H#,'$ 9%'%$)( X):< K\6 KLMKIT
F$4A3+3B8 '!N+ 6 !YRD^O^X=6 2$$+gll0'(4<0%1/.'.-$<1.0l)4&"'l((K``bLd H#,'$ 9%'%$)( X):<K\6 KLMKIT '!N+ "*% !3D*03"%+ 6 G >c G >U6 2$$+'gll10'<+,;+,#<1.0l"'l15%&:%4lp10(q $ /)4()/&1.4$)4$n1.4$)4$ $ YNq()9)#.+)/l#%:/,/; $ (.74#.,( $ '(8' H#,'$ 9%'%$)( X):< K\6 KLMKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 448/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"!# ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
/)')/9,$%.4' ,4( ,11)'' .$2)/ ,((%$%.4,# ')/9%1)' '"12 ,' /)9%)7'6 (%/)1$%.4'6,4( /)'$,"/,4$ '"55)'$%.4' -./ -/))<Kf ^+)4=,:#) +/)'"0,:#; ()1%()( $2,$ %4./()/ $. 1../(%4,$) $2) ()0,4(' .- /)'$,"/,4$' ,4( 1.4'"0)/' %$ 4))()( $..--)/ ')/9%1)' -/)) $. +,$/.4' $. ,$$/,1$ )4."52 1.4'"0)/' $. 0,8) $2)+#,$-./0 9,#",:#) $. /)'$,"/,4$'<
X%4,##;6 ,4( , 1)4$/,# '":A)1$ .- $2%' >/$%1#)6 +#,$-./0' 1,4 ()9)#.+ ,4()0+#.; 5.9)/4,41) ';'$)0' $2,$ /)5"#,$) $2) ,1$%.4' .- +,/$%1%+,4$'< =2)')';'$)0' 1,4 /)#; .4 %0+#%1%$ ./ )3+#%1%$ 1.4$/,1$'6 ()$)1$%.4 0)12,4%'0'6 ,4(+)4,#$%)'< S.9)/4,41) ';'$)0' -,1%#%$,$) 1../(%4,$%.4 ,4( 5)4)/,$) 9,#") -./"')/' :; +/)9)4$%45 '.0) "')/' -/.0 /)("1%45 ,4( +.''%:#; ()'$/.;%45 $2)
9,#") .- $2) +#,$-./0< ^+)4=,:#)6 -./ )3,0+#)6 1,4 +/)9)4$ +).+#) 72. 2,9)
, /)1./( .- 4.$ '2.7%45 "+ -./ /)'$,"/,4$ /)')/9,$%.4' -/.0 0,8%45 -"/$2)//)')/9,$%.4'< =2,$ %41/),')' $2) 9,#") .- $2) +#,$-./0 $. /)'$,"/,4$'< ?"$ %$,#'. %41/),')' $2) 9,#") .- $2) +#,$-./0 $. "')/' '%41)6 %- ^+)4=,:#) 7,' ,4"4/)#%,:#) '."/1) .- /)')/9,$%.4'6 /)'$,"/,4$' 0%52$ 4.$ "') %$6 ,4( , 9,#",:#)')/9%1) 0%52$ $2)/)-./) 4.$ :) ,9,%#,:#) $. 1.4'"0)/'<
#" W >UVP RDP>=Y^[ >[N Pa=PD[>UY=YPO
=2)') $..#' ,/) %0+./$,4$ -./ ,12%)9%45 $2) -"4(,0)4$,# )1.4.0%1+"/+.') .- , +#,$-./0g $. /)#),') 9,#") :; :/%45%45 "')/' $.5)$2)/< )?,;'"11))()( %4 (.%45 $2%' :; 1/),$%45 , 7):'%$) 72)/) ')##)/' 1."#( +.'$+/.("1$' -./ ',#)6 ()9)#.+%45 ,4 ,"1$%.4 0)12,4%'0 $2,$ ,##.7)( :";)/' $.:%( -./ $2.') +/.("1$'6 +/.9%(%45 , 1.49)4%)4$ +,;0)4$ 0)12,4%'0 $2,$)4,:#)( ')##)/' $. /)1)%9) -"4(' -/.0 :";)/'6 %0+#)0)4$%45 , /,$%45 ';'$)0$2,$ )4,:#)( :";)/' $. 1.00"4%1,$) %4-./0,$%.4 ,:."$ $2) ')##)/' $2); (),#$
7%$2 $. .$2)/ :";)/'6 ,4( ()9%'%45 /"#)' $. )4'"/) $2) %4$)5/%$; .- $2) :%((%45,4( ')##%45 +/.1)''< ^4) '$"(; .- )?,; -."4( $2,$ $2) :";)/' .:$,%4)(1.4'"0)/ '"/+#"' $2,$ ,9)/,5)( ,:."$ ob +)/ +"/12,') ,4( $.$,#)( 0./) $2,4o\ :%##%.4 %4 KLLj<K\ =2) ')##)/' ),/4)( '"/+#"' ,' 7)##6 )F",# $. $2) (%--)/)41):)$7))4 72,$ $2); 4)$$)( -/.0 :";)/' ,4( $2)%/ +)/'.4,# 9,#",$%.4' .- $2)5..('<Kh
G#,$-./0' /)#; .4 $2) $..#' ()'1/%:)( ,:.9) $. 0,3%0%@) $2) 9,#") $2);1/),$) -./ "')/' .9)/,## '":A)1$ $. 9,/%."' 1.4'$/,%4$'6 %41#"(%45 1.'$'< > 1./)12,##)45) %' )4,:#%45 "')/' $2,$ 1,4 )45,5) %4 0"$",##; :)4)-%1%,# )312,45)'
Kf< '-- X,/2,( !,4A..6 @+ H6-*C"G0- U339+J Q<3 L-8+ 8<- !3/><M 6 X >O= R^!G>[c H>+/<M6 KLMMI6 2$$+gll777<-,'$1.0+,4;<1.0l0,5,@%4)lMddl,'&.+)4$,:#)&:..0'&72.&5)$'&$2)&(."52<2$0#<
K\< '-- D,9% ?,+4,6 i.#-5,45 Z,48 n S,#%$ O20")#%6 ;3*+/9-A '/A60/+ $* H*0$*- @/48$3*+ 6M` Y[X^< O cO< D PO< bLL6 bLL HKLLhI<
Kh< 7% < ,$ bLd<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 449/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"!!
$. -%4( ),12 .$2)/< =2,$ %' +,/$#; ,((/)'')( $2/."52 +#,$-./0 ()'%54< ^4#%4)(,$%45 '%$)' '"12 ,' )],/0.4; /)#; .4 ()$,%#)( F")'$%.44,%/)' $. -%4( 0,$12)'-./ +).+#) ,4( $2)4 2,9) , +/.1)'' $2/."52 72%12 +).+#) 1,4 4,//.7 $2)%/'),/12)'<K`
=2) +#,$-./0 ,#'. 4))(' $. )4'"/) $2,$ $2)/) ,/) B2%52&F",#%$;E 0,$12)'%4 72%12 $2) "')/' 1,4 '+#%$ '%54%-%1,4$ 9,#")< X./ 0,4; 0"#$%&'%()( +#,$-./0'6$2) #%8)#%2..( .- 2%52&F",#%$; 0,$12)' %41/),')' 7%$2 $2) 4"0:)/ .-+,/$%1%+,4$'< =. ()9)#.+ $2%18)/ 0,/8)$'6 +#,$-./0' "') +/%1%45 ,4( .$2)/$..#' $. (/%9) +,/$%1%+,$%.4 ,4( +.'%$%9) -))(:,18 )--)1$'< O.0) '$.18)312,45)'6 -./ )3,0+#)6 +/.9%() '":'%(%)' $. +/.9%()/' .- #%F"%(%$;<jL !./)#%F"%(%$; +/.9%()/' ,$$/,1$ 0./) #%F"%(%$; $,8)/' $2,$6 %4 $"/46 (/%9) 0./)
#%F"%(%$; +/.9%()/'<%" W >UVP NYO=DY?V=Y^[ >[N R^^DNY[>=Y^[
>' $2)') )3,0+#)' %##"'$/,$)6 9,#") 1/),$%.4 %' %4$%0,$)#; 1.44)1$)( $. 9,#") (%'$/%:"$%.4< > +#,$-./0 2,' $. ')1"/) $2) +,/$%1%+,$%.4 .- ),12 '%() %4'"--%1%)4$ 4"0:)/' $. 5)4)/,$) 9,#")< =2,$ %49.#9)' '.#9%45 , 1../(%4,$%.4+/.:#)0< !)0:)/' .- ),12 5/."+ .- "')/' 7."#( :)4)-%$ -/.0 :)%45 .4 $2)+#,$-./0 :"$ $2); 7%## 4.$ A.%4 $2) +#,$-./0 "4#)'' )4."52 0)0:)/' .- $2).$2)/ 5/."+' A.%4 ,' 7)##<
=2) )1.4.0%1 #%$)/,$"/) .4 0"#$%&'%()( +#,$-./0' ()0.4'$/,$)' $2) /.#).- $2) +/%1%45 '$/"1$"/) ,4( .$2)/ '$/,$)5%1 ()1%'%.4' :; $2) +#,$-./0 %4'.#9%45 $2%' 1../(%4,$%.4 +/.:#)0<jM ?; $%#$%45 $2) +/%1%45 '$/"1$"/) '. $2,$.4) '%() 1.4$/%:"$)' /)#,$%9)#; 0./) %41/)0)4$,# 0,/5%4 ,4( $2) .$2)/ '%()1.4$/%:"$)' /)#,$%9)#; #)'' %41/)0)4$,# 0,/5%46 $2) +#,$-./0 1,4 +.$)4$%,##;)4$%1) )4."52 0)0:)/' .- ),12 5/."+ $. A.%4<jK ^41) $2); (.6 +.'%$%9)-))(:,18 )--)1$' 1,4 -")# 5/.7$2<
=2)') )1.4.0%1 0.()#' -.1"'6 -./ '%0+#%1%$;6 .4 $2) +/%1)' $2,$ ,5)4$',/) 12,/5)(<jj !./) 5)4)/,##;6 2.7)9)/6 +#,$-./0' +/.9%() 4)$ 9,#") $.0)0:)/' .- ),12 5/."+ 72)/) $2,$ 4)$ 9,#") %' $2) (%--)/)41) :)$7))4 $2)
K`< '-- -V"A93*: F-9G-A+<$6 H68$3*+ 6 P] >D!^[c 6 2$$+gll777<)2,/0.4;<1.0l'%45#)'l')/9#)$l,:."$l0)0:)/'2%+ H#,'$ 9%'%$)( X):< KK6 KLMKI<
jL< '-- [cOP P"/.4)3$6 >44",# D)+./$ HX./0 ML&_I6 ,$ KK HX):< Kh6 KLMMI6 "#"$0"G0- "8 2$$+gll777<')1<5.9l>/12%9)'l)(5,/l(,$,lMjfhLL\lLLLL`dLMKjMMLM`hK\l;hfK\d)ML98<2$0<
jM< '-- N,4%)# X< O+"#:)/6 '30#$*> 8<- ;$A4/0"A ;3*/*%A/9? ;399/*$4"8$3* "*% ;33A%$*"8$3* $*7*8-A*-8 F"A=-8+ 6 MLb [ i < V< U< D PW < dj\6 djhmj` HKLMLIT R,%##,"( n Z"##%)46 +/6A" 4.$) b6 ,$jKK<
jK< '-- i%#8. ?.#$ n >#)3,4()/ X< =%)0,46 V-"#$0: '=-D-% 2A$4$*> $* CD3E'$%-% F"A=-8+ 6
Kf Y[=CU Z< Y[NVO< ^DS< MKdL6 MKdLmdM HKLLhIT D.12)$ n =%/.#)6 +/6A" 4.$) f6 ,$ fd`T !,/1D;'0,46 C<- )43*39$4+ 3B CD3E'$%-% F"A=-8+ 6 Kj Z< ^X PR^[< GPDOG< MKd6 MjL HKLL`I<
jj< '-- D;'0,46 +/6A" 4.$) jK6 ,$ MK`<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 450/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"!" ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
$.$,# 9,#") /)1)%9)( ,4( $2) $.$,# 1.'$ %41"//)( :; $2,$ 0)0:)/< G#,$-./0''.#9) $2) 1../(%4,$%.4 +/.:#)0 $2/."52 ,(A"'$%45 72,$ "')/' /)1)%9)jb ,' 7)##,' 2.7 0"12 $2); +,;< >++#) +/.9%()' 0,4; -),$"/)' .4 %$' +2.4)' $2,$"')/' -%4( ,$$/,1$%9)< Y$ ,#'. +/.9%()' '.-$7,/) ()9)#.+)/' 7%$2 ,4 .+)/,$%45';'$)06 $..#'6 ,4( , '$./) -./ ')##%45 ,++#%1,$%.4' $2,$ ()9)#.+)/' -%4(,++),#%45<jd
Y4 ()$)/0%4%45 $2) /)#,$%9) :)4)-%$' /),#%@)( :; ),12 5/."+ .- ,5)4$'6 $2)+#,$-./0 4)1)'',/%#; 0,8)' ()1%'%.4' $2,$ ,##.1,$) :)4)-%$' :)$7))4 (%--)/)4$5/."+' .- "')/'< >## )#') )F",#6 12,/5%45 .4) 5/."+ #)'' 0),4' 12,/5%45,4.$2)/ 5/."+ 0./)< =2) +.%4$ )3$)4(' :);.4( +/%1%45< G#,$-./0' 0,8)()'%54 ,4( .$2)/ ()1%'%.4' $2,$ '2%-$ $2) /)#,$%9) :)4)-%$' :)$7))4 $2) $7.
'%()'< O2.++%45 0,##'6 -./ )3,0+#)6 '.0)$%0)' +#,1) ,412./ '$./)' $2,$,$$/,1$ $2) 0.'$ '2.++)/' ,' -,/ ,+,/$ ,' +.''%:#)6 +"$ "+ ,4( (.74 )'1,#,$./'-,/ ,+,/$6 ,4( 0,8) .$2)/ +2;'%1,# ()'%54 ()1%'%.4' $. %41/),') $2) -..$ $/,--%1%4 -/.4$ .- '$./)'<jf !,##' $2)/)-./) 1.49); ,4 ,(()( :)4)-%$ .4 $2) '$./)'
72. +,; -./ '+,1)6 72%#) %0+.'%45 '.0) 1.'$' .4 '2.++)/' 72. 5)$ %4 -./-/))<j\ =2) '$/%45)41; .- $2) 5.9)/4,41) ';'$)0 -./ (%--)/)4$ $;+)' .- "')/'6%41#"(%45 $2) +)4,#$%)' %0+.')(6 ()$)/0%4)'6 %4 +,/$6 $2) (%'$/%:"$%.4 .- 9,#")<
===I
,(0 ,&>('=1< ()0 93(2A1<: C1::@)=2=&*
> 4)5,$%9) )3$)/4,#%$; ,/%')' 72)4 )1.4.0%1 ,5)4$ > %0+.')' 1.'$' .4)1.4.0%1 ,5)4$ ? $2,$ ,5)4$ ? 2,' 4)%$2)/ ,5/))( $. :),/ 4./ 2,' /)1)%9)(1.0+)4',$%.4 -./<jh =2)') 1.'$' ,/%') %4 0,4; 7,;' ,4( %41#"() 0,4; -./0'.- :)2,9%./ $2,$ /,45) -/.0 $2) '))0%45#; %44.1"."' $. $2) .:9%."'#;
)5/)5%."'6 ,' $2) -.##.7%45 )3,0+#)' %##"'$/,$)<
>$ '.0) +.%4$ 72)4 ;." )4$)/ , 2%527,; ;." %41/),') 1.45)'$%.4,4( %0+.') 1.'$' .4 ,## .$2)/ (/%9)/'<
> -%'2)/0,4 %41/),')' $2) # %8)#%2..( $2,$ $2) -%'2%45 5/."4(' 7%##
:) ()+#)$)( ,4( $2)/)-./) %0+.')' 1.'$' .4 .$2)/ -%'2)/0)4<
> -,1$./; )0%$' '0.8) $2,$ %0+.')' 1.'$' .4 0,4; +).+#) 72.#%9) %4 $2) '"//."4(%45 ,/),<
jb< =2,$ %'6 $2) +#,$-./0 0,; ()1%() $. '2%-$ $2) ()0,4( '12)("#) -./ , 5/."+ .- "')/'$. $2) /%52$ ./ $2) #)-$ :; +/.9%(%45 0./) ./ -)7)/ +/.("1$ ,$$/%:"$)' $2,$ $2)') "')/' 9,#")<
jd< '-- $H' !-# ;-*8-A S @660- !-#-036-A 6 +/6A" 4.$) Kd<jf< '-- !,#1.#0 S#,(7)##6 C<- C-AA"II3 W/*>0- 6 =]P [Pi c ̂ D_PD 6 !,/< Md6 KLLb6 ,$
MKKmKb<j\< X./ , 5)4)/,# ,4,#;'%' .- '$/,$)5%)' %4 72%12 +#,$-./0' %41/),') 1.4'"0)/ '),/12
1.'$'6 +-- >4(/)% ],5%" n ?/"4. Z"##%)46 Q<: %3 7*8-A9-%$"A$-+ !$#-A8 '-"A4<M 6 bK D >[N< Z< PR^[< jj\ HKLMMI<
jh< '-- !,48%7 +/6A" 4.$) j6 ,$ KLjmL\<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 451/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"!7
>4 %49)'$0)4$ 0,4,5)/ )45,5)' %4 , G.4@% '12)0) $2,$ 7%##"#$%0,$)#; 1.##,+') ,4( 2,/0 $2) #,$)/ %49)'$./'<
> #.1,# 5,45 ,$$,18' %$' /%9,#'<
=2) +)/+)$/,$./ (.)' 4.$ :),/ ,4; 1.'$' -./ %0+.'%45 $2) )3$)/4,#%$; ,4(%4())( 0,; :)4)-%$ -/.0 %$< Y4 $2) ,:')41) .- #,7' ,4( /)5"#,$%.4'6 ,5)4$'%0+.') 2%52 1.'$' .4 '.1%)$;< >' %' 7)## 84.746 #)-$ "412)18)( 4)5,$%9))3$)/4,#%$%)' /)("1) 1.4'"0)/ 7)#-,/)< X./ $2) )3,0+#)' ,:.9)6 /"#)' $2,$0%4%0%@) 4)5,$%9) )3$)/4,#%$%)' %41#"()g
=.## :..$2' ./ 1.45)'$%.4 12,/5)' $2,$ /)("1) $2) %41)4$%9)' $.(/%9)<
G.##"$%.4 $,3)' ./ $/,(,:#) )0%''%.4 +)/0%''%.4 $,3)' $2,$ #%0%$
+.##"$%.4<
X%'2%45 #%0%$'6 %41#"(%45 +)4,#$%)' -./ )31))(%45 .4)C' F".$,<
G/%'.4 ')4$)41)' ,4( -%4)' -./ )45,5%45 %4 %49)'$0)4$ -/,"(<
["0)/."' 1/%0%4,# +)4,#$%)' -./ 5,45 9%.#)41)<
!,4; .- $2) /"#)'6 :.$2 1%9%# ,4( 1/%0%4,#6 $2,$ 1.00"4%$%)' ,(.+$ 1,4 :) 9%)7)( ,' '.#"$%.4' $. 4)5,$%9) )3$)/4,#%$%)'< G.#%$%)' :,4 0,4; './$' .-:)2,9%./ .4 $2) 5/."4(' $2,$ $2); 7./')4 #%-) %4 $2) 1.00"4%$;< R2,45%45'.1%,# 4./0' ,#$)/ $2) 1.'$' ,4( :)4)-%$'6 ,4( -./0,# '.1%)$,# /"#)' )9.#9) ,' ,/)'"#$ H-./ %4'$,41)6 /"#)' ()-%4%45 $2) :."4(,/%)' .- "4#,7-"# +./4.5/,+2;I<
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
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 452/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"!L ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
!" Y = ^VS]= =^ ?P > RDY!P
G#,$-./0 "')/' 0,; )45,5) %4 9,/%."' -./0' .- :)2,9%./ $2,$ 2,9) 4./)())0%45 9%/$")' ,4( $2,$ ,/) ,4,#.5."' $. +/,1$%1)' $2,$ ,/) 1/%0%4,#
9%.#,$%.4' %4 +.#%$%)'<j`
G#,$-./0 "')/' 0,; )45,5) %4 0;/%,( $;+)' .- -/,"( ,4(0%'/)+/)')4$,$%.4< X/,"( 0,; .11"/ 72)4 0)/12,4$' ')## 1."4$)/-)%$ 5..('bL ./ ,11)+$ +,;0)4$ :"$ $2)4 (. 4.$ '2%+ $2) 5..('< bM ?/.8)/' .4 )312,45)+#,$-./0' 1."#( )45,5) %4 -/.4$&/"44%45s$2,$ %'6 +/.-%$%45 -/.0 %4-./0,$%.4.4 $/,()' +#,1)( :; 1#%)4$' +.''%:#; $. $2) ()$/%0)4$ .- $2) 1#%)4$< X%/0' 1,4)41."/,5) $2)%/ )0+#.;))' $. 1#%18 .4 , 1.0+)$%$./C' ,(' .4 '),/12 )45%4)'$. %0+.') 1.'$' .4 $2)0<bK !%'/)+/)')4$,$%.4 0,; ,#'. .11"/ 72)4 +).+#) #%)
,:."$ $2)%/ ,5) ./ $2)%/ 7)%52$ .4 (,$%45 '%$)'6 bj $2) $/") 4,$"/) .- ,'0,/$+2.4) ,++#%1,$%.46bb ./ $2) +.+"#,/%$; /,48%45 .- $2)%/ 7):'%$)'<bd =2%'#%'$ (.)' 4.$ )32,"'$ $2) 7,;' %4 72%12 .++./$"4%'$%1 :)2,9%./ 1,4 .11"/ .4+#,$-./0'<
G.#%$%)' 2,9) /"#)' $. +/)9)4$ +).+#) -/.0 ,'',"#$%45 .$2)/ +).+#)6)45,5%45 %4 :.(%#; 2,/06 1.00%$$%45 #%:)#6 ,4( 1,"'%45 0)4$,# (%'$/)''< =2)')%''")' 1,4 ,/%') .4 0"#$%&'%()( +#,$-./0' ,' 7)##< Y4$)/,1$%.4' %4 4%52$1#":',4( .$2)/ +2;'%1,# ,4( 9%/$",# (,$%45 9)4")' 1,4 /)'"#$ %4 :.(%#; 2,/0<R/,%5'#%'$6 -./ )3,0+#)6 2,' :))4 "')( :; ')3",# +/)(,$./' $. 0))$6 ,4( %4'.0) 1,')' 8%## ./ /,+)6 9%1$%0'<bf O.1%,# 4)$7./8' 1,4 :) "')( -./ %4-#%1$%45
j`< '-- D%12,/( >< G.'4)/6 @* )43*39$4 C<-3A: 3B 8<- ;A$9$*"0 O"D 6 hd R^UV!< U< D PW <MM`j6 MM`dm`\ HM`hdI H-/,0%45 1/%0)' ,' 0,/8)$ :;+,'')' 1/),$%45 4)$ (%'"$%#%$;I<
bL< '-- D.: V4'7./$26 @9"I3* F"A=-860"4- HBB-A$*> !"*>-A3/+ L33%+ 6 ??R HN)1< h6 KLLhI62$$+gll777<::1<1.<"8l:#.5'l7,$12(.5lKLLhlMKl,0,@.4 $ 0,/8)$+#,1) $ .--)/%45 $ (,<2$0#<
bM< '-- @9"I3* F"A=-860"4- "*% )G": TA"/% 6 >[NDP SV[=]PD G]^=^SD>G]c 62$$+gll777<,5"4$2)/+2.$.5/,+2;<1.0l:#.5l,0,@.4&0,/8)$+#,1)&):,;&-/,"(<2$0# H#,'$ 9%'%$)( >"5< Kj6 KLMMI<
bK< '-- N,4 O2%+)6 7+ @%Q3A%+ ;0$4= F"*$6/0"8$3* C"=$*> F3*-: TA39 P3/A 234=-8M 6 >D=YRUPl<R^! H>"5< K`6 KLLhI6 2$$+gll777<,/$%1#)'#,'2<4)$lY4$)/4)$&,4(&?"'%4)'')'&^4#%4)lGGR&>(9)/$%'%45lb\dfjbrrY'&>(i./('&R#%18&!,4%+"#,$%.4&=,8%45&!.4);&X/.0& c."/&G.18)$<2$0#<
bj< '-- 700/+$3* 3A !-4-68$3*MM Q<: %3 +39- 6-360- 9$+A-6A-+-*8 8<-9+-0#-+ 3* %"8$*> +$8-+M 6P] >D!^[c >NWYRP s!P!?PD NYORVOOY^[ X^DV!6 2$$+gll,(9%1)<)2,/0.4;<1.0l:.,/('l(,$%45&,(9%1)l(,$%45ldLhbb&%##"'%.4&()1)+$%.4&72;&(.&'.0)&+).+#)&0%'/)+/)')4$&$2)0')#9)'&(,$%45&'%$)'&j<2$0# H#,'$ 9%'%$)( >"5< M6 KLMMI<
bb< '-- R#,"(%4) ?),"0.4$6 L33>0- A-938-0: %-0-8-+ @*%A3$% "66+ 6 =]P =PUPSD>G] HZ"4<Kd6 KLMLI6 2$$+gll777<$)#)5/,+2<1.<"8l$)124.#.5;l5..5#)l\hdbdfLlS..5#)&/)0.$)#;&()#)$)'&>4(/.%(&,++'<2$0#<
bd< '-- =.0 P'+%4)/6 L33>0- G0"4=0$+8+ UFQ(%- 6 R[P= [PiO HX):< f6 KLLfI6
2$$+gll4)7'<14)$<1.0lS..5#)&:#,18#%'$'&?!i<()lKMLL&MLKbrj&fLjdbMK<2$0#<bf< '-- >::; S..(4."526 F-%$4"0 '8/%-*8 7+ 7*%$48-% $* ;A"$>+0$+8 N$00$*> 6 [<c< =Y!PO6 Z"4)
KM6 KLL`6 ,$ >Mj6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLL`lLflKKl"'lKK%4(%1$<2$0#<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 453/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"!%
)0.$%.4,# (%'$/)''<b\ > 2%52#; +":#%1%@)( 1,') %49.#9)( $2) "') .- , '.1%,#4)$7./8 :; U./% N/)7 $. /)$,#%,$) ,5,%4'$ , ;."45 5%/#6 !)5,4 !)%)/6 72.2,( , (%',5/))0)4$ 7%$2 N/)7C' (,"52$)/<bh V'%45 , -,8) ,11."4$ "4()/
72%12 N/)7 ,''"0)( $2) -,#') +)/'.4, .- , $))4,5) :.;6 N/)7 ./12)'$/,$)(,4 .4#%4) /.0,41) 7%$2 !)%)/6 2,( $2) -,8) :.; :)1.0) 2.'$%#)6 ,4()9)4$",##; '"55)'$)( $2,$ !)%)/ 8%## 2)/')#-< O..4 ,-$)/6 !)%)/ 1.00%$$)('"%1%()<b`
Y4$)/,1$%.4' .4 0"#$%&'%()( +#,$-./0' 1,4 %49.#9) :)2,9%./ $2,$ '.0)"')/' -%4( .--)4'%9)< =2%' %' 4. (%--)/)4$ $2,4 , /)5"#,/ 1.00"4%$;< G).+#)0,; %41"/ 1.'$' ,' , /)'"#$ .- "47,4$)( )3+.'"/) $. 2,$) '+))126+./4.5/,+2;6 9%.#)4$ %0,5)'6 ,4( .$2)/ .--)4'%9) 1.4$)4$< P9)4 %- $2); ,/)
4.$ )3+.')( $. $2%' 1.4$)4$6 $2); 0,; (%'#%8) :)%45 +,/$ .- , 1.00"4%$; %4 72%12 '"12 :)2,9%./ $,8)' +#,1)<
#" G^^D >[N >Oc!!P=DYR Y[X^D!>=Y^[
> '$,4(,/( +/.:#)0 %4 $2) )312,45) .- 9,#") %' $2,$ .4) +,/$; 2,'%4-./0,$%.4 $2,$ $2) .$2)/ +,/$; (.)' 4.$ 2,9)< U,18 .- %4-./0,$%.4 %0+.')'1.'$' .4 ,1$",# ,4( +.$)4$%,# $/,(%45 +,/$4)/'< Y4 $2) )3$/)0) $2%' 1,4 #),( $.0,/8)$ :/),8(.74' ,' , /)'"#$ .- $2) B#)0.4' +/.:#)0<EdL =2) 1.##,+') .-$2) 9%().5,0) 0,/8)$ %4 $2) V4%$)( O$,$)' %4 M`hj 2,' :))4 ,$$/%:"$)( $. ,#)0.4' +/.:#)0< R.4'"0)/' 1."#( 4.$ (%'$%45"%'2 #.7 F",#%$; -/.0 2%52F",#%$; 5,0)' :)-./) :";%45 $2)0< G/.("1)/' $2)/)-./) 2,( %41)4$%9)' $.1/),$) 12),+)/ #.7 F",#%$; 5,0)' $2,$ (/.9) $2) 2%52 F",#%$; 5,0)' ."$ .- $2)0,/8)$< ?"$ 1.4'"0)/' (%( 4.$ 7,4$ $. :"; 9%(). 5,0) 1.4'.#)' $. /"4 #.7F",#%$; 5,0)'<dM
!./) 5)4)/,##;6 ,';00)$/%1 %4-./0,$%.4 /)("1)' 0,/8)$ )--%1%)41; :;/)("1%45 $2) #%8)#%2..( $2,$ "')/' 7%## -%4( $2) 0,$12)' $2,$ 0,3%0%@) $2)
b\< '--J -(>(6 c,41; 9< V<O< >%/7,;'6 Y41<6 [.< R%9< >< ML&`hj6 KLMM iU K`bd\dh HP<N<U,< Z"#; KL6 KLMMI H)0:,//,''%45 +%1$"/)' .- )0+#.;)) 7)/) +.'$)( .4 X,1):..8IT !,/)0.4$ 9< O"',4 X/)(0,4 N)'%54 S/."+6 U$(<6 [.< ML R \hMM6 KLMM iU fMLM`b` H[<N< Y##< N)1< \6KLMMI H)0+#.;)/ "')( )0+#.;))C' +)/'.4,# =7%$$)/ ,4( X,1):..8 ,11."4$' $. ,(9)/$%') 72%#))0+#.;)) 7,' %4 $2) 2.'+%$,#I<
bh< V4%$)( O$,$)'< 9< U./% N/)76 Kd` X<D<N< bb` HR<N< R,#< KLL`I<b`< '-- F39? F:'6"4- V3"K O-% 83 !"/><8-AX+ '/$4$%- 6 >OO^RY>=PN GDPOO H[.9< Mf6 KLL\I6
2$$+gll777<-.34)7'<1.0l'$./;lL6K`jj6jMKLMh6LL<2$0#<dL< '-- S)./5) >< >8)/#.-6 C<- F"A=-8 B3A YO-93*+Z? [/"0$8: 5*4-A8"$*8: "*% 8<- F"A=-8
F-4<"*$+9 6 hb k< Z< ^X PR^[< bhh HM`\LI H.74)/' .- 1,/' $2,$ ,/) B#)0.4'E ,/) 0./) #%8)#; $.')## $2)0T '%41) 1.4'"0)/' 1,44.$ (%'$%45"%'2 #)0.4' -/.0 5..( 1,/'6 $2) ',#) +/%1)' .-5..( 1,/' ,/) ()+/)'')(T $2,$ #),(' .74)/' .- 5..( 1,/' 4.$ $. ')##T $2) 0,/8)$ -./ /)')##%45F",#%$; 1,/' %' $2)/)-./) ()'$/.;)(I<
dM< '-- N >WYN O< P W>[O6 >[NDPY ] >SYV n D YR]>DN OR]!>UP[OPP6 Y[WYOY?UP
P[SY[POg ]^i O^X=i>DP GU>=X^D!O NDYWP Y[[^W>=Y^[ >[N =D>[OX^D! Y[NVO=DYPO
MKbmKd HKLLfI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 454/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"!- ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
$.$,# 9,#") -/.0 $/,()< O)9)/,# '$"(%)' 2,9) -."4( $2,$ /)F"%/%45 1./+./,$):.4( $/,()/' $. (%'1#.') %4-./0,$%.4 .4 $/,(%45 +/%1)' /)'"#$)( %4 %0+/.9)()--%1%)41; ,4( '":'$,4$%,##; #.7)/ $/,(%45 1.'$'<dK
^++./$"4%'$%1 :)2,9%./ /)'"#$%45 -/.0 ,';00)$/%1 %4-./0,$%.4 0,;%41/),') $2) "41)/$,%4$; -./ +).+#) ,4( 1.0+,4%)' $2,$ ,/) 1.4'%()/%45 "'%45, +#,$-./0< =/,()/' 0,; +/)-)/ +#,$-./0' $2,$ 2,9) $/,4'+,/)4$ +/%1%45 ,4('.1%,# 4)$7./8 "')/' 0,; +/)-)/ +#,$-./0' 72)/) %4-./0,$%.4 ,:."$ +).+#) %'/)#%,:#)<
%" R^[SPO=Y^[ >[N ^G=Y!YeY[S G]cOYR>U OG>RPO
[)5,$%9) )3$)/4,#%$%)' 1,4 /)'"#$ -/.0 %41/),'%45 $2) 4"0:)/ .- "')/' -./
0"#$%&'%()( +#,$-./0'< G2;'%1,# +#,$-./0' -,1) 1.45)'$%.4 +/.:#)0'< >4%52$1#": +/.9%()' , $/%9%,# )3,0+#)< =.. 0,4; +).+#) 7%## 0,8) %$ 2,/()/ -./+).+#) $. 0%45#) ,4( )4A.; $2)0')#9)'< > '2.++%45 0,## +/.9%()' , 0./)%4$)/)'$%45 )3,0+#)< >4 %41/),') %4 $2) 4"0:)/ .- 0)/12,4$' 0,; %41/),')'),/12 1.'$' ,4( $2)/)-./) 2,/0 .$2)/ ')##)/' ,' 7)## ,' :";)/'<
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dj
&"
R >OP Y[ G^Y[=g NPR^D ! c P cPO W%$,#; ?./8)/C' '$/,$)5%)' -./ ')##%45 );)7),/ .4 $2) 7): 2%52#%52$ ,#0.'$
,## $2)') -./0' .- :,( :)2,9%./T $2); ,#'. +/.9%() , #)''.4 %4 72,$ 2,++)4'
dK< =2)') '$"(%)' 1.41)/4 $2) %4$/.("1$%.4 .- $2) =D>RP H=/,() D)+./$%45 ,4(R.0+#%,41) P45%4)I ';'$)0 -./ 1./+./,$) :.4(' %4 $2) V4%$)( O$,$)'< '-- ])4(/%8?)'')0:%4()/6 i%##%,0 !,37)## n _"0,/ W)48,$,/,0,46 F"A=-8 CA"*+6"A-*4:J O$\/$%$8: )K8-A*"0$8$-+J "*% 7*+8$8/8$3*"0 CA"%$*> ;3+8+ $* ;3A63A"8- U3*%+ 6 hK Z< ^X XY[< PR^[< KdM HKLLfIT >0; P(7,/('6 U,7/)41) ],//%' n !%12,)# G%7.7,/6 ;3A63A"8- U3*% F"A=-8 CA"*+"48$3* ;3+8+"*% CA"*+6"A-*4: 6 fK Z< ^X XY[< MbKM HZ"4) KLL\IT !%12,)# S.#('$)%46 P(%$2 ].$128%'' n P/%8O%//%6 CA"*+6"A-*4: "*% O$\/$%$8:? @ ;3*8A300-% )K6-A$9-*8 3* ;3A63A"8- U3*%+ 6 KL D PW < ^X XY[< O =VN< Kjd HKLL\I< X./ , '"00,/;6 ')) ])4(/%8 ?)'')0:%4()/ n i%##%,0 X< !,37)##6CA"*+6"A-*4: "*% 8<- ;3A63A"8- U3*% F"A=-8 6 KK Z< ^X PR^[< GPDOG< KM\ HKLLhI<
dj< P;)&$/,18%45 '$"(%)' .- 2.7 1.4'"0)/' "') '),/12 )45%4)' /)9),# $2,$ :.$2 $2)F",#%$; .- $2) 1.4'"0)/ )3+)/%)41) ,4( $2) ,$$)4$%.4 +,%( $. ,(9)/$%'%45 9,/%)' '":'$,4$%,##;
7%$2 $2) #,;."$ ,4( ./5,4%@,$%.4 .- $2) '),/12 /)'"#$' +,5)< '--J -(>(6 R,$,#;'$S/."+6 L33>0- #+(U$*>? '-"A4< )*>$*- 2A-B-A-*4- 6 Z"4) KLL`6 "#"$0"G0- "8 2$$+gll777<1,$,#;'$4;1<1.0l1.-,1$./'l 7+&1.4$)4$l"+#.,('lKLL`lLfl1,$,#;'$&);)&$/,18%45&:%45&9'&5..5#)&0,;&KLL`<+(-<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 455/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"!J
72)4 +#,$-./0 5.9)/4,41) %' %0+)/-)1$< ?./8)/ #),/4)( $2,$ '),/12 )45%4)'(%( 4.$ (%'$%45"%'2 :)$7))4 5..( ,4( :,( 1%$)' $. 2%' 7):'%$)< db ])/)'+.4()( $. 1.0+#,%4$' 7%$2 2%52#; .--)4'%9) )0,%#' ,4( +.'$' $2,$5)4)/,$)( )9)4 0./) 1.0+#,%4$'<dd ]) $.#( , [)7 c./8 =%0)' /)+./$)/6 BYC9))3+#.%$)( $2%' .++./$"4%$; :)1,"') %$ 7./8'< [. 0,$$)/ 72)/) $2); +.'$ $2)%/4)5,$%9) 1.00)4$'6 %$ 2)#+' 0; /)$"/4 .4 %49)'$0)4$< O. Y ()1%()(6 72; 4.$"') $2,$ 4)5,$%9%$; $. 0; ,(9,4$,5)pEdf
?./8)/6 72. "')( $2) ,#%,')' =.4; D"''. ,4( O$,4#); ?.#('6 /)1)%9)(0,4; 1.0+#,%4$' :)1,"') 2) )45,5)( %4 -/,"("#)4$ :)2,9%./6 %41#"(%45,((%45 '+"/%."' 12,/5)' $. 1"'$.0)/'C +,;0)4$ 1,/('<d\ i2)4 +).+#)+"/'")( $2)%/ 1.0+#,%4$' ,5,%4'$ 2%06 ?./8)/s'.0)$%0)' "'%45 .4) .- 2%'
,#%,')'s$2/),$)4)( $2)0 7%$2 :.(%#; 2,/0 %41#"(%45 (),$2 ./ /,+)<dh
])$2/),$)4)( .4) 1"'$.0)/ 7%$2 ')3",# 9%.#)41) 72)4 '2) ',%( '2) 7,' 5.%45 $.2,9) 2)/ 1/)(%$ 1,/( %''")/ /)9)/') ,4 .9)/12,/5)<d` ?./8)/ #,$)/ ')4$ $2)1"'$.0)/ +%1$"/)' .- $2) ."$'%() .- 2)/ ,+,/$0)4$ :"%#(%45 %4 , -"/$2)/,$$)0+$ $. %4$%0%(,$) 2)/<fL
?./8)/ /)#%)( 2),9%#; .4 $7. 7): +#,$-./0' -./ $2)') +/,1$%1)'< ])-"#-%##)( 2%' ./()/' -/.0 ')##)/' .4 )?,; 72. 7)/) (%/)1$)( $. '2%+ $. 2%'1"'$.0)/'<fM ]) ,#'. "')( '),/12 )45%4) /,48%45' $. (/%9) :"'%4)''< fK Y4%$%,##;6$2) 5.9)/4,41) ';'$)0' .- $2)') +#,$-./0' -,%#)( $. $27,/$ 2%0< Y4 $2) 1,').- '),/12 /)'"#$'6 2) 2,( (%'1.9)/)( , 7,; $. 0,4%+"#,$) $2) '),/12 ,#5./%$20,' 7)## ,' $2) ()$)1$%.4 0)$2.(' $2)4 %4 +#,1) -./ %()4$%-;%45 )--./$' $.(%'$./$ /)'"#$'<fj >-$)/ $2) '$./; 7,' /)+./$)(6 S..5#) ()9)#.+)( ,4 ,#5./%$20$. ()$)1$ )--./$' $. %41/),') '),/12 /,48%45' :; )41."/,5%45 :,( 1.00)4$'<fb
db< '-- N,9%( O)5,#6 @ U/00: T$*%+ " 2/06$8 3* 8<- Q-G 6 [<c< =Y!PO6 [.9< Kh6 KLML6"#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLMLlMMlKhl:"'%4)''lKh:./8)/<2$0#<
dd< 7% <df< 7% <d\< '-- $% <dh< '-- YL33>0- <$89"*Z? ):->0"++-+ +-00-A Y8<A-"8-*-% 4/+839-A+ D$8< A"6- "*% 9/A%-A 83
-0-#"8- <$+ D-G+$8- 3* +-"A4< -*>$*-+JZ N >YUc ! >YU6 !,; Md6 KLMM6 "#"$0"G0- "82$$+gll777<(,%#;0,%#<1.<"8l4)7'l,/$%1#)&Mjh\jMLlS..5#)&2%$0,4&W%$,#;&?./8)/&$2/),$)4)(&1"'$.0)/'&/,+)&0"/()/<2$0#<
d`< '-- O)5,#6 +/6A" 4.$) db<fL< 7% <fM< '-- $% <fK< '-- $% <fj< 7% <
fb< >#;'.4 O2.4$)##6 F"=$*> ;/+839-A+ V"8- P3/ F"=-+ L33>0- O3#- P3/ 6 ?VO< Y[OYNPD 6N)1< j6 KLML6 2$$+gll777<:"'%4)''%4'%()/<1.0l0,8%45&1"'$.0)/'&2,$)&;."&0,8)'&5..5#)&#.9)&;."&KLML&MK<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 456/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"!8 ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
!),472%#)6 +":#%1 #,7 $..8 1,/) .- ?./8)/6 72. +#)( 5"%#$; $. 7%/) -/,"(60,%# -/,"(6 ,4( ')4(%45 $2/),$)4%45 1.00"4%1,$%.4'<fd
'" ? >N ?P]>WY^D >[N GU>=X^D! W >UVP
!,4; -./0' .- :,( :)2,9%./6 '"12 ,' -/,"( ,4( 0%'/)+/)')4$,$%.46 1#),/#;/)("1) $2) 9,#") .- $2) +#,$-./0< U%8) 0,4; -./0' .- 1/%0%4,# :)2,9%./6 $2%':)2,9%./ 2,' 4. /)())0%45 9%/$")'< ].7)9)/6 '.0) :)2,9%./ $2,$ %0+.')'1.'$' .4 .$2)/ +,/$%1%+,4$' %4 $2) +#,$-./0 ,4( $2)/)-./) '))0' B:,(E ,#'.+/.9%()' :)4)-%$'< i2)4 $2)') :)4)-%$' ."$7)%52 $2) 1.'$'6 $2) :)2,9%./ (.)'4.$ 5)4)/,$) 4)5,$%9) )3$)/4,#%$%)'6 .4 4)$6 ,4( $2)/)-./) %' 4.$ :)2,9%./ $2,$$2) +#,$-./0 7."#( 4)1)'',/%#; 7,4$ $. (%'1."/,5)<
=2,$ 1."#( :) $2) 1,')6 -./ )3,0+#)6 7%$2 ,';00)$/%1 %4-./0,$%.4 %4'.0) 1,')'< V')/' 0,; 4))( %41)4$%9)' $. %49)'$ %4 ,1F"%/%45 %4-./0,$%.46,4( $2) ,:%#%$; $. 1,+%$,#%@) .4 $2)%/ 1.4$/.# .9)/ $2,$ %4-./0,$%.4 0,;+/.9%() $2.') %41)4$%9)'< =2) :)4)-%$' -/.0 %41/),')( (;4,0%1 )--%1%)41;-/.0 %49)'$0)4$ %4 5,$2)/%45 %4-./0,$%.4 0,; ."$7)%52 $2) #.'')' -/.0#.7)/ '$,$%1 )--%1%)41; ,' , /)'"#$ .- 4.$ '2,/%45 $2,$ %4-./0,$%.4<ff S/),$)/$/,4'+,/)41; .4 '.1%,# 4)$7./8' 2,' %$' 1.'$' $..< Y4-./0,$%.4 $2,$ %41/),')'$2) 9,#") .- .4) /)#,$%.4'2%+ 0,; ()1/),') $2) 9,#") .- ,4.$2)/ /)#,$%.4'2%+<f\
='I
0&(3=); +=2> ,(0 ,&>('=1<
!"#$%&'%()( :"'%4)'')' 1."#( '%0+#; /)#; .4 1%9%# ,4( 1/%0%4,# #,7 ,4(5.9)/40)4$ /)5"#,$%.4 $. (),# 7%$2 $2) 4)5,$%9) )3$)/4,#%$%)' $2,$ ,/%') .4$2)%/ +#,$-./0'< V')/' 2,9) /)1."/') $. #,7' %49.#9%45 :/),12 .- 1.4$/,1$6
-/,"(6 0,/8)$ 0,4%+"#,$%.46 ,'',"#$ ,4( :,$$)/;6 ,4( %4$)4$%.4,# %4-#%1$%.4 .-)0.$%.4,# (%'$/)'' $. (),# 7%$2 0,4; .- $2) +/.:#)0' (%'1"'')( ,:.9)<fh U,7' ,4( /)5"#,$%.4' 2,9) $,18#)( ,';00)$/%1 %4-./0,$%.4 +/.:#)0' $2/."52
fd< _,$2; _/%'$.-6 H*0$*- .-8"$0-A L/$08: 3B TA"/%J C<A-"8+ 6 R?O !^[Pci>=R] HN)1<f6 KLMLI6 2$$+gll0.4);7,$12<:4)$<1.0l',9%45&0.4);l:#.5l()9%#&()$,%#'l.4#%4)&/)$,%#)/&12,/5)(&7%$2&-/,"(&$2/),$'ljb\hl<
ff< O$"(%)' .- %41/),')( $/,4'+,/)41; %4 :.4( 0,/8)$' -."4( $2,$ $/,4'+,/)41; 0,;2,9) /)("1)( #%F"%(%$;6 #),(%45 $. '.0) 0,/8)$' :)%45 %4)--%1%)4$#; $2%4< ])4(/%8?)'')0:%4()/ n i%##%,0 !,37)##6 F"A=-8+? CA"*+6"A-*4: "*% 8<- ;3A63A"8- U3*% F"A=-8 6 KK Z<^X PR^[< GPDOG< KM\6 KKhmK` HKLLhI<
f\< '-- N,4,2 ?.;(6 ]3*- 3B C<$+ 7+ .-"0? 7%-*8$8: "*% 2"A8$4$6"8$3* $* TA$-*%+8-A 6 $* O =DVR=VDPO ^X G >D=YRYG>=Y^[ Y[ NYSY=>U RVU=VDP MjK6 Mbd HZ.) _,/,5,4%' )(<6 KLL\I<X./ $2) /)1./(6 !'< ?.;( (.)' 4.$ 1,+%$,#%@) 2)/ -%/'$ ./ #,'$ 4,0)< =2%' %0+.')' , 4)5,$%9))3$)/4,#%$; .4 +).+#)6 #%8) 0)6 72. $2)4 2,9) $. (),# 7%$2 )(%$./' ,4( /),()/' 72. ,/) 4.$ %4.4 $2) ()9%,$%.4 -/.0 5/,00,$%1,# /"#)'<
fh< '--J -(>(6 R.0+#,%4$ ,$ h6 =2.0+'.4 9< X,1):..86 [.< MgL`&19&KK`K\&_!! HO<N<R,#< O)+$< K`6 KLL`IT X%/'$ >0)4()( R.0+#,%4$6 c%45#%45 9< )?,;6 [.< R&L`&LM\jj H[<N< R,#< Z"4) Mf6 KLL`I<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 457/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"!M
0,4(,$./; (%'1#.'"/) #,7'6 0,4(,$./; 1..#%45&.-- +)/%.('6 ,4( /)$"/4+.#%1%)'<f` [)7 0"#$%&'%()( +#,$-./0 :"'%4)'')' 1,4 5%9) /%') $. 4.9)# %''")''"12 ,' 1;:)/ :"##;%45< S.9)/40)4$' 1,4 +,'' 4)7 #,7' %4 /)'+.4') $. $2%'6,' $2) O$,$) .- !%''."/% (%( ,-$)/ $2) !)5,4 !)%)/ '"%1%() ,4( $2)"4'"11)''-"# +/.')1"$%.4 .- $2) %4'$%5,$./<\L
O.0) 0"#$%&'%()( +#,$-./0' 2,9)6 2.7)9)/6 ()9)#.+)( $2)%/ .740)12,4%'0' -./ (),#%45 7%$2 :,( :)2,9%./< =2); ,(.+$ /"#)' -./ $2) "')/' .4.4) ./ 0./) '%()' .- $2) +#,$-./06 %4'$%$"$) /)+./$%45 ,4( ()$)1$%.40)12,4%'0' %4 ./()/ $. "41.9)/ 9%.#,$%.4' .- $2)') /"#)'6 /)F"%/) )9,#",$%.4'.- $2) )9%()41) $2/."52 0,4(,$./; ,/:%$/,$%.4'6 %0+.') +)4,#$%)'6 ,4('.0)$%0)' )9)4 ,##.7 ,++),#' -/.0 $2) %4%$%,# )9,#",$%.4 ,' '2.74 :)#.7<
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
=2) ')1.4( /),'.4 -./ , +#,$-./0 $. $,8) ,1$%.4 %' $2,$ +":#%1 #,7' ,4(/)5"#,$%.4' 0,; :) %41.0+#)$) 72)4 %$ 1.0)' $. +.#%1%45 4)5,$%9))3$)/4,#%$%)' .4 +#,$-./0'< =2) 5.9)/40)4$ 0,; 4.$ 2,9) /)1.54%@)( H.//)1.54%@)( $.. '#.7#;I , +/.:#)0 '"12 ,' 1;:)/ :"##;%45 .4 '.1%,# 4)$7./8'./ $2) .++./$"4%'$%1 %4-#,$%.4 .- '),/12 /,48%45'< Y$ 0,; 2,9) .$2)/ .:A)1$%9)'./ .:#%5,$%.4'6 '"12 ,' $2) +/.$)1$%.4 .- -/)) '+))12 $2,$ ()$)/ ./ +/)1#"() %$
f`< '--J -(>(6 =/"$2 %4 U)4(%45 >1$6 Md V<O<R< t MfLM HM`fhIT !,54"'.4&!.'' i,//,4$; >1$6 Md V<O<R< t KjLM HM`\dIT X=R R..#%45&^-- D"#)6 Mf R<X<D< t bK` HM``dI<
\L< '-- >''.1%,$)( G/)''6 F3( 7*8-A*-8 V"A"++9-*8 U$00 2"++-% "B8-A F:'6"4- '/$4$%- 6 VO>
=^N>c 6 Z"#< M6 KLLh6 "#"$0"G0- "8 2$$+gll777<"',$.(,;<1.0l4)7'l4,$%.4lKLLh&Lf&jL&%4$)/4)$r[<2$0<
\M< X./ , /)#,$)( (%'1"''%.4 +-- ])4/; P< O0%$26 2A36-A8: "*% 2A36-A8: ./0-+J \` [<c<V U< D PW < M\M` HKLLbIT ])4/; P< O0%$26 )K40/+$3* "*% 2A36-A8: ./0-+ $* 8<- O"D 3B ]/$+"*4- 6 `L W >< U< D PW < `fd HKLLbI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 458/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!""# ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
-/.0 )4-./1%45 /"#)' $2,$ +/%9,$) +,/$%)' 0,; ()1%() $. ,(.+$ $2)0')#9)'s '"12 ,' ,5,%4'$ 2,$) '+))12 ./ +./4.5/,+2;< =2) 5.9)/40)4$ 0,; ,#'.()1%() 4.$ $. +"/'") 9,/%."' +/.:#)0' '%0+#; :)1,"') $2) 1.'$ .- (.%45 '.s %41#"(%45 "4%4$)4()( 1.4')F")41)' $2,$ .-$)4 /)'"#$ -/.0 5.9)/40)4$ #,7',4( /)5"#,$%.4's)31))(' $2) #%8)#; :)4)-%$'< =2) +#,$-./0 2,' 0./)%4-./0,$%.4 ,:."$ $2) +/.:#)0'6 1,4 /),1$ 0./) F"%18#; $. $2)06 ,4( 1,40.(%-; %$' 5.9)/4,41) 0)12,4%'0' 0./) F"%18#; %- $2); ,/) 4.$ 7./8%45 ./,/) 2,9%45 +)/9)/') )--)1$'<
> +/%9,$) +#,$-./0 (.)' 4.$6 .- 1."/')6 2,9) $2) ',0) /,45) .-%4'$/"0)4$' ,9,%#,:#) $. %$ ,' , +":#%1 )4$%$; (.)'< Y$ 1,44.$ %''") '),/12
7,//,4$'6 )45,5) %4 7%/)$,+'6 1.4("1$ (,74 /,%('6 +"$ +).+#) %4 A,%#6 ./ ():,/
7/.45(.)/' -/.0 ,4;$2%45 .$2)/ $2,4 +,/$%1%+,$%45 .4 $2) +#,$-./0 %$')#-<V4#)'' %$ %49.8)' +":#%1 #,7'6 -./ )3,0+#) :; -%#%45 , :/),12 .- 1.4$/,1$1#,%06 %$ 1,44.$ 1.0+)# $2) (%'1.9)/; .- %4-./0,$%.4 -./ ,4 %49)'$%5,$%.4<[./ 1,4 , +/%9,$) +#,$-./0 1.##)1$ +)4,#$%)' "4#)'' %$ /)F"%/)' , :.4( ./1.##)1$' %$ ,' , 1.4(%$%.4 .- $2) ,5)4$ 2,9%45 1.4$%4")( ,11)'' $. $2)+#,$-./0<
Y4 -,1$6 ,## .- $2) +#,$-./0C' +.7)/'6 ,'%() -/.0 1.4$/,1$ ,4( .$2)/ /%52$'$2,$ %$ 7."#( 2,9) $. )4-./1) %4 +":#%1 1."/$'6 /)'$ %4 %$' +/.+)/$; /%52$' .9)/$2) +#,$-./0 %41#"(%456 0.'$ %0+./$,4$#;6 %$' ,:%#%$; $. )31#"()< =2%' ')1$%.4)#,:./,$)' .4 $2%' +.%4$ :)-./) $"/4%45 $. ,4 .9)/9%)7 .- +#,$-./05.9)/4,41) 1.41)/4%45 4)5,$%9) )3$)/4,#%$%)'<
!" =]P GD^GPD=c D YS]=O XD>!Pi^D_
O$/,2%#)9%$@ 2,' +/)')4$)( , "')-"# -/,0)7./8 -./ ,4,#;@%45 2.7 +/.+)/$;/%52$' 1,4 :) "')( $. (),# 7%$2 %4-./0,$%.4 ,';00)$/%)'< \K =2) /%52$ $.)31#"() 2,' -."/ '":./(%4,$) /%52$'g HMI $2) ])/0%$C' D%52$ $. 8))+ ,## ,5)4$'.-- $2) .74)/C' +/.+)/$;T HKI $2) ?."41)/C' D%52$ $. ,(0%$ ,5)4$' ')#)1$%9)#;$. $2) +/.+)/$; ,4( $2)/)-./) $. )A)1$ ,5)4$' ')#)1$%9)#; -/.0 $2) +/.+)/$;T HjI$2) P31#"'%.4,/; W%:) 72%12 "')' '.1%,# ,4( +';12.#.5%1,# ',41$%.4' $.(%'1."/,5) '.0) ,5)4$' -/.0 )4$)/%45 $2) +/.+)/$;T ,4( HbI $2) P31#"'%.4,/;
>0)4%$; 72%12 "')' 1#": 5..(' $. './$ ()'%/,:#) ,4( "4()'%/,:#) )4$/,4$'<\j
\K< '-- U%./ Z,1.: O$/,2%#)9%$@6 7*B3A9"8$3* @+:99-8A$-+ "*% 8<- .$><8+ 83 )K40/%- 6 MLb!YR]< U< D PW < Mhjd6 Mhj\ HKLLfI< ?."(/)," n ],5%"6 +/6A" 4.$) MM6 ,$ Mf`6 )0+2,'%@) $2)B?."41)/C' D%52$E %()4$%-%)( :; O$/,2%#)9%$@< ].7)9)/6 %4 $2) 1.4$)3$ .- $2)%/ ,4,#;'%' .- $2)5)4)/,# '.#"$%.4 :; +#,$-./0' .- 0,/8)$ -,%#"/)'6 +#,$-./0' ,#'. "') $2) P31#"'%.4,/; W%:)
H)<5<6 , 0,5,@%4) -./ , 4%12) ,"(%)41)I ,4( $2) P31#"'%.4,/; >0)4%$; H)<5<6 , (%'1."4$()+,/$0)4$ '$./) ,' ,4 ,412./ %4 , 0,##I<
\j< O$/,2%#)9%$@6 +/6A" 4.$) \K6 ,$ Mhj\<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 459/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !""!
]) ,/5")' $2,$ $2) #,'$ $2/)) .- $2)') /%52$' ,/) '":'$%$"$,:#) 0)$2.(' -./0,3%0%@%45 $2) 9,#") .- $2) +/.+)/$;<\b
O$/,2%#)9%$@C' -/,0)7./8 5)4)/,##; 0,+' 7)## %4$. $2) $..#' $2,$ 0"#$%&'%()( +#,$-./0' "') $. .+$%0%@) $2) 9,#") .- $2)%/ +/.+)/$;< O.0) +#,$-./0')3)/1%') $2) ])/0%$C' D%52$ $2/."52 ()'%54 ()1%'%.4'\d ,4( '$,/$ ."$ #%-)'%45#)&'%()(< X./ )3,0+#)6 $2) G,#0 G%#.$ 1/),$)( $2)%/ .74 ,++#%1,$%.4' ,4((%( 4.$ ,##.7 .$2)/' $. (. '. -./ ,:."$ )%52$))4 0.4$2' ,-$)/ %$' #,"412< \f
>#0.'$ ,## .- $2) '$/,$)5%)' -./ /)("1%45 4)5,$%9) )3$)/4,#%$%)' ()+)4( .4 $2))3)/1%') .- $2) ?."41)/C' D%52$< =2%' %' (%'1"'')( %4 0./) ()$,%# %4 $2) 4)3$O)1$%.4< =2) P31#"'%.4,/; W%:) ,4( P31#"'%.4,/; >0)4%$; ,/) "')( :; 0,4;+#,$-./0' $. ,$$/,1$ , +,/$%1"#,/ 5/."+ .- "')/' .4 .4) '%() $2,$ %' 9,#",:#) $.
, +,/$%1"#,/ 5/."+ .- "')/' .4 $2) .$2)/ '%()< =2)/) %' , :#"//; #%4) :)$7))4$2) $7. '$/,$)5%)' -./ 0"#$%&'%()( +#,$-./0'< [%12) 0,5,@%4)' ,/) ,4)3,0+#)< ./**-A+ Q3A0% %' ()'%54)( $. ,$$/,1$ /"44)/' ,4( 1.0+,4%)' $2,$
7,4$ $. ')## $. $2)0<\\ =2) 9%:) ,4( ,0)4%$; 5. $.5)$2)/s1.0+,4%)' $2,$ 7,4$ $. ,(9)/$%') $. /"44)/' ,/) ,$$/,1$)( $. $2) ,0)4%$; :; ,4 ,55/)5,$%.4 .-/"44)/' 1/),$)( :; $2) 9%:) 5)4)/,$)( :; $2) 1.4$)4$ H4.$ $. 0)4$%.4 $2)$%$#)I<
O0%$26 72. O$/,2%#)9%$@ :"%#(' .46 ,/5")' $2,$ +/.+)/$; /%52$' ,4(5.9)/4,41) ,/) '":'$%$"$)' -/.0 $2) '$,4(+.%4$ .- 0,3%0%@%45 '.1%,#
7)#-,/)<\h =2) %(), %' $2,$ $2)/) ,/) '.0) 0,/8)$ -,%#"/)' $2,$ 5.9)/40)4$'1,4 /)'.#9) +/)1%')#; $2/."52 #,7' ,4( /)5"#,$%.4< =2)/) ,/) .$2)/' $2,$+/%9,$) +,/$%)' 1,4 '.#9) $2/."52 $2) :#"4$ %4'$/"0)4$ .- +/.+)/$; /%52$':)1,"') $2); 2,9) :)$$)/ ,11)'' $. %4-./0,$%.4<
!"#$%&'%()( +#,$-./0' 1,4 :) ,4,#;@)( %4 $2%' -/,0)7./8< =2); /)+/)')4$$2) %4$)/)'$' .- , 1.00"4%$;s,#:)%$ , +/%9,$) ,4( 9.#"4$,/; .4)sA"'$ ,' ,5.9)/40)4$ (.)'6 ,4( ,/) +)/2,+' )9)4 0./) 0.$%9,$)( $2,4 $2)5.9)/40)4$ $. 0,3%0%@)6 ,$ #),'$ ,++/.3%0,$)#;6 $2) '.1%,# 7),#$2 .- $2,$1.00"4%$;< =2) +#,$-./0 .74)/ ,#'. 2,' %41)4$%9)' $. $,8) $2) #.45&/"4%4$)/)'$' .- $2) 1.00"4%$; %4$. ,11."4$ '%41) %$ %' 0,3%0%@%45 $2) #.45&/"4
9,#") -./ %$')#- ./ %$' '2,/)2.#()/'< =2) +#,$-./0 .-$)4 "')'6 ,0.45 .$2)/
\b< 7%( ,$ MhfM<\d< '-- P W>[O6 ] >SYV n OR]!>UP[OPP6 +/6A" 4.$) dM6 ,$ Mfhmf`<\f< 7%( \\< '-- D V[[PD CO i ̂ DUN6 2$$+gll777</"44)/'7./#(<1.0 H#,'$ 9%'%$)( X):< K`6 KLMKI<
=2) 7):'%$) 2.0)+,5) -),$"/)' , :,44)/ ,( -./ $2) :..8 F@.@CVH]? C<- 508$9"8-CA"$*$*> L/$%- T $2) O2.)' n S),/ ')1$%.4 %41#"()' , O$./) X%4()/ $..#6 ,4( $2) ["$/%$%.4 n i)%52$ U.'' ')1$%.4 (%'+#,;' , '%() ,( -./ $2) :..8 C<- O-"* U-00: 2A-+4A$68$3*? C<- B"+8 "*%
B3306A33B %$-8 "*% D-$><8E03++ 60"* BA39 @9-A$4"X+ 836 /A>-*8E4"A- %3483A <\h< '-- ])4/; P< O0%$26 )K40/+$3* R-A+/+ L3#-A*"*4-? CD3 '8A"8->$-+ B3A !-0$*-"8$*> 2A36-A8:
.$><8+ 6 jM Z< ^X UPS>U O =VN< Obdj HKLLKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 460/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!""" ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
$2%45'6 , 5.9)/4,41) ';'$)0 -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)' ,0.45+#,$-./0 "')/'< ?"$ -./ $2) +#,$-./06 +/.+)/$; /%52$'s,4( $2) :"4(#) .-/%52$' $. )31#"() %()4$%-%)( :; O$/,2%#)9%$@6 ,4( %4 +,/$%1"#,/ $2) ?."41)/C'D%52$s,/) 4)1)'',/; -./ 5.9)/4,41)<
#" OPUPR=YWP PaRUVOY^[
G#,$-./0 5.9)/4,41) 5)4)/,##; 1.4'%'$' .- , ')$ .- /"#)' -./ +#,$-./0,5)4$' $2,$ +/.'1/%:) 1)/$,%4 ,1$%.4' :; $2)') ,5)4$' ./ 1.0+)# 1)/$,%4 .$2)/,1$%.4'< =2)') /"#)' 1,4 :) "')( $. %41/),') +.'%$%9) )3$)/4,#%$%)'< X./)3,0+#)6 1,/( 4)$7./8' /)F"%/) :,48' $. %4')/$ ,11)+$,41) 0,/8' .4 1,/(',4( 0)/12,4$' $. +.'$ ,11)+$,41) 0,/8'T $2%' 0,8)' %$ ),'%)/ -./ 1,/(2.#()/'
,4( 0)/12,4$' 72. "') $2) ',0) +,;0)4$ 0)$2.( $. -%4( ),12 .$2)/<
\`
!./)1.00.4#;6 $2."526 /"#)' ,/) ()'%54)( $. )#%0%4,$) ./ 0%$%5,$) 4)5,$%9))3$)/4,#%$%)'< =2)') /"#)' 4))( $. 2,9) 1.4')F")41)' $. :) 0),4%45-"#< =2.')1.4')F")41)' 1,4 %49.#9) +,/$%,# ./ -"## )31#"'%.4 -/.0 $2) +#,$-./06 ./ %$':)4)-%$'6 -./ '.0) +)/%.( .- $%0)6 +)/2,+' -./)9)/<hL =2) +#,$-./0 ,#'. 4))('$. :) ,:#) $. ()$)1$ 9%.#,$%.4' -./ $2)') /"#)' $. :) 0),4%45-"#< =2,$ 1."#( :), 1.0:%4,$%.4 .- +/.,1$%9) ()$)1$%.4 ./ /)'+.4') $. 1.0+#,%4$'< >4( -%4,##;6$2) +#,$-./0 0,; )0+#.; , +/.1)'' %4 72%12 '"'+)1$)( 7/.45(.)/' 1,4 +#),($2)%/ 1,')'6 ./ ,$ #),'$ 1.49); +.$)4$%,##; "')-"# %4-./0,$%.46 ,4( +.''%:#; ,4,++),#' +/.1)''<
=2) G./$.:)##. D.,( >4$%F") N),#)/' >''.1%,$%.4 %4 U.4(.4 +/.9%()',4 )3,0+#)<hM > 4"0:)/ .- ,4$%F") (),#)/' 2,9) #.1,$)( .4 G./$.:)##. D.,(%4 U.4(.4< =2,$ %' , 1.00.4 '%$",$%.4 %4 $2) )1.4.0%1 5).5/,+2; .-,55#.0)/,$%.4 ,4( %' ,4 )3,0+#) .- , +#,$-./0 $2,$ )0)/5)' 4,$"/,##; 7%$2."$
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
\`< '--J -(>(6 R$+" 7*8-A*"8$3*"0 H6-A"8$*> .->/0"8$3*+ 6 W YO> J ^1$.:)/ Md6 KLMM6 ,$ MdjmdbH0,/8' /)F"%/)( .4 1,/('I ,4( bjb H0,/8' /)F"%/)( ,$ +.%4$&.-&',#)I 62$$+gll"',<9%',<1.0l0)/12,4$'l.+)/,$%.4'l.+r/)5"#,$%.4'<2$0#<
hL< '--J -(> <6 '8"8-9-*8 3B .$><8+ "*% .-+63*+$G$0$8$-+ 6 X >RP?^^_ 6 2$$+gll777<-,1):..8<1.0l#)5,#l$)/0' H#,'$ 9%'%$)( X):< K`6 KLMKIT P3/A 5+-A @>A--9-*8J P?>c 6 2$$+gll+,5)'<):,;<1.0l
2)#+l+.#%1%)'l"')/&,5/))0)4$<2$0# H#,'$ 9%'%$)( X):< K`6 KLMKI u2)/)%4,-$)/ )?,; V')/ >5/))0)4$v<
hM< '-- P W>[O n OR]!>UP[OPP6 +/6A" 4.$) d6 ,$ MMLmMM<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 461/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !""7
,''.1%,$%.4 ,4( $2)/)-./) #.') ,11)'' $. $2) 1/)(%:%#%$; '%54,# $2,$ $2),''.1%,$%.4 +/.9%()' $. 1"'$.0)/'<hK
^$2)/ 1.00)/1) +#,$-./0' 2,9) '%0%#,/ /"#)'< )?,; 2,' , ()$,%#)( "')/,5/))0)4$ -./ :";)/' ,4( ')##)/'<hj Y$ $)##' "')/' $2,$ )?,; 2,' $2) /%52$ $./)'$/%1$ $2)%/ ,11)'' $. $2) '%$) %4 9,/%."' 7,;'6 %41#"(%45 -"## $)/0%4,$%.46 %-$2) "')/ ,:"')' $2) '%$)<hb =2) "')/ ,5/))0)4$ %41#"()' , 0,4(,$./; (%'+"$)/)'.#"$%.4 0)12,4%'0 -./ :";)/' ,4( ')##)/'< )?,; 2,' ()$,%#)( /"#)' -./:";)/'hd ,4( ')##)/'hf $2,$ +/.2%:%$ , 9,/%)$; .- ,1$%.4' $2,$ 1."#( /)'"#$ %44)5,$%9) )3$)/4,#%$%)'< > 0,A./ 1.41)/4 %' $2) %4$)5/%$; .- $2) ,"1$%.4 +/.1)''<X./ )3,0+#)6 :";)/' ,/) 4.$ ,##.7)( $. :%( .4 %$)0' .--)/)( :; ')##)/' $2);84.7 +)/'.4,##;< O)##)/' 72. ,/) :,44)( -/.0 $2) '%$) 1,4 ,++),# $2,$
()1%'%.4<h\
=2)') $;+)' .- /"#)' '.#9) ')9)/,# +.''%:#) )3$)/4,#%$; +/.:#)0'< R.4'%()/
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
hK< BY- %$ %' /)+./$)( $2,$ , 0)0:)/ 9%.#,$)' $2) 1.()6 7) %4$)/9%)7 $2,$ 0)0:)/ $.2),/ 2)l'2) 2,' $. ',; ,4( $,8) ,1$%.4 ,11./(%45#;< =2%' 0,; :) , 9)/:,# ./ 7/%$$)4 7,/4%454.$ $. (. %$ ,5,%4 ./ 0./) ')9)/) ,1$%.4 %41#"(%45 )3+"#'%.4 -/.0 $2) >''.1%,$%.4<E P&0,%#-/.0 U);#, ^@;"/$6 G./$.:)##. !,/8)$ >''.1%,$%.46 $. Z,1F")#%4) !"/+2;6 R.4'"#$,4$6!,/8)$ G#,$-./0 N;4,0%1' H!,/< Mh6 KLMK6 MjgLdgLL RO=I H.4 -%#) 7%$2 ,"$2./I<
hj< '-- )?,; V')/ >5/))0)4$6 +/6A" 4.$) hL<hb< =2) "')/ ,5/))0)4$ ',;' Bi%$2."$ #%0%$%45 .$2)/ /)0)(%)'6 7) 0,; #%0%$6 '"'+)4(
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i) ,#'. /)')/9) $2) /%52$ $. 1,41)# "41.4-%/0)( ,11."4$' ./ ,11."4$' $2,$ 2,9):))4 %4,1$%9) -./ , #.45 $%0)6 ./ $. 0.(%-; ./ (%'1.4$%4") )?,; '%$)'6 ')/9%1)' ./ $..#'<E 7%(
hd< '-- ./0-+ B3A U/:-A+^H#-A#$-D 6 P?>c 6 2$$+gll+,5)'<):,;<1.0l2)#+l+.#%1%)'l:";)/&/"#)'&.9)/9%)7<2$0# H#,'$ 9%'%$)( X):< K`6 KLMKI<
hf< '-- ./0-+ B3A '-00-A+^H#-A#$-D 6 P?>c 6 2$$+gll+,5)'<):,;<1.0l2)#+l+.#%1%)'l')##)/&
/"#)'&.9)/9%)7<2$0# H#,'$ 9%'%$)( X):< K`6 KLMKI<h\< '-- V-06^'/+6-*%-% "443/*8+ 6 P?>c 6 2$$+gll+,5)'<):,;<1.0l2)#+l,11."4$l
'"'+)4()(&,11."4$'<2$0# H#,'$ 9%'%$)( >+/< ML6 KLMKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 462/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!""L ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
/)-"') $. ,11)+$ 1,/(' ')#)1$%9)#; 0,; %0+.') 1.'$' .4 .$2)/ 0)/12,4$' :;()5/,(%45 $2) .9)/,## F",#%$; .- $2%' -./0 .- +,;0)4$< =2)/) %' , -"/$2)/4)5,$%9) )3$)/4,#%$;< O.0) 0)/12,4$' 0,; "') $2) ()'%/) $. +,; 7%$2 , 1,/( ,', 0)$2.( -./ %0+#)0)4$%45 +/%1) (%'1/%0%4,$%.4< ^4 ,9)/,5)6 1.4'"0)/' $2,$
7,4$ $. +,; 7%$2 1,/(' ,/) #)'' #%8)#; $. 2,9) ,4.$2)/ )F",##; 1.49)4%)4$+,;0)4$ 0)$2.( ,4( 0,; $2)/)-./) :) 7%##%45 $. +,; , 2%52)/ +/%1) $. $2)0)/12,4$< =2%' 0,; :) , +/.-%$&0,3%0%@%45 '$/,$)5;6 )'+)1%,##; 72)4 %$ %'"4#%8)#; $2) 1.4'"0)/ 7%## :) , /)+),$ 1"'$.0)/ H)<5<6 , $."/%'$I<
> 1.00.4 +/.:#)0 -./ (,$%45 '%$)' %49.#9)' +/)9)4$%45 "47,4$)(,++/.,12)'< O%$)' '"12 ,' )],/0.4; 12)18 $2)%/ "')/' ,5,%4'$ #%'$' .-/)5%'$)/)( ')3 .--)4()/'<hh =2); ,#'. (. 4.$ ,##.7 "')/' $. '),/12 -./ +/.-%#)'<
Y4'$),( $2) '%$) 0,$12)' +/.-%#)' "'%45 %$' ,#5./%$20 ,4( +/)&'1/))4' ),121,4(%(,$)< >4 %4$/.("1$%.4 %' 0,() .4#; %- :.$2 +,/$%)' ,5/)) $. $2%'< >$ $2,$+.%4$6 %4(%9%(",# %()4$%-;%45 %4-./0,$%.4 %' 0,() ,9,%#,:#) $. :.$2 +,/$%)'<h` )],/0.4; ,#'. +/.9%()' , ')/9%1) 72)/):; "')/' 1,4 /)+./$ +/.:#)0' ,4()],/0.4; 1,4 $,8) ,1$%.4' %41#"(%45 /)0.9%45 .--)4(%45 %4(%9%(",#' -/.0%$' ')/9%1)<`L
i2%#) 0,4; 0"#$%&'%()( +#,$-./0' 2,9) 5.9)/4,41) ';'$)0' $. #%0%$4)5,$%9) )3$)/4,#%$%)'6 .$2)/' (. 4.$ ./ 2,9) F"%$) #%0%$)( .4)'< >(9)/$%'%45&'"++./$)( 0)(%, $)4( $. 2,9) 9)/; #%0%$)( '1/))4%45 .- ,('< =2); .-$)4+/.2%:%$ ,(9)/$%')0)4$' $2,$ 7."#( :) .--)4'%9) $. $2)%/ /),()/'<`M Y4 $2) 4)3$
hh< '-- '"B-8: C$6+ 6 P] >D!^[c 6 2$$+gll777<)2,/0.4;<1.0l',-)$;l$%+' H#,'$ 9%'%$)(X):< K`6 KLMKI< =2) BN. c."/ ^74 D)'),/12E O)1$%.4 '$,$)' $2,$ )],/0.4; )0+#.;''1/))4%45 $..#'6 %41#"(%45 12)18%45 V<O< '":'1/%:)/' ,5,%4'$ ')3 .--)4()/ /)5%'$/%)' %4 $2)V4%$)( O$,$)'< '-- $%(
h`< '-- -V"A93*: C3/A 6 P] >D!^[c 6 2$$+gll777<)2,/0.4;<1.0l$."/ H#,'$ 9%'%$)( >+/<ML6 KLMKIT -V"A93*: $+ F3A- 8<"* CA"%$8$3*"0 !"8$*> '$8-+ 6 P] >D!^[c 62$$+gll777<)2,/0.4;<1.0l72;l H#,'$ 9%'%$)( >+/< ML6 KLMKI<
`L< G,0 ].#05/)46 @ '"B-8: .-9$*%-A BA39 -V"A93*:J P] >D!^[c ?U^S H>+/< Mh6KLMMI6 2$$+gll,(9%1)<)2,/0.4;<1.0l:#.5lKLMMlLblMhl,&',-)$;&/)0%4()/&-/.0&)2,/0.4;&KlHBY- ;." )9)/ ,/) 1.41)/4)( ,:."$ .4) .- ;."/ 0,$12)' -./ ,4; /),'.46 +#),') ')4( ,4 )0,%#$. 0,$121.41)/4'w)2,/0.4;<1.0 '. 7) 1,4 %49)'$%5,$) ,4( $,8) ,++/.+/%,$) ,1$%.4< i)2,9) , $),0 ()(%1,$)( $. ."/ 0)0:)/'C ',-)$; ,4( 1#.') ,11."4$' %00)(%,$)#; 72)4 7)/)1)%9) , 1/)(%:#) 1.0+#,%4$ ,:."$ '.0).4)C' '"'+%1%."' :)2,9%./< i)C## 4.$%-; ;." 72)4)9)/ '.0).4) %' /)0.9)( -/.0 $2) ')/9%1)6 '. +#),') +,; ,$$)4$%.4 $. $2.') )0,%#' %-;." )9)/ /)1)%9) .4) ,4( '$.+ ,## 1.00"4%1,$%.4 7%$2 $2,$ +)/'.4<EI<
`M< =2) R2%1,5. =/%:"4) (.)' 4.$ %4$)4$%.4,##; $,8) ,(9)/$%')0)4$' -./ ')3 ')/9%1)'6:"$ $2) +,+)/ (.)' 4.$ +.#%1) -,#') ,(9)/$%'%45 ./ +/.9%() /),()/' 7%$2 ,4; 0)12,4%'0 -./1.0+#,%4%45 ,:."$ ,(9)/$%')/' $2); 2,9) %4$)/,1$)( 7%$2 ,' , /)'"#$ .- '))%45 ,4,(9)/$%')0)4$ %4 $2) 0)(%,< '-- @%#-A8$+-A '-A#$4-+^V3D 78 Q3A=+ 6 R]Y< =DY?<6
2$$+gll777<12%1,5.$/%:"4)<1.0l,(9)/$%')/l2.7&%$&7./8'l H#,'$ 9%'%$)( !,/< M6 KLMKI<R/,%5'#%'$ 2,(6 %4 $2) +,'$6 ,11)+$)( $2) ,(9)/$%'%45 .- ,("#$ ')/9%1)' .4 %$' '%$)6 :"$ %$ 2,''%41) /)0.9)( $2) 1,$)5./;< '-- R#,%/) R,%4 !%##)/6 5*%-A T$A- TA39 ;A$8$4+J ;A"$>+0$+8 U034=+
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 463/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !""%
')1$%.4 7) 7%## ')) 2.7 !;O+,1)6 $2) #),(%45 '.1%,# 4)$7./8 '%$) %4 $2)V4%$)( O$,$)' %4 $2) 0%( KLLL'6 2,( , 9)/; #%0%$)( 5.9)/4,41) ';'$)0 %4%$%,##;,4( %0+.')( '.0) /"#)' .4#; %4 /)'+.4') $. '%54%-%1,4$ 0)(%, ,4(5.9)/40)4$,# +/)''"/)<
=2) /"#)' (%'1"'')( ,:.9) ,/) 5)4)/,##; )4-./1)( "'%45 $2) ?."41)/C'D%52$< V')/' $2,$ 9%.#,$) $2) /"#)' 1,4 :) )A)1$)( -/.0 $2) +#,$-./0< O.0)+).+#)s'"12 ,' 84.74 ')3",# +/)(,$./' .4 (,$%45 '%$)'s,/) :,//)( -/.0)4$)/%45 $2) +#,$-./0 %4 $2) -%/'$ +#,1)<
%" Y[X^D!>=Y^[ >[N =D>[OG>DP[Rc
!"#$%&'%()( +#,$-./0' ,#'. +/.9%() %4-./0,$%.4 $. (),# 7%$2 4)5,$%9)
)3$)/4,#%$%)'< =2,$ 2,' :)1.0) %41/),'%45#; 1.00.4 ,' , /)'"#$ .- $2)()9)#.+0)4$ .- Y4$)/4)$ ,4( 7): $)124.#.5%)'< )?,; !.$./' 2,' /)("1)( $2)#)0.4' +/.:#)0 :; +/.9%(%45 /,$%45' .4 ,"$.0.:%#) (),#)/'< )?,; +/.9%()' ,0)12,4%'0 -./ 1.4'"0)/' $. /,$) 0)/12,4$' ,-$)/ $2); 2,9) 0,() ,+"/12,')< =2); ')4( 1.4'"0)/' /)0%4()/' $. +/.9%() $2)') /,$%45'<`K >1.4'"0)/ 1,4 0%4%0%@) $2) #%8)#%2..( .- 5)$$%45 , 1,/ 7%$2 "4(%'1#.')(+/.:#)0' :; :";%45 -/.0 ,4 ,"$.0.:%#) (),#)/ $2,$ 2,' , 9)/; 2%52 /,$%45<
>"$.0.:%#) (),#)/' +/)'"0,:#; 84.7 $2,$ , 4)5,$%9) /,$%45 1,4 2,9) ,')/%."' )--)1$ .4 $2)%/ ,:%#%$; $. 0,8) ',#)'< =2) /)9%)7' #%0%$ $2) ,:%#%$; .-,"$.0.:%#) (),#)/' $. $,8) ,(9,4$,5) .- 1.4'"0)/' :; )3+#.%$%45 ,';00)$/%1%4-./0,$%.4< =2); ,#'. #%0%$ $2) ,:%#%$; .- (),#)/' $. %0+.') 4)5,$%9))3$)/4,#%$%)' .4 ),12 .$2)/ '%41) 5..( (),#)/' $)4( $. (/%9) ."$ :,( (),#)/' ,'1.4'"0)/' #.7)/ $2)%/ )3+)1$,$%.4' .4 $2) F",#%$; .- 1,/' $2); 5)$ -/.0 :,((),#)/'<`j O%0%#,/ /,$%45 ';'$)0' ,/) 1.00.4 4.7 .4 7):&:,')( +#,$-./0'
$2,$ 1.44)1$ :";)/' ,4( ')##)/'<`b
@44-+ + 83 _@%/0 8 '-A#$ 4-+X 2">-+ 6 [<c< =Y!PO6 O)+$< b6 KLML6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLMLlL`lLdl$)124.#.5;lLd1/,%5'<2$0#<
`K< '-- -U": 56%"8-+ 83 2":9-*8 "*% O-"#- T--%G"4= .-9$*%-A )9"$0+ '-*8 83 U/:-A+ 6 P? >c 6 2$$+gll+,5)'<):,;<1.0l')##)/%4-./0,$%.4l4)7'l/)+"$,$%.4)0,%#'<2$0# H#,'$ 9%'%$)( X):< K`6KLMKI HB?)1,"') $2) X))(:,18 ';'$)0 2,' '"12 ,4 %0+./$,4$ /.#) .4 )?,; %4 0),'"/%45 ,')##)/C' F",#%$; .- ')/9%1)6 ,4 )0,%# /)0%4(%45 :";)/' $. #),9) X))(:,18 %' ')4$ :; )?,; ,' ,1.4'%'$)4$ +,/$ .- ,## $/,4',1$%.4'<EI<
`j< X./ )3,0+#)6 %4 /)1)4$#; +"/12,'%45 ,4 ,"$.0.:%#) .4 )?,;6 $2) ,"$2./ -."4( $2,$%$ 7,' +.''%:#) $. #%0%$ 1.4'%()/,$%.4 $. (),#)/' 7%$2 MLL +)/1)4$ ',$%'-,1$%.4 /,$%45'< =2)/) 7,' 4. 4))( $. 1.4'%()/ (),#)/' $2,$ 2,( 1.0+#,%4$'<
`b< '--J -(> <6 ."8$*> " '-00-A 6 >!>e^[6 2$$+gll777<,0,@.4<1.0l5+l2)#+l1"'$.0)/l(%'+#,;<2$0#p4.()Y(qdj\hLf H#,'$ 9%'%$)( X):< K`6 KLMKIT T--%G"4= +43A-+J +8"A+J "*% :3/A
A-6/8"8$3* 6 P? >c 6 2$$+gll+,5)'<):,;<1.0l2)#+l-))(:,18l'1./)'&/)+"$,$%.4<2$0# H#,'$ 9%'%$)(X):< K`6 KLMKIT V3D %3 7 0-"#- B--%G"4=M 6 P =Oc 6 2$$+gll777<)$';<1.0l2)#+l,/$%1#)lMLK H#,'$ 9%'%$)( X):< K`6 KLMKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 464/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!""- ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
=2) +/.9%'%.4 .- %4-./0,$%.4 %' .-$)4 ,4 ,++#%1,$%.4 .- $2) P31#"'%.4,/; W%:)< =2) 0"#$%&'%()( +#,$-./0 %' )3)/1%'%45 %$' +/.+)/$; /%52$' 72)4 %$1.##)1$' %4-./0,$%.4 -/.0 "')/' .4 $2) +#,$-./0 ,:."$ .$2)/ "')/' ,4( 0,8)'$2,$ %4-./0,$%.4 +":#%1#; ,9,%#,:#)< Y$ (.)' 4.$ :."41) "')/' $2,$ )45,5) %4.++./$"4%'$%1 :)2,9%./6 ./ "')/' $2,$ 1/),$) 4)5,$%9) )3$)/4,#%$%)' ,' , /)'"#$.- $2) #)0.4' +/.:#)06 :"$ %$ (.)' )'$,:#%'2 , 0)12,4%'0 $2,$ $)4(' $. (/%9)#.7 F",#%$; "')/' .-- .- $2) +#,$-./0<
=2) P31#"'%.4,/; W%:) 1,4 :) "')( $. /)("1) 4)5,$%9) )3$)/4,#%$%)' %4.$2)/ 7,;' $2,4 $2) (%/)1$ +/.9%'%.4 .- %4-./0,$%.4< >4 )3,0+#) %' ZN,$)6
72%12 ,(9)/$%')' %$')#- ,' $2) +/)0%)/ Z)7%'2 '%45#)' 1.00"4%$;<`d ^4) 7."#()3+)1$ $2,$ 2,9%45 S)4$%#)' 7."#( %0+.') 4)5,$%9) )3$)/4,#%$%)' .4 Z)7'
#..8%45 -./ .$2)/ Z)7' '%41) %$ 7."#( %41/),') $2)%/ '),/12 1.'$' ,4( /)("1)0,$12%45 )--%1%)41;< Y$ 7."#( 4.$ ,++),/ $2,$ $2) '%$) 2,' ,4; 7,; $. 9)/%-;/)#%5%."' ./ )$24%1 :,185/."4(6 '. %$ 1."#( 4.$ '+)1%-%1,##; )31#"() 4.4&Z)7'<?"$ %$ 1,4 )'$,:#%'2 , 9%:) $2,$ $2%' %' , '%$) 0),4$ -./ Z)7%'2 0)4 ,4( 7.0)4$. 0))$ ),12 .$2)/< Y$ ,#'. )41."/,5)' S)4$%#)' $. %()4$%-; $2)0')#9)'<`f
'I
;1'&<)()C& <&;=:&* A1< D&? 93(2A1<:*
=2/)) )1.4.0%1,##; +/.0%4)4$ +#,$-./0 $;+)'s'.1%,# 4)$7./8'6 '$.18)312,45)'6 ,4( '),/12 )45%4)'s%##"'$/,$) $2) /.#) .- 5.9)/4,41) ';'$)0'6 $2)0)$2.(' $2,$ ,/) 12.')4 -./ $2)') 5.9)/4,41) ';'$)0'6 ,4( $2) $)4'%.4' $2,$5.9)/4,41) ';'$)0' 1/),$) :)$7))4 $2) +#,$-./0 '%()'<
!" O^RY>U [P=i^D_O
=2) )9.#"$%.4 .- '.1%,# 4)$7./8' -/.0 X/%)4('$)/ $. !;O+,1) $.X,1):..8 '2.7' $2) /.#) .- 4)5,$%9) )3$)/4,#%$%)' %4 +#,$-./0' $2,$ ,/)+)/2,+' $2) 1#.')'$ $. $/,(%$%.4,# 1.00"4%$%)' ,4( '2.7' 2.7 (%--)/)4$5.9)/4,41) ';'$)0' 1,4 ,--)1$ +#,$-./0 9,#")< [)5,$%9) )3$)/4,#%$%)' +#,;)( ,/.#) %4 $2) (.74-,## .- :.$2 X/%)4('$)/ ,4( !;O+,1)< !),472%#)6X,1):..8s72%12 2,' ,#0.'$ , :%##%.4 ,1$%9) 0.4$2#; "')/' ,/."4( $2)
7./#(s1.4$%4")' $. $2/%9) :)1,"') %$ 1/),$)( ,4( )0+2,'%@)' , B4%1)E1.00"4%$; $2,$ +/.2%:%$' -."# #,45",5)6 -,8) %()4$%-%)'6 ,4( +./4.5/,+2;<
`d< '-- ZN >=P6 2$$+gll777<A(,$)<1.0l H#,'$ 9%'%$)( >"5< M6 KLMMI<`f< '-- U%', O12)/@)/6 O33=$*> B3A FA( L33%+8-$*? Q<-* L-*8$0- '$*>0-+ '--= W-D$+< F"8-+ 6
Y[=PDX>Y=]X >!YUc <R^! 6 2$$+gll777<%4$)/-,%$2-,0%#;<1.0l/)#,$%.4'2%+'l%4$)/(,$%45lU..8%45 $ -./ $ !/ $ S..('$)%4 $ i2)4 $ S)4$%#) $ O%45#)' $ O))8 $ Z)7%'2 $ !,$)'<'2$0# H#,'$ 9%'%$)(X):< K`6 KLMKI HF".$%45 S,%# U,5"4,6 9%1) +/)'%()4$ .- 1.00"4%1,$%.4' ,$ !,$12[)$<1.06.74)/ .- ZN,$)g B xi2)4 , 0)0:)/ ')$' "+ , +/.-%#) .4 ZN,$)6 $2); ,/) ,'8)( $. +"$ (.74
$2)%/ /)#%5%."' ,--%#%,$%.4T $2)/) %' ,4 .+$%.4 $. +%18 ,4.$2)/ /)#%5%."' '$/),06C '2) ',%(< xY- $2);,/) 4.4&Z)7'6 7) )41."/,5) $2)0 $. +"$ (.74 $2,$ $2);C/) 4.$ Z)7%'2 ,4( 4.$ +/)$)4($2);C/) .- $2) Z)7%'2 -,%$2C EI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 465/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !""J
>#$2."52 %4%$%,##; '"11)''-"#6 X/%)4('$)/C' :)#,$)( ,$$)0+$ $. %0+.') ,+/%9,$) 5.9)/4,41) /)5%0) "#$%0,$)#; #)( $. %$' -,%#"/)< X/%)4('$)/ #,"412)( %4KLLK ,4( 5/)7 /,+%(#;<`\ Z.4,$2,4 >:/,0'6 %$' -."4()/6 $2."52$ $2) (,$%45'%$)' .- $2) $%0) 7)/) B$.. ,4.4;0."' ,4( 1/))+;<E`h =2); ,#'. +/.9%()(%4,11"/,$) %4-./0,$%.4< >' 2) +"$ %$6 Bu7v%$2 ZN,$)6 u-./ )3,0+#)6v , 5"; %',#0.'$ :."4( $. :) $7)4$; +."4(' 2),9%)/ ./ $7)4$; ;),/' .#()/ $2,4 2) %' %42%' +2.$.<E`` =. '.#9) $2%' +/.:#)0 >:/,0' ()9)#.+)( X/%)4('$)/ '. $2,$+).+#) 1."#( #%48 $. -/%)4(' ,4( ')) -/%)4(' .- -/%)4('< Bi)C/) $/;%45 $. 0,8)$2) +/.1)'' 0./) ,11."4$,:#)6E 2) ',%(<MLL BG).+#) 7%## +"$ , 0./) ,11"/,$)+%1$"/) .- $2)0')#9)' .4 X/%)4('$)/ :)1,"') ;." 84.7 ;."/ -/%)4(' 7%## '))%$<EMLM ?; KLLj X/%)4('$)/ 2,( 0./) $2,4 $2/)) 0%##%.4 "')/'<MLK
].7)9)/6 $2) "') .- X/%)4('$)/ $. 1/),$) -,8) +/.-%#)' F"%18#; :)1,0)+.+"#,/< BX,8)'$)/'Es,' $2); 7)/) 1,##)(s0,() "+ -%1$%.4,# +)/'.4,' -./$2)0')#9)'< >11./(%45 $. N,4,2 ?.;(6 BX,8)'$)/' 7)/) 1/),$)( -./ -,0."'+).+#)6 -%1$%.4,# 12,/,1$)/'6 .:A)1$'6 +#,1)' ,4( #.1,$%.4'6 %()4$%$; 0,/8)/'61.41)+$'6 ,4%0,#'6 ,4( 1.00"4%$%)'<EMLj
X/%)4('$)/C' 0,4,5)0)4$ '..4 /)1.54%@)( $2,$ X,8)'$)/' +.')( :"/()4'.4 $2) '.1%,# 4)$7./8%45 '%$)< ?.;( 7/%$)'6 Bu,v#$2."52 0.'$ +,/$%1%+,4$'#.9)( $2) +#,;-"# ,'+)1$ .- X,8)'$)/'6 %$ -"/$2)/ 1.0+#%1,$)( $2) 4)$7./8'$/"1$"/) ,4( 1/),$)( ,4 ,++),/,41) .- "4/)#%,:%#%$;6 72%12 %//%$,$)( :.$2 $2)1.0+,4; ,4( %4(%9%(",#' %4$)4$ .4 "'%45 X/%)4('$)/ -./ ')/%."'4)$7./8%45<EMLb
Y4 ,((%$%.46 '.0) .- $2) X,8)'$)/' ,$$/,1$)( 0,''%9) $/,--%16 72%12 1,"')( 1.45)'$%.4 .4 $2) '%$)C' ')/9)/'< D)1.54%@%45 $2)') 4)5,$%9))3$)/4,#%$%)'6 X/%)4('$)/C' .74)/' ()1%()( $. +"/5) $2) X,8)'$)/'6 72.1.4'"0)( '%54%-%1,4$ ,0."4$' .- '1,/1) ')/9)/ 1,+,1%$; ,4( 1/),$)( 4.%')<MLd
Y4 /)'+.4') $. X/%)4('$)/C' +"/5)6 $2) X,8)'$)/' ./5,4%@)( $2)0')#9)',4( ,$$)0+$)( $. /)%4')/$ $2)%/ +/.-%#)'< =2); ,#'. '."52$ /)9)45) .4X/%)4('$)/ :; 2,9%45 BX/,"('$)/'E 0,'F")/,() ,' /),# +).+#)< X/%)4('$)/C'5/.7$2 '#.7)( 1.4'%()/,:#; ,' , /)'"#$ .- %$' 1.4$%4")( )--./$' $. )31#"()
`\< '-- ?.;(6 +/6A" 4.$) f\6 ,$ Mjj<`h< '-- T$*%$*> O3#- H*0$*- 6 R-A+$3* `(a6 ?U^^!?PDS ?VOY[POOiPP_ 6 Z"4< ML6 KLLj6
2$$+gll777<:"'%4)''7))8<1.0l$)124.#.5;l1.4$)4$lA"4KLLjl$1KLLjLfMLrbK`br$1MLb<2$0<``< ZVUY> >[SiY[6 O =P>UY[S ! c OG>RPg =]P ? >==UP =^ R^[=D^U =]P !^O=
G^GVU>D i P?OY=P Y[ >!PDYR> dL HKLL`I<MLL< 7%(MLM< 7% <MLK< '-- @ ;"/8$3*"A: C"0- 6 X >O= R^!G>[c HN)1< M`6 KLL\I6 2$$+gll777<-,'$1.0+,4;<
1.0l0,5,@%4)lMMdl.+)4r-),$"/)'&2,18)/&(/.+."$&1).&1,"$%.4,/;&$,#)<2$0#<
MLj< ?.;(6 +/6A" 4.$) f\6 ,$ Mbh<MLb< 7%( ,$ MdL<MLd< '-- $%( ,$ MdM<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 466/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!""8 ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
+).+#) -/.0 $2) 4)$7./8< ^4) 1."#( 1.41#"() $2,$ X/%)4('$)/C' (.74-,##/)'"#$)( -/.0 %0+.'%45 ,4( )4-./1%45 , 5.9)/4,41) /)5%0)< >' 7%## '..4 :)1#),/6 , 0./) +#,"'%:#) %4$)/+/)$,$%.4 %' $2,$ X/%)4('$)/C' -,%#"/) $. %0+.')/"#)' ,5,%4'$ -,8) %()4$%$%)' ,$ $2) ."$')$ /)'"#$)( %4 '%54%-%1,4$ 4)5,$%9))3$)/4,#%$%)'<
V4#%8) X/%)4('$)/6 !;O+,1) )0:/,1)( , #,3 +.#%1; $.7,/(' $2) /)#%,:%#%$;.- 1.4'"0)/ %4-./0,$%.4< =2%' +.#%1; 2)#+)( %$' ),/#; /%') :"$ #)( $. $2)
7):'%$)C' "#$%0,$) (.74-,##< !;O+,1) 7,' -."4()( %4 KLLjgMLf %$' -."4()/'$2."52$ $2,$ X/%)4('$)/ 7,' 0,8%45 , 0%'$,8) %4 +/)9)4$%45 +).+#) -/.02,9%45 -,8) %()4$%$%)'<ML\ =2) 7):'%$) F"%18#; ,$$/,1$)( +).+#) 72. 7)/) :)%45()#)$)( -/.0 X/%)4('$)/6 %41#"(%45 =%#, =)F"%#,s, W%)$4,0)') 0.()#s
72.') /),# '"/4,0) 7,' [5";)4< =%#, =)F"%#, ,$$/,1$)( , #,/5)/ -.##.7%45 .4X/%)4('$)/ %4 +,/$ :; +.'$%45 +/.9.1,$%9) +2.$.' .- 2)/')#-< X/%)4('$)/()#)$)( 2)/ ,11."4$ ')9)/,# $%0)'6 ,4( ,' , /)'"#$ '2) 0.9)( $. $2) 0./)
7)#1.0%45 !;O+,1)<MLh ^$2)/' -.##.7)(< !;O+,1) 5/)7 9)/; F"%18#;6.9)/$..8 X/%)4('$)/6 ,4( :)1,0) .4) .- $2) 0.'$ 2),9%#; $/,--%18)( '%$)' .4$2) Y4$)/4)$ -./ , +)/%.( .- $%0)<ML`
!;O+,1)C' #,%'')@ -,%/) 5.9)/4,41) +.#%1%)' '..4 1,"')( +/.:#)0'<?)1,"') !;O+,1) (%( 4.$ /)F"%/) ./ )41."/,5) +).+#) $. +/.9%() /)#%,:#)%4-./0,$%.46 %$ ,$$/,1$)( 12%#( ')3 +/)(,$./' ,' 7)## ,' 0%4./' 72. #%)( ,:."$$2)%/ ,5)'< =2) '%$) ,#'. (%( #%$$#) $. (%'1."/,5) +).+#) -/.0 2,9%45 "')/ +,5)'
7%$2 B+,/$%,# 4"(%$;6 .:'1)4%$;6 1/"() ')3",# A.8)'6 ,4( .$2)/ .:A)1$%.4,:#)1.4$)4$<EMML !;O+,1) 5,%4)( , /)+"$,$%.4 ,' , B9./$)3 .- +)/9)/'%.4EMMM ,4(,' , '%$) $2,$ 7,' 4.$ 9)/; ',-)s#%8) , 1%$;C' /)( #%52$ (%'$/%1$<
>' $2) +.+"#,/%$; .- $2) '%$) ,$$)'$'6 , #,/5) 4"0:)/ .- +).+#) #%8)( $2)/%'F"y 4,$"/) .- !;O+,1)< c)$6 ,(9)/$%')/'s72. +/.9%()( $2) +/%41%+,#
MLf< '-- ;396"*: H#-A#$-D 3B F:'6"4-J 7*4(? '*"6+<38 6 ?U^^!?PDS ?VOY[POOiPP_ 2$$+gll%49)'$%45<:"'%4)''7))8<1.0l/)'),/12l'$.18'l+/%9,$)l'4,+'2.$<,'+p+/%91,+Y(qMKLbMKH#,'$ 9%'%$)( !,/< M6 KLMKI<
ML\< '-- N,4,2 ?.;(6 TA$-*%+J TA$-*%+8-A+J "*% C36 b? QA$8$*> ;399/*$8: $*83 U-$*> 3* '34$"0 ]-8D3A= '$8-+ 6 XYDO= !^[N>c HN)1< b6 KLLfI6 2$$+gll-%/'$0.4(,;<./5l2$:%4l15%7/,+l:%4l.A'l%4()3<+2+l-0l,/$%1#)l9%)7lMbMhlMjjf<
MLh< '-- U)9 S/.''0,46 C$0" C-\/$0" 6 =Y!P6 N)1< Mf6 KLLf6 2$$+gll777<$%0)<1.0l$%0)l0,5,@%4)l,/$%1#)lL6`M\M6Md\L\Kh6LL<2$0#<
ML`< Y$ 7,' .4) .- 1.0O1./)C' $.+ -%-$; 7): +/.+)/$%)' %4 $2) V4%$)( O$,$)' :; >+/%#KLLd< '-- ZVUY> >[SiY[6 +/6A" 4.$) ``6 ,$ MKf<
MML< '-- $%( ,$ MhM<
MMM< '-- X)#%3 S%##)$$)6 C<- .$+- "*% 7*>03A$3/+ T"00 3B F:'6"4- 6 ?U^^!?PDS
?VOY[POOiPP_ 6 Z"4< K\6 KLMM6 ,$ dK6 dh6 "#"$0"G0- "8 2$$+gll777<:"'%4)''7))8<1.0l0,5,@%4)l1.4$)4$lMM $ K\l:bKjdLdj`M\d\L $ +,5) $ d<2$0<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 467/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !""M
'."/1) .- /)9)4") -./ !;O+,1)MMK s(%( 4.$< R.0+,4%)' (%( 4.$ 7,4$ $. /%'8(%'+#,;%45 $2)%/ :/,4(' .4 +,5)' 7%$2 .:A)1$%.4,:#) 1.4$)4$< i%$2 #%0%$)(%4$)/)'$ -/.0 0,A./ :/,4(' %4 :";%45 ,(9)/$%'%45 %49)4$./;6 !;O+,1) 0.9)(%$' ,(9)/$%'%45 %49)4$./; $. .$2)/ ,(9)/$%'%45 4)$7./8'6 %41#"(%45 S..5#)C'1.4$)3$&:,')( ,(9)/$%'%45 4)$7./8<MMj =2)') 4)$7./8' %4')/$)( #.7&+/%1),(9)/$%')0)4$' ,"$.0,$%1,##; %4$. ,/),' !;O+,1) 0,() ,9,%#,:#)<MMb [.$'"/+/%'%45#;s5%9)4 $2) 1.4$)4$ .- $2) '%$)6 $2) #.7 +/%1)' -./ $2) ,(9)/$%'%45%49)4$./;6 ,4( '.0) .- $2) +).+#) ,$$/,1$)( $. !;O+,1)s, 4"0:)/ .- $2),(9)/$%')0)4$' $2,$ 7)/) (%'+#,;)( 7)/) ,#'. /)#,$)( $. $2%45' $2,$ '.0)+).+#) 7."#( -%4( .:A)1$%.4,:#)<
X,1):..8s72%12 '$,/$)( %4 X):/",/; KLLbs$..8 , 9)/; (%--)/)4$
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i2)4 %$ .+)4)( $. $2) 7./#( %4 O)+$)0:)/ KLLf6 X,1):..8 2,(dLL /)5%.4,# 4)$7./8'<MMd >#$2."52 $2%' ,++/.,12 0,() %$ 0./) (%--%1"#$ -./+).+#) $. "') -,8) %()4$%$%)' .4 X,1):..8 %$ 7,' '$%## +.''%:#)< X,1):..8s #%8) X/%)4('$)/s()#)$)' $2) +,5)' 7%$2 -,8) %()4$%$%)' $2,$ 9%.#,$) %$' $)/0' .-')/9%1)< X./ )3,0+#)6 %4 KLL\ %$ ()#)$)( $2) +,5)' $2,$ +).+#) 2,( ')$ "+ $./)+/)')4$ :/,4(' $2,$ 7)/) 4.$ ,##.7)( ,$ $2) $%0)<MMf
X,1):..8 2,' ,#'. $,8)4 ,1$%9) '$)+' $. #%0%$ 4)5,$%9) )3$)/4,#%$%)' .4 %$''%$) $2,$ 7."#( #%0%$ %$' ,++),# $. 4)7 "')/' ,4( $. ,(9)/$%')/' 72. ,/)1.4'%()/%45 %4')/$%45 0)'',5)' .4 %$' +,5)'< Y$' $)/0' .- ')/9%1) +/.2%:%$
MMK< 7 + F:'6"4- TA- - M 6 ! cO G> RP < R^! 6 H>"5< KK6 KLLhI 6 "#"$ 0"G 0 - " 8 2$$+gll7):<,/12%9)<./5l7):lKLLhLhKKL b̀MbKl2$$+gll777<0;'+,1)<1.0l!.("#)'l])#+lG,5)'l])#+R)4$)/<,'+3pR,$)5./;qMnk")'$%.4qjj<
MMj< '-- L33>0- +$>*+ cdaa9 ]-D+ ;3A6 !-"0 6 ??R [PiO6 >"5< \6 KLLf62$$+gll4)7'<::1<1.<"8lKl2%l:"'%4)''ldKdbfbK<'$0<
MMb< '-- _)9%4 _)##)2)/6 F:'6"4- "*% TA$-*%+ ]--% 83 F"=- F3*-:( @*% T"+8(6 i YDPN6 !,/<Kb6 KLLh6 "#"$0"G0- "8 2$$+gll777<7%/)(<1.0l$)12:%@l%$l0,5,@%4)lMf&Lbl:@r'.1%,#4)$7./8'<
MMd< '-- Z,4)$ _./4:#"06 T"4-G33= Q$00 '33* G- @#"$0"G0- 83 )#-A:3*- 6 VO> =^N>c 6 O)+$<MM6 KLLf6 2$$+gll777<"',$.(,;<1.0l$)12l4)7'lKLLf&L`&MM&-,1):..8&)9)/;.4)r3<2$0<
MMf< '-- [%,## _)44)(;6 T"4-G33= ;0-"*+-+ 2">-+ 3B '/663+-% T"=-+8-A+ 6 [Y>UU _ P[[PNc CO i P?U^S HN)1< M6 KLL\6 hgdb G!I6 2$$+gll777<4%,##8)44)(;<1.0l:#.5lKLL\lMKl-,1):..8&+,5)'&()#)$%.4'<2$0#< [.$)6 2.7)9)/6 $2,$ =%#, =)F"%#, 2,' , -,4 +,5) H+)/2,+' $2) 4,0) %'
4. #.45)/ 9%)7)( ,' -,8)I :"$ 7%$2 ()1%()(#; #)'' +/.9.1,$%9) +%1$"/)' $2,4 '2) 2,' .4!;O+,1)< '-- C$0" C-\/$0"X+ @0G/9+ 6 X >RP?^^_ 6 2$$+gll777<-,1):..8<1.0l=%#,l+2.$.' H#,'$ 9%'%$)( >+/< Mf6 KLMKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 468/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"7# ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
9,/%."' ,1$%.4' %41#"(%45 :"##;%456 %4$%0%(,$%456 ./ 2,/,''%45 ,4; "')/6 +.'$%451.4$)4$ $2,$ %' B2,$)-"#6 $2/),$)4%456 ./ +./4.5/,+2%16 %41%$)' 9%.#)41)T ./1.4$,%4' 4"(%$; ./ 5/,+2%1 ./ 5/,$"%$."' 9%.#)41)<EMM\
>' .- >+/%# KLL`6 MdLH)%52$))4 +)/1)4$I .- $2) 1.0+,4;C' hdL )0+#.;))' -.1"')( .4 +.#%1%45 $2)
7):'%$) -./ .--)4'%9) 1.4$)4$<MMh =2); 7."#( ()#)$) +2.$.' '"12 ,' , B5%/#
:#.7%45 ,4 )+%1 1#."( .- +.$ '0.8)E $2,$ 9%.#,$)( $2) '.1%,# 4./0' $2)1.0+,4; 7,4$)( $. +/.0.$)<MM`
>$ X,1):..86 $2) /,45) .- +.#%1)( ,1$%9%$; %' :/.,(< > (%9%'%.41,##)( V')/ ^+)/,$%.4' #..8' ,$ ,## 1.4$)4$ $2,$ "')/' ',; %'2,/,''%45 H9%, B/)+./$ $2%'E #%48' '+/),( #%:)/,##; $2/."52."$ $2)'%$)I ./ $2,$ '2.7' (/"5'6 4"(%$; ./ +./4.5/,+2;< Y$ ,#'. 0,%4$,%4'
,4 )3$)4'%9) B:#,18#%'$E .- -./:%(()4 4,0)' $2,$ 1,44.$ :) "')( $.0,8) 4)7 +/.-%#)'6 #%8) ?,$0,4< O.0) .- $2%' 0.4%$./%45 %' F"%$)'0,## :))/g ;."C/) 4.$ ,##.7)( $. 1,## '.0).4) , BA)/8E .4X,1):..8 %- '.0).4) /)+./$' %$< P0+#.;))' ,#'. 9%5./."'#; )4-./1)$2)%/ B/),#&4,0) 1"#$"/)ET $2); )9)4 (%',:#)( $2) ,1$/)'' U%4(',;U.2,4C' ,11."4$ %4 N)1)0:)/ ,-$)/ (%'1.9)/%45 $2,$ '2) 7,' .4 $2)'%$) "4()/ ,4 ,#%,'<MKL
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d -./ odhL
0%##%.4 ,4( '.#( %4 Z"4) KLMM -./ ojd 0%##%.4<MKM
X/%)4('$)/ 7,' '.#( -./ oKf0%##%.4 %4 KLL` ,4( 1#.')( (.74 %$' ./%5%4,# '%$) ,4( ()#)$)( "')/ +/.-%#)' %4KLMM<MKK X,1):..8 (%'+#,1)( !;O+,1) ,' $2) #),(%45 '.1%,# 4)$7./8 0),'"/)(
MM\< '-- '8"8-9-*8 3B .$><8+ "*% .-+63*+$G$0$8$-+ 6 X,1):..86 >+/< Kf6 KLMM62$$+gll777<-,1):..8<1.0l$)/0'<+2+<
MMh< '-- [%18 O"00)/'6 Q"0=$*> 8<- ;:G-AG-"8 6 =]P N >YUc ?P>O=6 >+/< jL6 KLL`62$$+gll777<$2)(,%#;:),'$<1.0l4)7'7))8lKLL`lLbljLl7,#8%45&$2)&1;:)/:),$<2$0#<
MM`< 7% <MKL< 7%( MKM< '-- Z)''%1, P< W,'1)##,/.6 P0%#; O$))# n D"'')## >(,0'6 ]-D+ ;3A6( '-00+ F:+6"4- B3A "
'3*> 6 i >UU O =< Z<6 Z"4< jL6 KLMM6 "#"$0"G0- "8 2$$+gll.4#%4)<7'A<1.0l,/$%1#)lO?MLLLMbKbLdK\L
KjLbdhbLLbd\fbMd`jKK\j\\LhdK<2$0#<MKK< '-- Z"#%,44) G)+%$.4) J TA$-*%+8-A 20"*+ 83 ]/=- 78+ 5+-A !"8" 6 R[[ !^[Pc H>+/< Kf6
KLMM6 Kgbh G!I6 2$$+gll0.4);<144<1.0lKLMMlLblKfl$)124.#.5;l-/%)4('$)/l%4()3<2$0<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 469/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"7!
:; "')/' ,4( +,5) 9%)7' %4 !,; KLLh<MKj X,1):..8C' 2,' , 0,/8)$ 9,#") .-,#0.'$ oMLL :%##%.4 :,')( .4 $/,(%45 %4 %$' '$.18 %4 +/%9,$) 0,/8)$'<MKb
^4) .- $2) 0,A./ :"'%4)'' /%'8' $2,$ X,1):..8 -,1)'s,4( , '."/1) .-1.4$%4"%45 1.4$/.9)/';s1.41)/4' 2.7 0"12 1.4$/.# %$ 5%9)' "')/' .9)/ $2)(%'')0%4,$%.4 .- +/%9,$) (,$,<MKd Y4(%9%(",# "')/' 1,4 -,1) ,(9)/') )--)1$'-/.0 (%'1#.'"/) 72%#) .$2)/ 0)0:)/' .- $2) X,1):..8 +#,$-./0s'"12 ,',(9)/$%')/' ,4( ,++#%1,$%.4 ()9)#.+)/'s:)4)-%$ -/.0 5/),$)/ ,11)'' $. (,$,<Y$' 5.9)/4,41) /"#)' 1.41)/4%45 +/%9,1;&/)#,$)( 4)5,$%9) )3$)/4,#%$%)'6 ,4( %$'12.%1)' /)#,$%9) $. 4)7 1.0+)$%$./' #%8) S..5#)z6 ,/) #%8)#; $. :) %0+./$,4$-./ '$/%8%45 $2) .+$%0,# :,#,41) :)$7))4 $2) 1.0+)$%45 %4$)/)'$' .- 0)0:)/'.- %$' 1.00"4%$;<MKf
#"
O =^R_ PaR]>[SPO
!.()/4 '$.18 )312,45)'s72%12 2,9) ()$,%#)( /"#)' ,4( /)5"#,$%.4' $2,$,/) ()'%54)( $. )4'"/) $2) %4$)5/%$; .- $2)%/ 0,/8)$'s+/.9%() ,4.$2)/)3,0+#) .- 2.7 1.00"4%$%)' 5.9)/4 4)5,$%9) )3$)/4,#%$%)'< >' .:')/9)/'4.$)6 Bu'v$.18 )312,45)' ,/."4( $2) 7./#( %49)'$ 1.4'%()/,:#) 0,4+.7)/6$)124.#.5%1,# )--./$ ,4( -%4,41%,# /)'."/1)' $. 1"/: 0,/8)$ 0,4%+"#,$%.4 ,4($. +/.0.$) 0,/8)$ )--%1%)41; ,4( %4$)5/%$;<EMK\ =2); %0+.') /"#)' 1.41)/4%450,/8)$ 0,4%+"#,$%.4s(.%45 $2%45' $. ,/$%-%1%,##; ,--)1$ 0,/8)$ '%54,#' '"12,' (%'1#.'%45 -,#') %4-./0,$%.4 ./ 1/),$%45 , -,#') %0+/)''%.4 .- $/,(%45,1$%9%$;< =2); ,#'. %0+.') /"#)' 1.41)/4%45 %4'%()/ $/,(%45s"'%45 0,$)/%,#4.4&+":#%1 %4-./0,$%.4< [,'(,F6 -./ )3,0+#)6 2,' ()$,%#)( /"#)' B/)5,/(%45
MKj< '-- R,/.#%4) !1R,/$2;6 T"4-G33= H#-A8"=-+ F:'6"4- L03G"00: 6 eN[P= HZ"4) Kj6 KLLh6`gMj >!I6 2$$+gll777<@(4)$<1.0l4)7'l-,1):..8&.9)/$,8)'&0;'+,1)&5#.:,##;lKL\\Kb<
MKb< '-- U)) O+),/' n !.2,00)( ],(%6 T"4-G33=X+ 7960$-% R"0/- '0$6+ 83 cdb U$00$3* $*2A$#"8- F"A=-8 CA"%$*> 6 ?U^^!?PDS6 X):< Mf6 KLMK6 2$$+gll777<:#..0:)/5<1.0l4)7'lKLMK&LK&Mfl-,1):..8&'&%0+#%)(&9,#")&'#%+'&$.&`h&:%##%.4&%4&+/%9,$)&0,/8)$&$/,(%45<2$0#<
MKd< X./ , #%$,4; .- 1.4$/.9)/'%)' '"//."4( X,1):..86 +-- ;A$8$4$+9 3B T"4-G33=6 i Y_GPNY>6 2$$+gll)4<7%8%+)(%,<./5l7%8%lR/%$%1%'0r.-rX,1):..8 H#,'$ 9%'%$)( !,/< M6 KLMKI<
MKf< =2)/) %' +)/2,+' 4. :)$$)/ ,4$%(.$) $. +/.-)''%.4,# +/.54.'$%1,$%.4 $2,4 $2) 2%'$./;.- '.1%,# 4)$7./8'< X/%)4('$)/ 7,' , 2%52#; +/,%')( %4$)/4)$ :"'%4)'' -./ 0"12 .- KLLj :)-./))9.#9%45 %4$. , -,0."' 1,') '$"(; .- :"'%4)'' 0%'$,8)'< '-- ?.;(6 +/6A" 4.$) f\T !%8.#,A Z,4G%'8./'8% n R,/%4&Y',:)# _4..+6 TA$-*%+8-A e@f H],/9,/( ?"'%4)'' O12..#6 G,+)/ [.< `&\L\&bL`6 KLL\I< !;O+,1) 7,' $2)4 #,"()( -./ %$' :/%##%,4$ )--./$6 %4 +,/$ :,')( .4 %$' 7%##%454)''$. #)$ ,4;.4) (. ,4;$2%45 .4 %$' '%$)6 %4 (%'+#,1%45 X/%)4('$)/< R.00)4$,$./' $2."52$ $2,$ %$2,( B7.4E $2) /,1) -./ (.0%4,41) %4 '.1%,# 4)$7./8%45< '-- !,/1 S"4$2)/ J ]-D+ ;3A6(e<-"A8+f F:'6"4- 6 R[[!^[Pc 6 !,/< K`6 KLLf6 2$$+gll0.4);<144<1.0lKLLflLjlKhl$)124.#.5;l+#"55)(%4 $ -./$"4)l< Y$ /)0,%4' $. :) '))4 72)$2)/ X,1):..8 7%## 0,8) $2) './$'.- 0%'$,8)' %4 :,#,41%45 $2) %4$)/)'$' .- %$' 1.00"4%$;s%4 +,/$%1"#,/ A"55#%45 4)5,$%9) ,4(+.'%$%9) )3$)/4,#%$%)' $2,$ "+)4()( %$' +/)()1)''./' ./ 0,4; .$2)/ +.''%:#) :"'%4)'' 0%'$,8)'
$2,$ 1."#( /)9)/') %$' 5/.7$2<MK\< '-- N."5#,' R"00%456 O.-%, Z.2,4 n N,4 U%6 )K4<"*>- CA"%$*> ./0-+ "*% '834=
F"A=-8 O$\/$%$8: 6 `` Z< ^X XY[< PR^[< fdM HKLMMI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 470/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"7" ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
7,'2 $/,()'6 +/)&,//,45)( $/,(%456 -%1$%$%."' ./()/'6 5%9%45 "+ +/%./%$;612"/4%456 -/.4$&/"44%456 ,4( , 9,/%)$; .- .$2)/ $;+)' .- +/,1$%1)'<EMKh Y4,((%$%.4 $. 0,/8)$ 0,4%+"#,$%.4 /"#)'6 )312,45)' 2,9) /"#)' -./ :"'%4)''(),#%45' ,0.45 0)0:)/' %41#"(%45 /"#)' ,:."$ +,;0)4$ ,4( ()#%9)/;<MK` P312,45)' )4-./1) $2)') /"#)' %4 , 9,/%)$; .- 7,;' %41#"(%45 )3+)##%450)0:)/' -./ 9%.#,$%45 $2)0<MjL
i2%#) 0.()/4 '$.18 )312,45)' ,/) '":A)1$ $. 5.9)/40)4$ #,7' ,4(/)5"#,$%.46 0.()/4 )312,45)' ,(.+$ ,4( )4-./1) $2)%/ .74 /"#)' ,' 7)##<MjM Y4$2) V4%$)( O$,$)'6 -./ )3,0+#)6 )312,45)' ()'%54 $2)%/ .74 /"#)'< >#$2."52$2) O)1"/%$%)' ,4( P312,45) R.00%''%.4 HBOPREI ,++/.9)' /"#)' 5.9)/4%45V<O< )312,45)'6 $2) OPR (.)' 4.$ (%1$,$) $2) /"#)'<MjK Y4 -,1$6 , 1/%$%1,# -),$"/)
%4 $2) ()9)#.+0)4$ .- '$.18 )312,45)' %4 $2) )%52$))4$2 1)4$"/; 7,' $2),:%#%$; $. )31#"() "')/' -./ :,( :)2,9%./ ,' $2) ),/#; 2%'$./; .- $2) U.4(.4O$.18 P312,45)s()'1/%:)( :)#.7s()0.4'$/,$)'< Y4())(6 +/%9,$) 1.4$/.#.9)/ 4)5,$%9) )3$)/4,#%$%)' ,0.45 $/,()/' 7,' 1/%$%1,# $. $2) )0)/5)41) .- $2)0.()/4 '$.18 )312,45)<
=2) ')1"/%$%)' 0,/8)$ %4 U.4(.4 .+)/,$)( %4-./0,##; -./ , 1."+#) .-2"4(/)( ;),/'<Mjj O)1"/%$%)' 7)/) $/,()( :%#,$)/,##; ,' -,/ :,18 ,' $2) '%3$))4$21)4$"/;<Mjb Y$ 7,' 1.49)4%)4$ -./ $/,()/' $. 2,9) +#,1)' $. 1.45/)5,$)< =2);%4%$%,##; (%( '. ,$ $2) D.;,# P312,45)6 72)/) 1.00.(%$%)' 7)/) $/,()(< >-$)/:)%45 )A)1$)( -./ 1/.7(%45 $2) )312,45)6 $/,()/' ,55/)5,$)( $2)0')#9)' %4'.0) .- $2) 1.--)) 2."')'s'"12 ,' Z.4,$2,4C' R.--)) ]."')s%4 $2)4),/:; P312,45) >##);<Mjd
MKh< '-- $%( ,$ fdK<MK`< [cOP P4-./1)0)4$6 [cOP6 2$$+gll/"#)'<4;')<1.0l[cOPlD"#)'l H#,'$ 9%'%$)(
>"5< M6 KLMMI<MjL< X./ $2) /"#)' 5.9)/4%45 [cOP )4-./1)0)4$ ,1$%.4'6 +-- N%'1%+#%4,/; D"#)' HD"#)'
b\dm\\I6 [cOP6 2$$+gll/"#)'<4;')<1.0l4;')$..#'lG#,$-./0W%)7)/<,'+pO)#)1$)([.()q12+ rMr\n0,4",#ql4;')l/"#)'l4;')&/"#)'l< X./ , #%'$ .- (%'1%+#%4,/; ,1$%.4' :; $2) [cOP6 +-- 2$$+gll777<4;')<1.0lN%'1>34l(%'1>34Y4()3<2$0#<
MjM< '-- Z.24 R,/'.46 '-0B .->/0"8$3* $* '-4/A$8$-+ F"A=-8+? 7*8-A*"8$3*"0 CA-*%+ "*% ]-D!$A-48$3*+ "B8-A 8<- T$*"*4$"0 ;A$+$+ 6 R^!GUY>a R^[OVU=Y[S6 Y[R <6 !,/< KLL`62$$+gll1.0+#%,3<1.0l,++l(.74#.,(lM\`MKKhdLblO)#-&D)5"#,$%.4z%4zO)1"/%$%)'z!,/8)$'<+(-<
MjK< '-- Md V<O<R< t \h'H:IHMI HKLMLI H'$,$"$) )0+.7)/%45 ')#-&/)5"#,$./; ./5,4%@,$%.4'6%41#"(%45 )312,45)'6 $. 0,8) $2)%/ .74 /"#)'6 '":A)1$ $. ,++/.9,# :; $2) OPRIT OPR D)#),')jb&dLf``6 G,/$ Y<>6 [.9< Mh6 KLLb6 "#"$0"G0- "8 2$$+gll777<')1<5.9l/"#)'l+/.+.')(ljb&dLf``<2$0 H:,185/."4( %4-./0,$%.4 .4 $2) ')#-&/)5"#,$%.4 .- )312,45)'6 %4 $2) 1.4$)3$ .- ,+/.+.')( /"#) $. '$/)45$2)4 )312,45) 5.9)/4,41)I<
Mjj< '-- D >[>UN !YR]YP6 =]P U^[N^[ O =^R_ PaR]>[SPg > ]YO=^Dc Md HM```I<
Mjb< 7%(Mjd< '-- P(7,/( O$/%452,06 =2) P0)/5)41) .- $2) U.4(.4 O$.18 P312,45) ,' , O)#-&
G.#%1%45 R#":6 M\HKI Z< GDYW>=P< P[=PDGDYOP M6 bmf HKLLKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 471/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"77
Y4 $2) ),/#; (,;' .- $2) U.4(.4 O$.18 P312,45)6 $/,()/' -,1)( $2)+/.:#)0 .- )4'"/%45 $2,$ )312,45) +,/$4)/' 7."#( 2.4./ ,5/))0)4$' $.1.0+#)$) :"; ,4( ',#) ./()/' 72)4 $2); 1,0) (")< =2) ?,/4,/(' >1$6 +,'')(%4 M\jb6 ()1#,/)( $%0)&:,')( :,/5,%4' , -./0 .- 5,0:#%45 -./ 72%12 %$ 7,'4.$ +.''%:#) $. )4-./1) 1.4$/,1$'<Mjf ?)1,"') $/,()/' 1."#( 4.$ /)#; .41.4$/,1$'6 Bu%v$ 7,' < < < #)-$ $. $2) 0,/8)$ +,/$%1%+,4$' $2)0')#9)' $. 1/),$) ,1.() .- 1.4("1$ $2,$ )4-./1)( $2) 1.4(%$%.4' 4)1)'',/; -./ $/,()< P9)4
7%$2."$ $2) #)5,# %0+)(%0)4$' < < < $2.') 72. +,/$%1%+,$)( ,1$%9)#; %4 $2)0,/8)$ 7."#( '))8 $. -%4( , '.#"$%.4 $. $2)%/ .74 +/.:#)0' ,0.45$2)0')#9)'<EMj\ Y4 $2) 0%( )%52$))4$2 1)4$"/;6 ')9)/,# 5/."+' .- $/,()/' %4-%4,41%,# %4'$/"0)4$'s%41#"(%45 :,48)/' ,4( 0,/%4) "4()/7/%$)/'s
./5,4%@)( $2)0')#9)' %4$. )31#"'%9) ,''.1%,$%.4' %4 72%12 0)0:)/' 72. 9%.#,$)( $2) '$,$)( ./ "4'$,$)( /"#)' .- $2) ,''.1%,$%.4 1."#( :) )A)1$)(<Mjh
> 5/."+ .- '$.18:/.8)/'6 72. 2,( .+)/,$)( ,4 %4-./0,# 0,/8)$ ,$ Z.4,$2,4C' R.--)) ]."')6 $/%)( $. (. $2) ',0) %4 M\fM< >11./(%45 $. .4)1.4$)0+./,/; '."/1)6 B=2) 5)4$#)0)4 ,$ $2%' 9)/; +)/%.( .- $%0) < < < < 2,9)$,8)4 %$ %4$. $2)%/ 2),(' $2,$ '.0) .- $2) -/,$)/4%$; ,/) 4.$ '. 5..( ,'$2)0')#9)' < < < < ,4( 2,9) )4$)/)( %4$. ,4 ,''.1%,$%.4 $. )31#"() $2)0 -/.0
Z&&&&&C' 1.--))&2."')<EMj`
=2); +,%( $2) 1.--)) 2."') -./ $2) /%52$ $. "') $2) +/)0%')' )31#"'%9)#;-./ $2/)) 2."/' , (,;<MbL >' /)F"%/)( :; $2,$ ,5/))0)4$6 $2) 0,'$)/ .- $2)1.--)) 2."')6 , !/< X)/)'6 ,++,/)4$#; )A)1$)( , !/< D)4."3 72. $2)4 '")(-./ ,'',"#$<MbM >11./(%45 $. $2) O3*%3* ;<A3*$40- 6 .4 Z"4) `6 M\fKg
Y$ :)%45 +/.9)( ,$ $2) $/%,# $2,$ $2,$ 2."') 2,( :))4 , 0,/8)$ H$%0)
."$ .- 0%4(I -./ :";%45 ,4( ')##%45 5.9)/40)4$ ')1"/%$%)'6 $2) Z"/;:/."52$ %4 $2)%/ 9)/(%1$ -./ $2) +#,%4$%--6 7%$2 .4) '2%##%45 (,0,5)T:; 72%12 0),4' Z.4,$2,4C' R.--))&2."') %' 4.7 , -/)) ,4( .+)40,/8)$6 ,4( ,## 1.0:%4,$%.4' $2)/) ()'$/.;)(<MbK
Y4 M\\K6 , 5/."+ .- U.4(.4 '$.18:/.8)/' $..8 ,4.$2)/ ,++/.,12$.7,/(' 1/),$%45 ,4 )31#"'%9) $/,(%45 '.1%)$;< =2); -"4()( $2) 1.4'$/"1$%.4.- , 4)7 :"%#(%456 $2) O$.18 P312,45)6 -./ $/,(%45<Mbj S%9)4 $2) +/)9%."'
Mjf< !YR]YP J +/6A" 4.$) Mjj6 ,$ jM<Mj\< 7%(Mjh< 7%( Mj`< '-- R< X< O0%$26 C<- )"A0: V$+83A: 3B 8<- O3*%3* '834= )K4<"*>- 6 M` >!PD < PR^[< D PW (
KLf6 KMd HM`K`I HF".$%45 =< !^D=Y!PD 6 P WPDc ! >[ ]YO ̂i[ ?D^_PD 6 3%9 HK( )(< M\fMII<MbL< '-- !YR]YP6 +/6A" 4.$) Mjj6 ,$ jM<MbM< '-- Z,0)' ^#(2,06 O"D .-63A8$*> $* 8<- O3*%3* ]-D+6"6-A+J ghijSghbj 6 jM >!< Z<
UPS>U ]YO=< M\\6 Mhdmhf HM`h\I( MbK< 7%( ,$ Mhf<Mbj< '-- !YR]YP6 +/6A" 4.$) Mjj<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 472/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"7L ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
#)5,# /)'"#$6 $2); 0,() ,(0%''%.4 .+)4 -./ , (,%#; -))<Mbb ?; $2) #,$) M\`L'6 7%$2 $2) 5/.7$2 %4 ')1"/%$%)' 0,/8)$'6 $2) 5.9)/4%45 1.00%$$)) .- $2) O$.18P312,45) -."4( $2,$ $2); (%( 4.$ 2,9) )4."52 +.7)/ $. )4-./1) (%'1%+#%4),4( -,1)( (%--%1"#$%)' %4 -"4(%45 $2) ,(0%4%'$/,$%.4 .- $2) )312,45)< =2).74)/' .- $2) O$.18 P312,45) ()1%()( %4 Z,4",/; MhLM $. 1.49)/$ $2) .+)4)312,45) %4$. , 1#.')( B'":'1/%+$%.4 /..0E -./ 72%12 0)0:)/' +,%( ,4,44",# -))<Mbd =2) U.4(.4 O$.18 P312,45) '$,/$)( .4 !,/12 j6 MhLM<Mbf
=2) 4)7 )312,45) ,(.+$)( /)5"#,$%.4' -./ 1.4("1$%45 :"'%4)''<Bu>v(2)/)41) $. $2)') /"#)' ,4( /)5"#,$%.4' 7,' 0.4%$./)( ,4( ,(A"(%1,$)(:; , 1.00%$$))6 %41#"(%45 -"##&$%0) ,(0%4%'$/,$%9) '$,--6 ,4( )4-./1)( :; $2)$2/),$ .- )3+"#'%.4 -/.0 $2) 0,/8)$<EMb\ !.'$ .- $2) /)5"#,$%.4' -.1"')( .4
1/),$%45 $/"'$ ,0.45 0)0:)/'6 +,/$%1"#,/#; %49.#9%45 +,;0)4$ ,4( ()#%9)/;< >' , #,$) 4%4)$))4$2 1)4$"/; $/),$%') +"$ %$g
u=2) U.4(.4 O$.18 P312,45)C'v 0,%4 .:A)1$' ,++),/ $. :) $2) ),';,4( )3+)(%$%."' $/,4',1$%.4 .- :"'%4)''6 ,4( $2) )4-./1)0)4$ .--,%/ (),#%45 ,0.45 %$' 0)0:)/'< =. $2)') )4(' < < < , ')$ .- /)'"#$'-./0)( -./ $2) ,(0%''%.4 ,4( )3+"#'%.4 .- 0)0:)/'6 ,4( -./ $2)1.4$/.# .- $2)%/ 1.4("1$ :.$2 :)$7))4 $2)0')#9)' ,4( $.7,/(' $2)+":#%1<Mbh
=2) U.4(.4 O$.18 P312,45) 7,' ,#'. 1.41)/4)( 7%$2 #%0%$%45 4)5,$%9))3$)/4,#%$%)' $2,$ 0)0:)/' 1."#( %0+.') .4 ),12 .$2)/ $2/."52 0,/8)$0,4%+"#,$%.4 ./ ,';00)$/%1 %4-./0,$%.4< i/%$%45 ,:."$ )9)4$' %4 M`bj6 .4)2%'$./%,4 .:')/9)'6 Bu.v4) .- $2) 0,%4 -"41$%.4' .- $2) O$.18 P312,45) 7,'$. )4'"/) , #)9)# +#,;%45 -%)#( -./ ,## %$' 0)0:)/' %4 $)/0' .- )F",# ,11)'' $.
%4-./0,$%.4< R.4')F")4$#; < < < %$ $/%)( $. )4'"/) $2,$ +/%1)&')4'%$%9)%4-./0,$%.46 '"12 ,' 1.0+,4; /)'"#$'6 7)/) /)#),')( '%0"#$,4)."'#; $. ,##<EMb` =2) P312,45) ,#'. B$/),$)( 9)/; ')/%."'#; ,4; 0,$$)/ .- %4'%()/ $/,(%456 72)$2)/ ,11%()4$,# ./ ()#%:)/,$)<EMdL Y4 M`bj6 %$ )3+)##)( .4) 0)0:)/ 72./)1)%9)( $%+' -/.0 , A."/4,#%'$ .4 2%' '$.18 /)1.00)4(,$%.4'<MdM Y$ ,#'.
7,/4)( 0)0:)/' ,:."$ (.%45 :"'%4)'' 7%$2 4.4&0)0:)/' 72. /,%')(
Mbb< 7%( Mbd< 7%( ,$ jd<Mbf< 7% < Mb\< 7% <Mbh< '-- D VN^UG] P cDP !PUO]PY!PD n i >U=PD U >VDP[RP6 =]P U >i >[N
RVO=^!O ^X =]P U^[N^[ O =^R_ PaR]>[SP M H[,:" Mh\`I<
Mb`< !YR]YP6 +/6A" 4.$) Mjj6 ,$ K`bm`d<MdL< 7%( ,$ K`d<MdM< 7%(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 473/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"7%
%4'%()/&$/,(%45 1.41)/4'< >$ #),'$ ,$ $2%' $%0)6 $2) 5.9)/40)4$ 2,( 4. %4$)/)'$%4 ."$#,7%45 %4'%()/ $/,(%45<MdK
O$.18 )312,45)'s#%8) .$2)/ +#,$-./0's2,9) %41)4$%9)' $. (),# 7%$24)5,$%9) )3$)/4,#%$%)' ,0.45 $2)%/ 0)0:)/' ,4( $. 0,%4$,%4 $2) /)+"$,$%.4 .-$2) )312,45) 7%$2 $2) +":#%1< =2,$ (.)' 4.$ 4)1)'',/%#; 0),4 $2,$ $2); 2,9),(.+$)( $2) '.1%,##; .+$%0,# 5.9)/4,41) '$/"1$"/)< >4( 5.9)/40)4$'6)'+)1%,##; ,-$)/ $2) S/),$ N)+/)''%.46 2,9) %0+.')( /)5"#,$%.4' .4 '$.18)312,45)' ,4( ,#'. .9)/')) $2) /"#)' $2)') )312,45)' ,(.+$ $2)0')#9)'<
=2)/) %' , #.45&'$,4(%45 ():,$) .4 $2) )--%1,1; .- 5.9)/40)4$ /)5"#,$%.4$2,$ %' :);.4( $2) '1.+) .- $2%' >/$%1#)<Mdj =2) ,4,#;'%' .- 5.9)/4,41)0)12,4%'0' -./ 0"#$%&'%()( +#,$-./0' %4(%1,$)'6 2.7)9)/6 $2,$ '$.18
)312,45)' 2,9) %41)4$%9)' $. ,(.+$ /"#)' ,4( /)5"#,$%.4' $. 0,3%0%@) $2) 9,#") .- $2) +#,$-./0 ,4( $. (. '. %4 +,/$ :; 0%$%5,$%45 4)5,$%9) )3$)/4,#%$%)',0.45 $2)%/ 0)0:)/'< =2) ,4,#;'%' .- 5.9)/40)4$ %4$)/9)4$%.4 %4 ')1"/%$%)'0,/8)$' '2."#( 1.4'%()/ 72)$2)/ $2) 5.9)/40)4$ 1."#( +/.9%() $..#' $2,$
7."#( 2)#+ +/%9,$) )4-./1)0)4$6 72)$2)/ $2)/) ,/) ,'+)1$' .- +/%9,$)/)5"#,$%.4 $2,$ 1."#( :) (.4) 0./) )--%1%)4$#; :; $2) 5.9)/40)4$6 ,4(
72)$2)/ $2)/) ,/) ()9%,$%.4' :)$7))4 +/%9,$) ,4( +":#%1 %41)4$%9)' -./0,3%0%@%45 $2) 9,#") .- $2) +#,$-./0<
%" OP>DR] P[SY[PO
O),/12 )45%4)' ,#'. +/.9%() , 1#),/ )3,0+#) .- 2.7 0"#$%&'%()( +#,$-./0'+/%9,$)#; 5.9)/4 4)5,$%9) )3$)/4,#%$%)'s,4( %4 +,/$%1"#,/ 2.7 '),/12 )45%4)'/)5"#,$) $2) +/.:#)0 .- 1.0+,4%)' 0,4%+"#,$%45 '),/12 /,48%45'< O$/.45-%4,41%,# %41)4$%9)' )3%'$ -./ 1.0+,4%)' $. /,48 ,' 2%52#; ,' +.''%:#) %4 '),/12)45%4) /)'"#$'< X./ )3,0+#)6 , 0)(%, 7):'%$) 0,8)' 0./) 0.4); %- %$ ,$$/,1$'0./) 9%)7)/' :)1,"') ,(9)/$%'%45 /)9)4") %' +/.+./$%.4,# $. 9%)7)/' ,4(:)1,"') $2) 7):'%$) 7%## ,$$/,1$ 0./) 9%)7)/' %- %$ /,48' 0./) 2%52#;<U%8)7%')6 ,4 )&1.00)/1) 7):'%$) 0,8)' 0./) 0.4); %- %$ ,$$/,1$' 0./)
9%)7)/'< ?)1,"') '.0) -/,1$%.4 .- 9%)7)/' 7%## :"; +/.("1$' ,4( ')/9%1)'-/.0 $2) 7):'%$)6 $2) 0./) 9%)7)/' $2) 7):'%$) 2,' $2) 0./) ',#)' %$ 7%##0,8)<
R.0+,4%)' $2,$ /"4 7):'%$)' 1,4 0,8) 0./) 0.4); %- $2); 1,4 "')84.7#)(5) .- , '),/12 )45%4)C' ,#5./%$20 $.s%4 )--)1$s$/%18 $2) '),/12
MdK< 7%( ,$ K`f<Mdj< X./ ,4 %0+./$,4$ 1.4$/%:"$%.4 $. $2) #%$)/,$"/)6 +-- D,-,)# U, G./$,6 X#./)41%.
U.+)@&()&O%#,4)' n >4(/)% O2#)%-)/6 Q<"8 Q3A=+ $* '-4/A$8$-+ O"D+MJ fM Z< ^X XY[< M HKLLfI<
=2); 1.41#"() -/.0 , '$"(; .- ')1"/%$%)' 0,/8)$' %4 -./$;&4%4) 1."4$/%)' $2,$ #,7' -,1%#%$,$%45+/%9,$) )4-./1)0)4$ $2/."52 (%'1#.'"/) ,4( #%,:%#%$; /"#)' :)4)-%$ '$.18 0,/8)$' ,4( $2,$+":#%1 )4-./1)0)4$ +#,;' , 0.()'$ /.#) ,$ :)'$< 7%( ,$ KL<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 474/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"7- ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
)45%4) %4$. $2%48%45 $2)%/ 7):'%$)' /,48 2%52)/ $2,4 $2); '2."#(< >11./(%45$. .4) '$"(;6 $2) $.+ '+.$ %4 , '),/12 /,48%45 5)$' 0./) $2,4 , $2%/( .- $2)1#%18' 1.0+,/)( $. ,:."$ ')9)4$))4 +)/1)4$ -./ $2) ')1.4( '+.$ ,4( $2/))+)/1)4$ -./ $2) $)4$2 '+.$<Mdb !./) 1#%18' /)'"#$' %4 0./) 9%)7)/'<
].7)9)/6 .++./$"4%'$%1 :)2,9%./ ,''.1%,$)( 7%$2 $2) 0,4%+"#,$%.4 .-'),/12 /)'"#$' %0+.')' '%54%-%1,4$ 1.'$' .4 "')/'< X%/'$6 "')/' /)1)%9) (%'$./$)(,4( %4,11"/,$) '),/12 /)'"#$'< O)1.4(6 '$/,$)5%)' $2,$ 0,4%+"#,$) '),/12/,48%45' ()5/,() $2) 9,#") .- '),/12 /)'"#$' '%41) "')/' 2,9) 4. 7,; .-84.7%45 72)$2)/ ,4; +,/$%1"#,/ '),/12 /)'"#$ %' $2) +/.("1$ .- , 0,4%+"#,$)(./ ,4 "40,4%+"#,$)( /,48%45< =2) '),/12 )45%4)' ()+#.; 1."4$)/'$/,$)5%)'s %41#"(%45 -/)F")4$ 12,45)' %4 $2) ,#5./%$20' ,' 7)## ,' 5.9)/4,41) /"#)'s$.
1."4$)/ )--./$' ,$ 0,4%+"#,$%45<Mdd
S..5#)C' .45.%45 )--./$' $. ()$)1$ ,4( +"4%'2 7):'%$)' $2,$ 0,4%+"#,$)
$2) S..5#) '),/12 ,#5./%$20 %##"'$/,$) $2) /.#) .- 5.9)/4,41) /"#)' -./ '),/12)45%4)'< S..5#) 2,' ()9)#.+)( , '.+2%'$%1,$)( 5.9)/4,41) ';'$)0 -./0%$%5,$%45 4)5,$%9) )3$)/4,#%$%)' -./ %$' +#,$-./0 1.00"4%$; .- "')/'6
7):'%$)'6 ,4( ,(9)/$%')/'< ].7)9)/6 %$ -,1)' '.0) (%--%1"#$ $/,().--'< Y$ 2,'()9)#.+)( 5"%()#%4)' $2,$ ()'1/%:) $2) 5..( ,1$%9%$%)' $2,$ %$ )41."/,5)'
7):'%$)' $. )45,5) %4 ,4( $2) :,( ,1$%9%$%)' $2,$ ,/) :,44)( :)1,"') $2);(%'$./$ $2) %4-./0,$%.4&9,#") .- /)'"#$'<Mdf Y$ +/.9%()' /)1.00)4(,$%.4' $.
7):0,'$)/' .4 5..( $)124%1,#6 ()'%546 ,4( 1.4$)4$ +/,1$%1)' $2,$ 7%## :)4)-%$ 7):'%$) "')/' ,4( ,#'. 2)#+ $2) 7):'%$) '%54,# $. $2) '),/12 ,#5./%$20 $2,$ %$%' , 2%52 F",#%$; ,4( /)#)9,4$ '%$)<Md\ =2%' %' ,4 )3,0+#) .- $/;%45 $. +/.0.$)+.'%$%9) )3$)/4,#%$%)'<
S..5#) ,#'. ()'1/%:)' ()1)+$%9) ,4( 0,4%+"#,$%9) +/,1$%1)' $2,$ 1."#(/)'"#$ %4 $2) %0+.'%$%.4 .- ',41$%.4' .4 $2) .--)4(%45 7):'%$)< Mdh =2) :,'%1+/%41%+#) %' $2,$ 7):'%$)' ,/) 4.$ '"++.')( $. (. $2%45' $2,$ ,/) ()'%54)( $.%4-#")41) $2) '),/12 )45%4) /)'"#$' ,' .++.')( $. +/.9%(%45 9,#") $. "')/'<S..5#) %()4$%-%)' '+)1%-%1 $)124%F")' $2,$ 7):'%$)' ,/) 4.$ '"++.')( $. "')6%41#"(%45 2,9%45 2%(()4 $)3$ ./ #%48'6 1#.,8%45 ./ '4),8; /)(%/)1$'6 #.,(%45+,5)' 7%$2 %//)#)9,4$ 8);7./('6 2,9%45 0"#$%+#) +,5)' 7%$2 '":'$,4$%,##; $2)',0) 1.4$)4$6 ,4( "'%45 (../7,; +,5)' $2,$ ,/) A"'$ 1/),$)( -./ '),/12
Mdb< N,4%)# D":;6 C<- R"0/- 3B L33>0- .-+/08 23+$8$3*$*> 6 Y[OYS]=O6 R]Y=Y_> H!,; Kd6KLMLI6 2$$+gll%4'%52$'<12%$%8,<1.0lKLMLl$2)&9,#")&.-&5..5#)&/)'"#$&+.'%$%.4%45<
Mdd< '-- Q-G9"+ 8 - A C33 0 + ? '-"A 4< )*> $* - H68 $9 $I"8 $ 3* e')Hf 6 S^^S UP 62$$+gll'"++./$<5..5#)<1.0l7):0,'$)/'l:%4l,4'7)/<+;p2#q)4n,4'7)/qjdK`Mn1$3q1:n'/1q1:n1:%(q0%d,:$"@,.%, H#,'$ 9%'%$)( >+/< M\6 KLMKI<
Mdf< '-- $%( Md\< '-- $%( Mdh< '-- $%(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 475/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"7J
)45%4)'<Md` =2) #%'$ %' 4.$ %4$)4()( $. :) )32,"'$%9)6 ,4( S..5#) 0,8)' %$1#),/ $2,$ %$ 7%## $,8) ,1$%.4 -./ ,4; )--./$ $. (%'$./$ '),/12 /)'"#$',/$%-%1%,##;<MfL
=2)') F",#%$; 5"%()#%4)' 1.9)/ $2) 0.'$ 1.00.4 -./0' .-()1)+$%9) ./ 0,4%+"#,$%9) :)2,9%./6 :"$ S..5#) 0,; /)'+.4(4)5,$%9)#; $. .$2)/ 0%'#),(%45 +/,1$%1)' 4.$ #%'$)( 2)/) H)<5< $/%18%45"')/' :; /)5%'$)/%45 0%''+)##%45' .- 7)##&84.74 7):'%$)'I< Y$C' 4.$',-) $. ,''"0) $2,$ A"'$ :)1,"') , '+)1%-%1 ()1)+$%9) $)124%F") %'4C$%41#"()( .4 $2%' +,5)6 S..5#) ,++/.9)' .- %$< i):0,'$)/' 72.'+)4( $2)%/ )4)/5%)' "+2.#(%45 $2) '+%/%$ .- $2) :,'%1 +/%41%+#)' 7%##+/.9%() , 0"12 :)$$)/ "')/ )3+)/%)41) ,4( '":')F")4$#; )4A.;:)$$)/ /,48%45 $2,4 $2.') 72. '+)4( $2)%/ $%0) #..8%45 -./
#..+2.#)' $2); 1,4 )3+#.%$<MfM
S..5#) 1,44.$ (%'1#.') $.. 0"12 ,:."$ 2.7 %$ ()$)1$' 9%.#,$%.4' :)1,"')$2,$ 7."#( )4,:#) 7):'%$)' $. 0,4%+"#,$) $2) ';'$)0<MfK
X./ )3,0+#)6 S..5#) %0+.')( ',41$%.4' .4 Z<R< G)44);s,4 >0)/%1,4()+,/$0)4$ '$./) 12,%4 $2,$ ,#'. ')##' 0)/12,4(%') .4#%4)s-./ 0,4%+"#,$%45'),/12 /)'"#$'< Y4 #,$) KLML6 $2) 1.0+,4; ,12%)9)( $2) $.+ '),/12 /)'"#$/,48%45' -./ 0,4; .- $2) +/.("1$' $2,$ %$ ')##' ,' , /)'"#$ .- , 2%52#;'"11)''-"# O),/12 P45%4) ^+$%0%@,$%.4 HBOP^EI '$/,$)5;<Mfj >4 OP^1.4'"#$,4$ -./ $2) 1.0+,4; %4')/$)( $)/0' -./ Z<R< G)44); +/.("1$' %4$2."',4(' .- 7):'%$)' ,#.45 7%$2 #%48' :,18 $. 777<A1+)44);<1.0<Mfb ?;(.%45 $2%'6 $2) OP^ 1.4'"#$,4$ -..#)( S..5#)C' '),/12 ,#5./%$20 %4$.$2%48%45 $2,$ 777<A1+)44);<1.0 7,' , 0./) /)#)9,4$ 7):'%$) -./ $2)
Md`< >11./(%45 $. S..5#)6 Bu(v../7,; +,5)' ,/) $;+%1,##; #,/5) ')$' .- +../&F",#%$;+,5)' 72)/) ),12 +,5) %' .+$%0%@)( -./ , '+)1%-%1 8);7./( ./ +2/,')< Y4 0,4; 1,')'6(../7,; +,5)' ,/) 7/%$$)4 $. /,48 -./ , +,/$%1"#,/ +2/,') ,4( $2)4 -"44)# "')/' $. , '%45#)()'$%4,$%.4<E Q-G9"+8-A C330+? ;03"=$*>J +*-"=: W"#"+4A$68 A-%$A-48+J "*% %33AD": 6">-+ 6 S^^SUP62$$+gll777<5..5#)<1.0l'"++./$l7):0,'$)/'l:%4l,4'7)/<+;p,4'7)/qffjdd H#,'$ 9%'%$)(!,/< M6 KLMKI<
MfL< '-- Q-G9"+8-A C330+? '-"A4< )*>$*- H68$9$I"8$3* 6 +/6A" 4.$) Mjj<MfM< '-- Q-G9"+8-A C330+? Q-G9"+8-A L/$%-0$*-+ 6 S^^SUP6 2$$+gll'"++./$<5..5#)<1.0l
7):0,'$)/'l:%4l,4'7)/<+;p2#q)4n,4'7)/qjd\f`n$.+%1qKj\LbM`n1$3q$.+%1 H#,'$ 9%'%$)(!,/< M`6 KLMKI<
MfK< =2) [)7 c./8 =%0)' F".$)' $2) )(%$./ .- $2) O),/12 P45%4) U,4( :#.56 72%121.9)/' $2) '),/12 %4("'$/;g B xS..5#) %' A"'$ 1,5); ,:."$ )9)/;$2%45<C =2,$6 2) ',%(6 %' :)1,"')$2) 1.0+,4; %' +)/+)$",##; 7.//%)( $2,$ $2) 0./) %$ /)9),#' ,:."$ $2) 9,"4$)( 0,$2)0,$%1,#,#5./%$20 %$ "')' $. (/%9) '),/12 /)'"#$'6 $2) 0./) +).+#) 7%## $/; $. 5,0) %$<E N,9%( O)5,#6 @U/00: T$*%+ " 2/06$8 3* 8<- Q-G 6 [<c< =Y!PO6 [.9< Kh6 KLML6 ,$ ?VM6 "#"$0"G0- "82$$+gll777<4;$%0)'<1.0lKLMLlMMlKhl:"'%4)''lKh:./8)/<2$0#p+,5)7,4$)(q,##< > '+,00)/'C-./"06 777<:#,182,$7./#(<1.06 )9)4 +/.9%()' $%+' -./ 5,0%45 $2) /"#)'<
Mfj< '-- N,9%( O)5,#6 C<- !$A8: O$880- '-4A-8+ 3B '-"A4< 6 [<c< =Y!PO6 X):< Mj6 KLMM6 ,$ ?VM6"#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLMMlLKlMjl:"'%4)''lMj'),/12<2$0#p+,5)7,4$)(q,##<
Mfb< 7%(
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 476/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"78 ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
%4')/$)( '),/12 $)/0' $2,4 %$ /),##; 7,'< i2)4 %$ -."4( ."$ ,:."$ Z<R<G)44);C' '$/,$)5;6 S..5#) %0+.')( , +)4,#$; .4 $2) 1.0+,4;< Y$ 0,4",##;/)("1)( $2) '),/12 /,48%45' -./ Z<R< G)44); -./ ,++/.3%0,$)#; `L (,;'<Mfd >', /)'"#$ .- $2) 0,4",# ,1$%.4 Z<R< G)44);C' /,48%45' -)##< X./ $2) '),/12 $)/0BO,0'.4%$) 1,//; .4 #"55,5)6E -./ %4'$,41)6 Z<R< G)44; -)## -/.0 $2) -%/'$ $.$2) ')9)4$;&-%/'$ '+.$<Mff S%9)4 $2) #.7 1#%18 /,$) ,-$)/ $2) $)4$2 '+.$ .4 $2)-%/'$ +,5)6 (.745/,(%45 Z<R< G)44); $. $2) ')9)4$;&-%/'$ '+.$ 2,( ,#0.'$ $2)',0) )--)1$ ,' )31#"(%45 %$ -/.0 $2,$ +,/$%1"#,/ '),/12 F")/; /)'"#$ ,#$.5)$2)/<
S..5#)C' 5.9)/4,41) ';'$)0 :,#,41)' $2) 9,#") .- +/.9%(%45 "')/' ,11)''$. 7):'%$)'6 )4'"/%45 $2) ,11"/,1; .- $2) /,48%45'6 ,4( ()$)//%45 7):'%$)'-/.0 0,4%+"#,$%45 $2) ';'$)0<Mf\ Y4 '.0) 1,')' %$ ,++),/' $2,$ S..5#)
'":A)1$' 7):'%$)' $. 0,4",# ,1$%.4' $2,$ /)("1) $2)%/ /,48%45' -./ '.0)+)/%.( .- $%0)<Mfh Y4 .$2)/ 1,')'s#%8) $2) 1,') .- Z<R< G)44);s7):'%$)' ,/)'":A)1$)( $. 0,4",# ,1$%.4' $2,$ /)("1) $2)%/ /,48%45' "4$%# $2); ,++#; -.//)1.4'%()/,$%.4< O$%## %4 .$2)/ 1,')' 7):'%$)' ,/) ()#%'$)( ,#$.5)$2)/6 ,#$2."52$2); 2,9) $2) +.''%:%#%$; .- ,++#;%45 -./ /)1.4'%()/,$%.4< X./ )3,0+#)6?!i<() 7,' ()#%'$)( %4 KLLf -./ "'%45 (../7,; +,5)'<Mf`
S..5#)C' 0,4",# +/.1)'' %49.#9)' $2) "') .- ,#5./%$20' $. ()$)1$+.''%:#) 9%.#,$%.4' ,' 7)## ,' 2"0,4 ()1%'%.4' .4 2.7 $. /)'+.4( ,4(
72)$2)/ $. /)1.4'%()/< >' $2) 7): 2,' )3+,4()(6 2.7)9)/6 %$ %' 4.$ -),'%:#)-./ S..5#) $. /)#; 0,%4#; .4 $2%' +/.1)'' $. )4'"/) $2) F",#%$; .- 7):'%$)/,48%45' ,4( 0%$%5,$) )3$)/4,#%$%)'< >' .- Z"4) KLMM6 0./) $2,4 jdL 0%##%.4
7):'%$)' )3%'$)( ,4( ,:."$ MdL6LLL 4)7 7):'%$)' ,++),/)( ),12 (,;<M\L R.4')F")4$#;6 S..5#) 0.(%-%)' %$' '),/12 ,#5./%$20 -/)F")4$#; :.$2 $.%0+/.9) %$' +)/-./0,41) ,4( $. 1."4$)/ )--./$' $. 5,0) $2) ,#5./%$20<R2,45)' %4 $2) ,#5./%$20 /)'"#$ %4 12,45)' %4 /,48%45' ,4( %4 '.0) 1,')'0,$)/%,# 12,45)' %4 /,48%45'< X./ )3,0+#)6 , 0,A./ 12,45) $. $2) ,#5./%$20%4 X):/",/; KLMM ,--)1$)( $2) F",#%$; '1./) H,4 )'$%0,$) .- $2) /)#)9,41) .- ,
Mfd< '-- !,$$ D.'.--6 L33>0- V"+ '8366-% 2/*$+<$*> W; 2-**-: 6 ?VO< Y[OYNPD 6 !,; Kd6 KLMM62$$+gll,/$%1#)'<:"'%4)''%4'%()/<1.0lKLMM&Ld&Kdl$)12ljLLM\`fd $ M $ +,4(,&5..5#)&A1&+)44);<
Mff< '-- O)5,#6 +/6A" 4.$) Mfj<Mf\< X./ -"/$2)/ (%'1"''%.4' .- +/,1$%1)' $2,$ S..5#) 2,' ,$$,18)(6 +-- ?,//; O127,/$@6
L33>0- R3D+ .-*-D-% O33= @8 ;03"=$*> $* `agg6 OP>DR] P[SY[P U >[N6 N)1< Kh6 KLML62$$+gll'),/12)45%4)#,4(<1.0l5..5#)&9.7'&$.&#..8&,$&()1)+$%9)&1#.,8%45&$)124%F")'&d`hLK<
Mfh< '-- !%$12 X."/4%)/6 Q<"8 " L33>0- 2-*"08: O33=+ O$=-J !Y=R] X^VD[YPD HZ"#; KM6KLMMI6 2$$+gll0%$12-."/4%)/<1.0lKLMMlL\lKMl72,$&,&5..5#)&+)4,#$;&#..8'&#%8)<
Mf`< '-- =.0 P'+%4)/6 L33>0- U0"4=0$+8+ UFQ(%- 6 R[P= [PiO HX):< f6 KLLf6 fgdh >!I62$$+gll4)7'<14)$<1.0lS..5#)&:#,18#%'$'&?!i<()lKMLL&MLKb $ j&fLjdbMK<2$0#p$,5q1.4$)4$
!,%4T1.4$)4$?.(;TM4<M\L< '-- Z"#%) ^CN)##6 V3D U$> 7+ C<- Q-G 1 V3D T"+8 7+ 78 LA3D$*>M 6 ! >O]>?UP HZ"4< M`6
KLMMI6 2$$+gll0,'2,:#)<1.0lKLMMlLflM`l2.7&0,4;&7):'%$)'l{M\M``].7&?%5&Y'&$2)&i):<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 477/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"7M
7):'%$) $. , 8);7./(I .- MM<h +)/1)4$ .- $2) F")/%)' $2,$ S..5#) /)1)%9)(<M\M >' , 1/.'' 12)18 .4 $2) 12,45)' $. $2) ,#5./%$206 S..5#) #..8)( ,$ 72)$2)/%$' 12,45)' 2,( ()$)1$)( 7):'%$)' $2,$ "')/' H:,')( .4 R2/.0) :/.7')/"')/'I 2,( 12.')4 $. :#.18< =2) 12,45)' )#%0%4,$)( )%52$;&-."/ +)/1)4$ .-$2) ')9)/,# (.@)4 0.'$&:#.18)( (.0,%4'<M\K
R2,45)' %4 $2) ,#5./%$20 ,/)s%4 $2) '2./$ /"4s, @)/.&'"0 5,0) -./ 7):'%$)'< O.0) 7):'%$)' /%') %4 $2) /,48%45' 72%#) .$2)/' -,##< =2.') $2,$ /%')%4 $2) /,48%45' F"%)$#; 1)#):/,$) 72%#) '.0) .- $2.') 72. -,## 1.0+#,%4#."(#;< =2.') 72. 1.0+#,%4 (. 4.$ 4)1)'',/%#; 2,9) '$/.45 5/."4('< X./%4'$,41)6 '.0) .- $2) 7):'%$)' $2,$ -,## %4 $2) /,48%45' (. '. :)1,"') $2);2,9) $/%)( $. 0,4%+"#,$) $2) ,#5./%$20 ,4( 2,9) :))4 +)4,#%@)( :; S..5#) ,'
, 1.4')F")41)< ^$2)/ 7):'%$)' -,## %4 $2) /,48%45' ,' 1.##,$)/,# (,0,5) -/.0$2) ,$$)0+$' :; '.0) 7):'%$)' $. ,/$%-%1%,##; %4-#,$) $2)%/ /,48%45'< Y4 (),#%45
7%$2 ,$$)0+$' $. 0,4%+"#,$) '),/12 /,48%45'6 S..5#) %' -./1)( $. /)+),$)(#;12,45) %$' ,#5./%$20 %4 7,;' $2,$ 0,; 1/),$) "41)/$,%4$; )9)4 -./ 7):'%$)'$2,$ +#,; :; $2) /"#)'< Y4 .$2)/ 7./('6 %- ,## 7):'%$)' +#,;)( :; $2) /"#)' $2);
7."#( ,## 2,9) 5/),$)/ 1)/$,%4$; ,:."$ $2) /,48%45 ,#5./%$20<
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s2)/) S..5#)s %' ,:#) $. +/.9%()<
>#$2."52 S..5#)C' +/%9,$) 5.9)/4,41) /)5%0) 0,; :) :)4)-%1%,#6 %$ %',#'. 1.4$/.9)/'%,#< >' , /)'"#$ .- 12,45)' %4 S..5#)C' /,48%45'6 ')9)/,#
M\M< '-- T$*%$*> F3A- V$><E\/"0$8: '$8-+ $* '-"A4< 6 =]P ^XXYRY>U S^^SUP ?U^S HX):< Kb6KLMM6 fgdL G!I6 2$$+gll5..5#):#.5<:#.5'+.$<1.0lKLMMlLKl-%4(%45&0./)&2%52&F",#%$;&'%$)'&%4<2$0#<
M\K< =2) 12,45)' %4 +,/$ %41/),')( $2) ()$)1$%.4 .- B'1/,+)/ '%$)'E ,4( B1.4$)4$ -,/0'E$2,$ +/)')4$ '2,##.7 ./ #.7 F",#%$; 1.4$)4$ :;6 -./ )3,0+#)6 '%0+#; 1.+;%45 '4%++)$' -/.0 7):'%$)' $2,$ +/)')4$ $2) ./%5%4,# 1.4$)4$< '-- N,44; O"##%9,46 L33>0- T3A-403+-+ H* ;3*8-*8
T"A9+ D$8< Y2"*%"Z @0>3A$8<9 56%"8- 6 OP>DR] P[SY[P U >[N HX):< Kb6 KLMMI62$$+gll'),/12)45%4)#,4(<1.0l5..5#)&-./)1#.')'&.4&1.4$)4$&-,/0'&7%$2&-,/0)/&,#5./%$20&"+(,$)&ffL\M<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 478/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"L# ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
1.0+,4%)' 2,9) -%#)( ,4$%$/"'$ '"%$' ,5,%4'$ S..5#) -./ ,##)5)(#; )45,5%45 %4)31#"'%.4,/; +/,1$%1)' ./ 2,9) )41."/,5)( 5.9)/40)4$' $. %4%$%,$) ,4$%$/"'$%49)'$%5,$%.4'<M\j =2)/) 2,9) ,#'. :))4 1,##' -./ 5.9)/40)4$ '),/12 4)"$/,#%$;/)5"#,$%.4M\b "4()/ 72%12 '),/12 )45%4)' #%8) S..5#) 7."#( -,1) #)5,#1.4'$/,%4$' .4 ,(A"'$%45 /)'"#$' ./ +)4,#%@%45 7):'%$)'< =2%' $.+%1 %',((/)'')( -"/$2)/ %4 $2) 4)3$ G,/$6 72%12 #..8' ,$ $2) (%'$%41$%.4 :)$7))4)--./$' $. "') )31#"'%.4 $. +.#%1) 4)5,$%9) )3$)/4,#%$%)' ,4( )--./$' $. "'))31#"'%.4 $. /)'$/%1$ 1.0+)$%$%.4<
'=I 9<='(2& '*I 9@,3=C ;1'&<)()C& =) 2>&<&;@3(2=1) 1A ,(0 ,&>('=1< 1) 93(2A1<:*
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d
M\j< '-- =/,()R.0)$<1.0 UUR 9< S..5#)6 Y41<6 f`j X< O"++< K( j\L HO<N<[<c< KLMLITG)/'.4 9< S..5#)6 Y41<6 [.< R Lf&\K`\6 KLL\ iU MhjMMMM H[<N< R,#< Z"4) Kd6 KLL\IT_%4()/O$,/$<1.0 9< S..5#)6 Y41<6 [.< R Lf&KLd\6 KLL\ iU hjMhLf H[<N< R,#< !,/< Mf6KLL\IT S..5#)6 Y41< 9< !;=/%55)/'<1.06 Y41<6 [.< L`RW]ML&Mbhjf HX/,48#%4 R4$;< R$< .-R.00.4 G#),'6 ^2%.6 >"5< jM6 KLMMIT U). R.4(/.7%1@6 C<- )(5( 2A3G-? 7+ L33>0- .$>>$*> 78+'-"A4< .-+/08+M 6 =Y!P HN)1< K6 KLMLI6 2$$+gll777<$%0)<1.0l$%0)l:"'%4)''l,/$%1#)lL6hd``6KLjbMjh6LL<2$0#T !%5")# ])#-$6 O"D+/$8 '":+ L33>0- Q"+ 5*B"$A 83 .$#"0 '$8- 6 [<c< =Y!PO6 X):< M\6 KLL`6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLL`lLKlMhl$)124.#.5;l%4$)/4)$lMh5..5#)<2$0#T R#,%/) R,%4 !%##)/6 C-K"+ 2A3G-+ L33>0- 3* ."*=$*> 3B '-"A4< .-+/08+J [<c< =Y!PO6 O)+$< b6 KLML6 ,$ ?j6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLMLlL`lLbl$)124.#.5;lLb5..5#)<2$0#p,(344#qMn,(344#3qMjMbMMjbh\&bO-8^LWlO"X3[-1D!(]8:kT;396"*$-+ @+= )5 ;399$++$3* 83 '8-6 $* 3* L33>0- '-"A4< ."*=$*> ;3960"$*8J Y=GD^G^D=>U HX):< Kb6 KLMLI6 2$$+gll777<%$+/.+./$,#<1.0lKLMLlLKlKbl1.0+,4%)'&,'8&)"&1.00%''%.4&'$)+&5..5#)&'),/12&/,48%45&1.0+#,%4$lT N$*%-A+8"A8 '/-+ L33>0- H#-A O3D-A 2">- ."*=$*> 6 VO> =^N>c 6 !,/< M`6 KLLf6 "#"$0"G0- "8 2$$+gll777<"',$.(,;<1.0l$)12l4)7'lKLLf&Lj&M`&5..5#)&8%4()/'$,/$ $ 3<2$0<
M\b< '-- >(,0 D,--6 '-"A4<J U/8 P3/ F": ]38 T$*%J [<c< =Y!PO6 N)1< Kh6 KLL`6 ,$ >K\6"#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLL`lMKlKhl.+%4%.4lKh/,--<2$0#< =2) ,"$2./ %' $2)-."4()/ .- , 1.0+,4; $2,$ 1.0+#,%4)( $. $2) P"/.+),4 R.00%''%.4 $2,$ S..5#)C' +)4,#$%)'-./ 2%' '%$)6 X."4()06 9%.#,$)( $2) PVC' 1.0+)$%$%.4 #,7'< '-- "0+3 Z,0)' S/%00)#0,446
'39- '=-68$4$+9 @G3/8 '-"A4< ]-/8A"0$8: 6 $* >N>! ! >DRVO6 =]P [Pa= NYSY=>U NPR>NPg POO>cO ^[ =]P XV=VDP ^X =]P Y[=PD[P= bjd H?)/%4 [email protected],6 )('6 KLMLI<
M\d< '-- D YR]>DN >< G^O[PD 6 PR^[^!YR >[>UcOYO ^X U >i j\dmjhL Hb$2 )(< M``KI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 479/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"L!
Y4 ,((%$%.4 $. 1/%0%4,# #,7 ,4( 1.00.4 #,76 5.9)/40)4$' 2,9) ,#'.,(.+$)( /)5"#,$./; #,7' $. (),# 7%$2 9,/%."' ,1$%.4' $2,$ 7)/) 4.$ ,((/)'')('"--%1%)4$#; :; 1.00.4 #,7< =2)') /,45) -/.0 $2) /)5"#,$%.4 .- +.##"$%.46 $.#)0.4 #,7' -./ $2) ',#) .- "')( ,"$.0.:%#)'6 $. #,7' ,5,%4'$ 1;:)/2,/,''0)4$< !,4; .- $2)') #,7' ,4( /)5"#,$%.4' 2,9) :))4 /,$%.4,#%@)( ,#.45$2) #%4)' .- 0.()/4 7)#-,/) )1.4.0%1' ,' '.#"$%.4' $. 0,/8)$ -,%#"/)'<M\f
=2) 5.9)/4,41) 0)12,4%'0' -./ +/%9,$) 0"#$%&'%()( +#,$-./0' 0%//./0,4; .- $2)') #,7' ,4( /)5"#,$%.4'< !"#$%&'%()( +#,$-./0' 2,9) ()9)#.+)(/"#)' ,4( )4-./1)0)4$ 0)12,4%'0' -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)'1/),$)( :; ,5)4$' .4 $2)%/ +#,$-./0'<M\\ =2)') %41#"() )--./$' $. 8))++#,$-./0' ',-) -/.0 ')3",# +/)(,$./'6 1;:)/ 2,/,''0)4$6 +./4.5/,+2;6 "4()/&
+/.9%'%.4 .- %4-./0,$%.46 0,/8)$ 0,4%+"#,$%.46 -/,"(6 0%'/)+/)')4$,$%.46 ,4(.++./$"4%'$%1 (%'$./$%.4 .- %4-./0,$%.4<M\h P--./$' $. +.#%1) +#,$-./0' #%8)#;+/.9%() )4./0."' '.1%,# 9,#")6 '%41) '.0) 0"#$%&'%()( +#,$-./0' 7."#(+/.9%() '%54%-%1,4$#; +../)/ ')/9%1) ,4( +)/2,+' 4.$ )9)4 :) 9%,:#) %4 $2),:')41) .- )--./$' $. 1.4$/.# 4)5,$%9) )3$)/4,#%$%)'<
=2) 5.9)/4,41) .- 4)5,$%9) )3$)/4,#%$%)' :; 0"#$%&'%()( +#,$-./0'4)9)/$2)#)'' /,%')' $7. +":#%1 +.#%1; %''")'s,4$%&1.0+)$%$%9) )31#"'%.4 ,4($2) :)4)-%$' .- +/%9,$) 9)/'"' +":#%1 /)5"#,$%.4< ?.$2 %''")' /)'"#$ -/.0 $2))3)/1%') .- :."41)/C' /%52$' $. )4-./1) /"#)' $. 0%$%5,$) +"$,$%9) 4)5,$%9))3$)/4,#%$%)'< >' +/)9%."'#; )3+#,%4)(6 %4 $2) ),/#; (,;' .- $2) U.4(.4 O$.18P312,45) P45#%'2 1."/$' +/.2%:%$)( $2) $/,()/' 72. /)4$)( $2) +/)0%')' .-
Z.4,$2,4C' R.--)) ]."') -/.0 )31#"(%45 .$2)/ $/,()/'<M\` ].7)9)/6 $2) %''").- )31#"'%.4 %' %41/),'%45#; +/.0%4)4$ ,' , /)'"#$ .- ')9)/,# 0"#$%&'%()(+#,$-./0' 2,9%45 1/),$)( 2%52#; '"11)''-"# 5#.:,# :"'%4)'')'< =2)') %41#"()
>++#)6 )?,;6 X,1):..86 S..5#)6 !%1/.'.-$6 [cOPlP"/.4)3$6 ,4( W%',<
!" =]P ?P[PXY=O ^X GDYW>=P D PSVU>=Y^[
>4 %0+./$,4$ F")'$%.4 %' 72)$2)/ +/%9,$)#; .74)( 0"#$%&'%()( +#,$-./0''2."#( :) ,##.7)( $. .+)/,$) +/%9,$) 5.9)/4,41) ';'$)0' $2,$ %41#"() -%4)'6)3%#)6 ,4( A,%#&#%8) +"4%'20)4$<MhL X,1):..86 -./ )3,0+#)6 %' /)5"#,$%45 '.1%,#
M\f< '-- i< _ YG W YORVOY6 Z^OPG] P< ] >DDY[S=^[6 ZD < n Z^][ !< W PD[^[6PR^[^!YRO ^X D PSVU>=Y^[ >[N >[=Y=DVO= Mj Hb$2 )(< KLLdI<
M\\< '-- +/6A" G,/$ W<M\h< 7%( M\`< '-- +/6A" O)1$%.4 W<?<MhL< S..5#)C' +.#%1; .- $,8%45 7):'%$)' $2,$ 2,9) 9%.#,$)( $2)%/ +.#%1; -,/ (.74 %4 $2)
/,48%45' %' '.0)$%0)' /)-)//)( $. ,' BS..5#) A,%#<E '-- N,9) Z.24'.46 ')H !$A8: CA$4=+ C<"8
;"* O"*% P3/A ;396"*:X+ Q-G+$8- $* L33>0- W"$0 6 R?O [PiO HX):< Kh6 KLMMI62$$+gll777<1:'4)7'<1.0lhjLM&dLdMbjrMfK&KhfdLfMdl').&(%/$;&$/%18'&$2,$&1,4&#,4(&;."/&1.0+,4;'&7):'%$)&%4&5..5#)&A,%#<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 480/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"L" ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
:)2,9%./ -./ , 1.00"4%$; $2,$ 2,' , +.+"#,$%.4 $2,$ %' $7%1) ,' #,/5) ,' $2)+.+"#,$%.4 .- $2) V4%$)( O$,$)'< O2."#( X,1):..8s, +/%9,$) )4$)/+/%')s:)/)5"#,$%45 $2) +%1$"/)' $2,$ "')/' '2.7 $. $2)%/ -/%)4(' ./ 72,$ "')/' 1,4 ',;$. ),12 .$2)/p
=2%' F")'$%.4 2%52#%52$' $2) $/,().-- :)$7))4 +":#%1 ,4( +/%9,$) 1.4$/.#:)1,"') :.$2 0)12,4%'0' ,/) %0+)/-)1$<MhM ^4 $2) .4) 2,4(6 +":#%1 1.4$/.#%' '":A)1$ $. , 0;/%,( .- :/),8(.74' %4 +.#%$%1,# ,4( #)5%'#,$%9) +/.1)'')'6%0+)/-)1$%.4' %4 $2) 5.9)/40)4$ %4'$%$"$%.4'6 ,4( "4%4$)4()( 1.4')F")41)'.- /%5%( 0)$2.(' .- 1.4$/.# 0,4(,$)( :; #,7< ^4 $2) .$2)/ 2,4(6 +/%9,$)1.4$/.# %' +/.:#)0,$%1 :)1,"') -./&+/.-%$ -%/0's%41#"(%45 0"#$%&'%()(+#,$-./0's(. 4.$ 4)1)'',/%#; 2,9) %41)4$%9)' $. 0,3%0%@) '.1%,# 7)#-,/) ,4(
0,; %4 -,1$ 2,9) %41)4$%9)' $. /)("1) '.1%,# 7)#-,/)<MhK
>' (%'1"'')( :)#.76 ,+#,$-./0 1."#( )9)4 ,(.+$ /"#)' ,' , +/)$)3$ $. )31#"() 1.0+)$%$./'<
>#$2."52 -./&+/.-%$ -%/0' (. 4.$ 4)1)'',/%#; 2,9) %41)4$%9)' $. %41/),')'.1%,# 7)#-,/)6 0"#$%&'%()( +#,$-./0' 2,9) %41)4$%9)' $. 0,3%0%@) $2) 9,#") .-$2)%/ +#,$-./0' $. $2) 1.00"4%$; :)1,"') $2); .:$,%4 +/.-%$ :; )3$/,1$%45
9,#") -/.0 $2) +#,$-./0< =2); ,#'. 2,9) %41)4$%9)' $. /)("1) 4)5,$%9))3$)/4,#%$%)'< =2) /)9%)7 .- 0"#$%&'%()( +#,$-./0' ,:.9) '2.7' $2,$ 0,4;+#,$-./0' 2,9)s%4 -,1$s)/)1$)( '.+2%'$%1,$)( 5.9)/4,41) 0)12,4%'0' $.(. '.<
Y4 ,'')''%45 72)$2)/ +":#%1 ./ +/%9,$) 1.4$/.# '2."#( 5.9)/4 0"#$%&'%()(+#,$-./0'6 %$ %' %0+./$,4$ $. 4.$) $2,$ 0"#$%&'%()( +#,$-./0' 2,9) ')9)/,#,(9,4$,5)' .9)/ +":#%1 /)5"#,$./'< =2); 2,9) 0./) %4-./0,$%.4 .4 +/,1$%1)'$2,$ 0,; #),( $. 4)5,$%9) )3$)/4,#%$%)' ,4( $2) %0+,1$ .4 $2) 1.00"4%$;< >'
+/%9,$) -%/0'6 0"#$%&'%()( +#,$-./0' 1,4 0,8) ()1%'%.4' F"%18#; .4 2.7 $.(),# 7%$2 4)5,$%9) )3$)/4,#%$%)' ,4( 0.(%-; +/,1$%1)' F"%18#;6 )'+)1%,##; %- $2);.:')/9) "4%4$)4()( 1.4')F")41)'< =2); ,#'. -,1) -)7)/ 1.4'$/,%4$'s-./:)$$)/ ./ 7./')s'%41) $2); ,/) 4.$ '":A)1$ $. (") +/.1)'' ./ ,(0%4%'$/,$%9)+/.1)("/) /)F"%/)0)4$'< ].7)9)/6 $2) +#,$-./0' #,18 '.0) .- $2)%49)'$%5,$%9) 0)$2.(' ,4( +)4,#$%)' $2,$ , +":#%1 )4-./1)/ 7."#( 2,9)<
=2) %''") .- +":#%1 9)/'"' +/%9,$) 1.4$/.# 2,' /)1)4$#; 1.0) "+ %4+/.+.',#' -./ '),/12 4)"$/,#%$;<Mhj G/.+.4)4$' .- '),/12 4)"$/,#%$; +/.+.',#'
MhM< '-- O%0).4 NA,48.9 )$ ,#<6 C<- ]-D ;396"A"8$#- )43*39$4+J jM Z< R^!G>D < PR^[<d`d6 d`h HKLLjI<
MhK< '-- >#)3,4()/ i2%$) n P< S#)4 i);#6 7*+/0"8-% 20"8B3A9 ;396-8$8$3* H[P= Y4'$<6 i./8%45 G,+)/ [.< ML&M\6 KLMMI<
Mhj< '-- F"=$*> 8<- ;"+- B3A '-"A4< ]-/8A"0$8: 6 OP>DR] [PV=D>UY=c 62$$+gll777<'),/124)"$/,#%$;<./5l'),/12&4)"$/,#%$; H^1$< MM6 KLL`IT ;"* '-"A4< !$+4A$9$*"8$3*
G: " F3*3630$+8 R$30"8- 5('( @*8$8A/+8 O"D+ p6 X >YD OP>DR]6 2$$+gll777<-,%/'),/12<./5l7+&1.4$)4$l"+#.,('lKLMMlL\lR,4&O),/12&N%'1/%0%4,$%.4&:;&,&!.4.+.#%'$&W%.#,$)&V<O<& >4$%$/"'$&U,7'M<+(- H#,'$ 9%'%$)( >+/< ML6 KLMKI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 481/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"L7
,/5") $2,$ $2) 5.9)/40)4$ '2."#( +/.2%:%$ '),/12 )45%4)' -/.0B0,4%+"#,$%45E '),/12 /)'"#$' ,4( $2,$ ,## '),/12 /)'"#$' '2."#( :) +/)')4$)(:,')( .4 , 5.9)/40)4$,##; ()$)/0%4)( 4.$%.4 .- /)#)9,41)< =2)') +/.+.',#',/)s4.$ '"/+/%'%45#;s:)%45 ,(9,41)( :; 7):'%$)' $2,$ 2,9) 2,( 12,45)' %4$2)%/ /,48%45' ,' , /)'"#$ .- 0,4",# (.745/,(%45 ./ ,#5./%$20%1 12,45)'<Mhb O"12 +/.+.',#' 7."#( #%0%$ 0"#$%&'%()( +#,$-./0'C "') .- :."41)/C' /%52$' $.+)4,#%@) 7):'%$)' $2,$ ,/) $/;%45 $. 0,4%+"#,$) '),/12 /,48%45'< =2)')/)5"#,$%.4' 7."#( ,#'. #%0%$ '),/12 )45%4) %44.9,$%.4' $. %0+/.9),#5./%$20'6 :)1,"') ,4;.4) 72.') /,48%45' 12,45) 1."#( 1#,%0 $2,$ $2),#5./%$20 (%( 4.$ 12,45) 4)"$/,##;< =2"' 5.9)/40)4$ /)5"#,$%.4 1."#(%0+.') '":'$,4$%,# '.1%,# 1.'$' :.$2 :; /)F"%/%45 +.$)4$%,##; '#.7 ,4(
)3+)4'%9) /)5"#,$./; /)9%)7 ,4( :; 0,8%45 -,#')&+.'%$%9) -%4(%45' .-B0,4%+"#,$%.4E :,')( .4 (%--)/)41)' %4 1.0+#)3 ,4( +.$)4$%,##; '":A)1$%9)A"(50)4$' .- B/)#)9,41)<EMhd
#" >[=Y&R^!GP=Y=YWP PaRUVOY^[g > GD^G^OPN =]DPP&O =PG
>[>UcOYO
i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
)31#"()( $2) -%/0 :)1,"') $2) -%/0 9%.#,$)( $2) /"#)' $2) +#,$-./0< =2,$,/5"0)4$ 1."#( :) $/") ,' '2.74 ,:.9)6 ./ %$ 1."#( :) , +/)$)3$ -./ ,4$%&1.0+)$%$%9) )31#"'%.4< =2%' ,/$%1#) +/.+.')' , $2/))&+,/$ $)'$ $. 2)#+ 1."/$',4( 1.0+)$%$%.4 ,"$2./%$%)' (%'$%45"%'2 :)$7))4 )--%1%)4$ +/%9,$) 5.9)/4,41),4( ,4$%&1.0+)$%$%9) )31#"'%.4<
i2)4 , -%/0s)'+)1%,##; .4) 7%$2 '%54%-%1,4$ 0,/8)$ +.7)/s)31#"()',4.$2)/ -%/0 -/.0 $2) 0,/8)$6 %$' ,1$%.4' 0,; :) '":A)1$ $. '1/"$%4; "4()/,4$%$/"'$ #,7'<Mhf Y4 $2) V4%$)( O$,$)'6 )31#"'%.4,/; +/,1$%1)' 0,; 9%.#,$)O)1$%.4 K .- $2) O2)/0,4 >1$6 72%12 +/.2%:%$' ,$$)0+$' $. 1/),$) ./ 0,%4$,%4
Mhb< '-- >(,0 D,--6 '-"A4<J U/8 P3/ F": ]38 T$*%J [<c< =Y!PO6 N)1< K\6 KLL`6 "#"$0"G0- "8 2$$+gll777<4;$%0)'<1.0lKLL`lMKlKhl.+%4%.4lKh/,--<2$0#<
Mhd< '-- Z,0)' S/%00)#0,446 '39- '=-68$4$+9 @G3/8 '-"A4< ]-/8A"0$8: 6 $* =]P [Pa=
NYSY=>U NPR>NPg POO>cO ^[ =]P XV=VDP ^X =]P Y[=PD[P= H?)/%4 [email protected], n >(,0
!,/1"' )('<6 KLMLI<Mhf< '-- PY[PD PU]>VSP n N >!YP[ SPD>NY[6 SU^?>U >[=Y=DVO= U >i >[N
PR^[^!YRO HX."4(,$%.4 K( )(< KLMMI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 482/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"LL ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
, 0.4.+.#;< Y4 1)/$,%4 1%/1"0'$,41)'6 )31#"'%.4,/; +/,1$%1)' 0,; ,#'. 9%.#,$)O)1$%.4 M6 72%12 +/.2%:%$' "4/),'.4,:#) ,5/))0)4$' %4 /)'$/,%4$ .- $/,()<Mh\ Y4$2) P"/.+),4 V4%.46 )31#"'%.4,/; +/,1$%1)' 1."#( :) 1.4'%()/)( ,:"')' .-(.0%4,41) "4()/ $2) >/$%1#) MLK =XPV<Mhh
>' ,4$%$/"'$ 2,' ,(.+$)( , 0./) )1.4.0%1'&:,')( ,++/.,126 '.0),'+)1$' .- )31#"'%.4,/; ,:"') 1#,%0' 2,9) :))4 9%)7)( ,' +/.:#)0,$%1 ./ ,$#),'$ 1.4$/.9)/'%,#<Mh` X./ )3,0+#)6 V<O< 1."/$' 2,9) )3+/)'')( '8)+$%1%'0.9)/ 9)/$%1,# /)'$/,%4$ 1,')' ,4( 0.4.+.#; #)9)/,5%45<M`L R."/$' 2,9)5)4)/,##; /)A)1$)( 1#,%0' +/)0%')( .4 $2) )31#"'%.4 .- , 1.0+)$%$./ -/.0,11)'' $. +/.+)/$; .74)( :; $2) ()-)4(,4$<M`M V<O< 1."/$' 2,9) ,#'.)3+/)'')( '8)+$%1%'0 .9)/ 1#,%0' %49.#9%45 $2) )31#"'%.4 .- (%/)1$
1.0+)$%$./' '"12 ,' $2.') $2,$ '$)0 -/.0 $2) %0+/.9)0)4$ .- , +/.("1$<M`K
Y4 -,1$6 $2); 2,9) /,%')( $2) :,/ -./ '.0) +/,1$%1)' '"--%1%)4$#; 2%52 $2,$ $2);,/) )--)1$%9)#; H%- 4.$ #%$)/,##;I +)/ ') #)5,# "4()/ $2) /"#) .- /),'.4< X./)3,0+#)6 %$ %' )3$/)0)#; (%--%1"#$ -./ , +#,%4$%-- $. )'$,:#%'2 $2,$ , /%9,# 2,')45,5)( %4 B+/)(,$./; +/%1%45Es$2,$ %' $2) /%9,# 2,' B+/%1)( #.7E $. (/%9)."$ , /%9,# ,4( $2)/):; 0.4.+.#%@) , 0,/8)$<M`j
=2) P"/.+),4 V4%.4 2,' ,#'. 0.9)( %4 $2%' (%/)1$%.4< =2) P"/.+),4R.00%''%.4 5"%()#%4)' .4 )4-./1)0)4$ +/%./%$%)' -./ >/$%1#) hK H4.7 >/$%1#)MLK =XPVI /)1.54%@) $2,$ 9)/$%1,# ,4( 2./%@.4$,# )31#"'%.4,/; +/,1$%1)''2."#( :) '":A)1$ $. $2) /"#) .- /),'.4 ,4( $2,$ ()+)4(%45 .4 $2) -,1$",#1%/1"0'$,41)' , -%/0 7%$2 '%54%-%1,4$ 0,/8)$ +.7)/ 0,; 4.$ 2,9) $2) ,:%#%$;./ %41)4$%9)' $. -./)1#.') , /%9,#<M`b =2) P"/.+),4 V4%.4 1.4$%4")' $.
Mh\< '-- O2)/0,4 >4$%$/"'$ >1$6 Md V<O<R< tt MmK HMh`LI<Mhh< '-- =/),$; .4 $2) X"41$%.4%45 .- $2) P"/.+),4 V4%.46 ,/$< MLK6 !,; `6 KLLh6 dM
^XXYRY>U Z< ^X PVD < V[Y^[ h` HKLLhI<Mh`< =2) V<O< 1."/$' %4 +,/$%1"#,/ 2,9) :))4 %4-#")41)( :; $2) -%4(%45' .- )1.4.0%'$'
$2,$ -%/0' )45,5) %4 9)/$%1,# -./)1#.'"/) +/,1$%1)' -./ +/.&1.0+)$%$%9) /),'.4'< '-- U))5%4R/),$%9) U),$2)/ G/.('<6 Y41 9< GO_O6 Y41<6 ddM V<O h\\ HKLL\IT ?/%)- -./ P1.4.0%'$' ,' >0%1% R"/%,) O"++./$%45 G)$%$%.4)/6 U))5%4 R/),$%9) U),$2)/ G/.('<6 Y41< 9< GO_O6 Y41<6 ddMV<O< h\\ HKLL\I<
M`L< '-- ]PD?PD= ]^WP[_>!G n G]YUUYG P< >DPPN>6 XV[N>!P[=>UO ^X
>[=Y=DVO= U >i H>'+)4 j/( )(< KLLbIT PU]>VSP n SPD>NY[6 +/6A" 4.$) Mhf<M`M< '-- W)/%@.4 R.00"4%1,$%.4' Y41< 9< U,7 ^--%1)' .- R"/$%' W< =/%48.6 UUG6 dbL
V<O j`h HKLLjI<M`K< '-- >##%)( ^/$2.+)(%1 >++#%,41)' Y41<6 9< =;1. ]),#$2 R,/) S/."+ UG6 d`K X<j(
``M H`$2 R%/< KLMLI<M`j< !,/8 O< G.+.-'8;6 !-B$*$*> )K40/+$3*"A: ;3*%/48? '-48$3* `J C<- ./0- 3B .-"+3*J "*% 8<-
5*$B:$*> 2A$*4$60- 5*%-A0:$*> @*8$8A/+8 ./0-+ 6 \j >[=Y=DVO= U< Z< bjd6 bbKmbj HKLLfI<M`b< '-- P"/.+),4 R.00%''%.46 R.00"4%1,$%.4 -/.0 $2) R.00%''%.4sS"%(,41) .4
Y$' P4-./1)0)4$ G/%./%$%)' %4 >++#;%45 >/$%1#) hK HPRI $. >:"'%9) P31#"'%.4,/; R.4("1$ :;N.0%4,4$ V4()/$,8%45 HX):< Kb6 KLL`I6 "#"$0"G0- "8 2$$+gll)"/&#)3<)"/.+,<)"lU)3V/%O)/9lU)3V/%O)/9<(.p"/%qRPUPagdKLL`aRLKKbHLMIgP[g[^=< '-- "0+3 O$)9)4 R< O"4'2%4)6
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 483/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"L%
0,4(,$) ,11)'' $. )'')4$%,# -,1%#%$%)' :"$ %0+.')' , '%54%-%1,4$ :"/()4 .-+)/'",'%.4 .4 $2) +,/$%)' ()0,4(%45 ,11)''<M`d
[)9)/$2)#)''6 %$ %' +.''%:#) $2,$ -%/0' 7%$2 '%54%-%1,4$ 0,/8)$ +.7)/ 0,;)45,5) %4 ,4$%&1.0+)$%$%9) )31#"'%.4< =2) F")'$%.4 ,((/)'')( 2)/) %' 2.7 $.2,4(#) )31#"'%.4,/; 1.4("1$ 1,')' $2,$ /)'"#$ -/.0 $2) %0+.'%$%.4 .-+)4,#$%)' .4 -%/0' "4()/ )'$,:#%'2)( 0"#$%&'%()( +#,$-./0 5.9)/4,41)';'$)0'<
> +#,$-./0 1."#( %49.8) 4)5,$%9) )3$)/4,#%$%)' %4 )31#"(%45 , +.''%:#)/%9,# -/.0 ,11)'' $. %$' +#,$-./0< Y- %$ (.)' 4.$ 2,9) , 5.9)/4,41) ';'$)0 %4.+)/,$%.46 ,4( )31#"'%.4 .- $2) 1.0+)$%$./ %' :,')( .4 ,4 %(%.';41/,$%1()1%'%.4 /,$2)/ $2,4 , ';'$)0,$%1 +/.1)'' -./ (),#%45 7%$2 4)5,$%9)
)3$)/4,#%$%)'6 $2)/) %' 4. /),'.4s:,')( .4 $2) ,4,#;'%' ,:.9)s$. )9,#",$)$2) 1.4("1$ (%--)/)4$#; $2,4 .$2)/ )31#"'%.4,/; 1.4("1$ ,##)5,$%.4'< =2)1."/$ '2."#( $,8) $2) )--%1%)41; )3+#,4,$%.4 .--)/)( :; $2) ()-)4(,4$ %4$.,11."4$ %4 7)%52%45 $2) +/.&1.0+)$%$%9) ,4( ,4$%&1.0+)$%$%9) ,'+)1$' .- $2)+/,1$%1)6 ./ %4 ,++#;%45 $2) .$2)/7%') ,++#%1,:#) #)5,# -/,0)7./8<M`f
Y$ %' 4.7 7%()#; ,11)+$)( $2,$ ,4$%$/"'$ /"#)' '2."#( $,8) %4$. ,11."4$ $2)1.'$' ,4( #%8)#%2..( .- 0,8%45 0%'$,8)'<M`\ D"#)' $2,$ $)4( $. ,:'.#9) -%/0'$2,$ 2,9) )45,5)( %4 ,4$%&1.0+)$%$%9) +/,1$%1)' 1,4 )41."/,5) 0./) -%/0' $.)45,5) %4 $2)') +/,1$%1)'< D"#)' $2,$ $)4( $. 1.4()04 -%/0' -./ )45,5%45 %4+/,1$%1)' $2,$ ,/) +/.&1.0+)$%$%9) 1,4 ()$)/ -%/0' -/.0 ,(9,41%45 '.1%,#
7)#-,/)<
=2,$ :,#,41) :)$7))4 -,#') +.'%$%9)' ,4( -,#') 4)5,$%9)' %' )'+)1%,##;1/%$%1,# 72)4 $2) 12,##)45)( ,1$%.4 .- $2) +#,$-./0 %' $,8)4 +"/'",4$ $. , +/)&
)3%'$%45 5.9)/4,41) ';'$)0< =2) -,1$ $2,$ , -%/0 %' , +#,$-./0 ,4( 0,%4$,%4' ,5.9)/4,41) ';'$)0 -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)' +/.9%()' , '$/.45+/)'"0+$%.4 $2,$ $2) -%/0 %' %41/),'%45 '.1%,# 7)#-,/) :; +.#%1%45 :,(:)2,9%./ +"/'",4$ $. $2,$ 5.9)/4,41) ';'$)0 .4 %$' +#,$-./0< =2,$ %' #%8)#; $.
N)+"$; >''%'$,4$ >$$./4); S)4)/,#6 V<O< N)+C$ .- Z"'$%1)6 >((/)'' ,$ $2) >0)/%1,4 ?,/ >''.1%,$%.4 O)1$%.4 .- >4$%$/"'$ U,7g W)/$%1,# !)/5)/ P4-./1)0)4$ G.#%1; H>+/< d< M``dI6"#"$0"G0- "8 2$$+gll777<A"'$%1)<5.9l,$/l+":#%1l'+))12)'lKKMd<+(-<
M`d< '-- R,') R&\l`\6 ^'1,/ ?/.44)/ S0:] n R.< _S 9< !)(%,+/%4$ e)%$"45'6 M``hP<R<D< Y&\\`M6 || bMmb\ H2.#(%45 $2,$ /)-"'%45 ,11)'' (.)' 4.$ 1.4'$%$"$) ,:"') .- ,(.0%4,4$ +.'%$%.4 7%$2%4 $2) 0),4%45 .- >/$%1#) hf .- =XPV6 )9)4 72)4 $2)/) %' .4#; .4)4,$%.47%() 4)7'+,+)/ 2.0)&()#%9)/; '12)0)6 ,4( )9)4 72)4 $2) '0,## 1%/1"#,$%.4 .- /%9,#4)7'+,+)/' /)4()/' %$ )1.4.0%1,##; %0+.''%:#) $. )'$,:#%'2 '%0%#,/ ()#%9)/; '12)0)'I<
M`f< O)) $2) -%9) +,/$ $)'$ %4 5*$8-% '8"8-+ #( F$4A3+3B8 6 Kdj X<j( jb HN<R< R%/< KLLMI<M`\< '-- PU]>VSP n SPD>NY[6 +/6A" 4.$) MhfT ]PD?PD= ]^WP[_>!G n G]YUUYG P<
>DPPN>6 XV[N>!P[=>UO ^X >[=Y=DVO= U >i H>'+)4 j( )(< KLLbIT N,9%( O< P9,4'6 Q<:
!$BB-A-*8 W/A$+%$48$3*+ !3 ]38 e"*% '<3/0% ]38f @%368 8<- '"9- @*8$8A/+8 ./0-+ 6 ML R]Y< Z< Y[=U< U<MfM HKLL`IT X/)()/%18 ?)184)/ YYY n O$)9)4 R< O,#.+6 !-4$+$3* C<-3A: "*% @*8$8A/+8 ./0-+ 6 f\ >[=Y=DVO= U< Z< bM HM```mKLLLI<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 484/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"L- ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
:) ,4 )3$/)0)#; 9,#",:#) ')/9%1) $. $2) 1.4'"0)/' .4 $2) 9,/%."' '%()' .- $2)+#,$-./0< =2) ,:%#%$; $. )31#"() $2.') 72. 1/),$) 4)5,$%9) )3$)/4,#%$%)' %'1/%$%1,# $. $2) -"41$%.4%45 .- $2,$ 5.9)/4,41) ';'$)0 ,4( "#$%0,$)#; -./ $2).9)/,## 9,#") .- $2) +#,$-./0<
^- 1."/')6 %$ %' +.''%:#) $2,$ , +#,$-./0 2,' )'$,:#%'2)( ./ '$/"1$"/)( ,5.9)/4,41) ';'$)0 ,' , +/)$)3$ -./ )31#"(%45 1.0+)$%$./'< > +#,$-./0 1."#()'$,:#%'2 /"#)' $2,$ +/.2%:%$ +,/$%1%+,4$' -/.0 /)#;%45 .4 ./ %4$)/1.44)1$%45
7%$2 .$2)/ +#,$-./0'< G/%./ $. %$' :/),8&"+s-./ )3,0+#)s>=n= +/.9%()(#.1,# ,4( #.45&(%'$,41) $)#)+2.4) ')/9%1) "4()/ +":#%1 "$%#%$; /,$) /)5"#,$%.4,4( ,#'. 2,( ,4 "4/)5"#,$)( )F"%+0)4$ 0,4"-,1$"/)/<M`h Y$ )'$,:#%'2)( /"#)'1.41)/4%45 $2) %4$)/1.44)1$%.4 .- )F"%+0)4$ ,4( .$2)/ ')/9%1)' $. %$'
4)$7./8' $2,$ %$ 1#,%0)( 7)/) ()'%54)( $. )4'"/) $2) %4$)5/%$; .- $2)$)#)+2.4) ';'$)0<M`` Y$ 2,' :))4 ,/5")( $2,$ >=n= '.0)$%0)' ,++#%)( $2)')/"#)' $. )31#"() 1.0+)$%45 )F"%+0)4$ 0,4"-,1$"/)/' ,4( 1.0+)$%45 #.45&(%'$,41) $)#)+2.4) ')/9%1) +/.9%()/' %4 9%.#,$%.4 .- $2) ,4$%$/"'$ #,7'<KLL =.')$$#) ,4 ,4$%$/"'$ 1,') :/."52$ :; $2) V<O< N)+,/$0)4$ .- Z"'$%1)6 >=n=,5/))( $. (%9)'$ %$' #.1,# .+)/,$%45 1.0+,4%)' ,4( %$' )F"%+0)4$0,4"-,1$"/)/<KLM =2)/)-./)6 $2) )3%'$)41) .- , 5.9)/4,41) ';'$)0 '2."#(4.$s:; %$')#-s+/)1#"() , -%4(%45 .- ,4$%&1.0+)$%$%9) )31#"'%.4<
[)9)/$2)#)''6 $2) )3%'$)41) .- , 5.9)/4,41) ';'$)0 %41/),')' $2)#%8)#%2..( $2,$ $2) +/,1$%1) $2,$ /)'"#$' %4 )31#"'%.4 %' +/.&1.0+)$%$%9)<S.9)/4,41) ';'$)0' ,/) 1.00.4 ,0.45 +#,$-./0'6 ,/) 4)1)'',/; -./ (),#%45
7%$2 4)5,$%9) )3$)/4,#%$%)'6 ,4( 1,4 %41/),') 1.4'"0)/ 7)#-,/)< =. $2) )3$)4$$2)/) ,/) ')/%."' 4)5,$%9) )3$)/4,#%$; +/.:#)0' .4 $2) +#,$-./06 ,4$%$/"'$()1%'%.4' $2,$ +/.2%:%$ -%/0' -/.0 )45,5%45 %4 +/.&1.0+)$%$%9) )31#"'%.4
7."#( %0+.') '%54%-%1,4$ 1.'$' .4 $2) +#,$-./0 :)1,"') $2) +#,$-./0 7."#(:) -./1)( $. 7),8)4 %$' )4-./1)0)4$ 0)12,4%'0'< !./).9)/6 .$2)/ +#,$-./0'1.41)/4)( 7%$2 $2) /%'8 .- ,4 ,4$%$/"'$ '"%$ 7%## 7),8)4 $2)%/ 5.9)/40)4$';'$)0' $. $2) .9)/,## ()$/%0)4$ .- +#,$-./0 1"'$.0)/'<
=2) M\fK ()1%'%.4 1.41)/4%45 Z.4,$2,4C' R.--)) ]."')KLK %##"'$/,$)' $2)(,45)/' .- #%0%$%45 $2) ,:%#%$; .- +/%9,$) +#,$-./0' $. )3)/1%') :."41)/C'/%52$' $. /)5"#,$) $2)%/ +#,$-./0'< >' , /)'"#$ .- $2) ()1%'%.46 $2) -%/'$ U.4(.4O$.18 P312,45) 2,( $. ,(.+$ %4)--)1$%9) 0)$2.(' -./ (),#%45 7%$2 4)5,$%9))3$)/4,#%$%)' ,0.45 0)0:)/'< Y$ 7,' 4.$ "4$%# -./$; ;),/' ,-$)/ $2) ()1%'%.4
M`h< '-- =Y! i V6 =]P ! >O=PD O iY=R]g =]P D YOP >[N X >UU ^X Y[X^D!>=Y^[
P!GYDPO d\6 Mhhmh` HKLMLI<M``< 7%( ,$ Mh`<
KLL< 7%( ,$ MLhmL`<KLM< V4%$)( O$,$)' 9< i)'$)/4 P#)1< R.< Y41<6 `f` X<K( MKjM HN<R< R%/< M``KI<KLK< ^#(2,06 +/6A" 4.$) MbM6 ,$ Mhdmhf<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 485/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"LJ
$2,$ $2) P45#%'2 '$.18 )312,45) 1."#( )--)1$%9)#; /)5"#,$) :,( :)2,9%./,0.45 %$' 0)0:)/'<KLj =2) )//./&1.'$ ,4,#;'%' .- 5.9)/4,41) ';'$)0'%4(%1,$)' $2,$ $2) '$,4(,/( /"#) .- /),'.4 ,++/.,12 '2."#( :) 0.(%-%)( %4 $2)',0) 7,;s,4( -./ '%0%#,/ /),'.4's%$ 2,' :))4 0.(%-%)( -./ .$2)/ +/,1$%1)'$2,$ ,/) #%8)#; $. :) +/.&1.0+)$%$%9)<KLb =2)/) '2."#( :) , +/)'"0+$%.4 $2,$)31#"'%.4 $2,$ /)'"#$' -/.0 ,4 )'$,:#%'2)( 5.9)/4,41) ';'$)0 -./ (),#%45 7%$24)5,$%9) )3$)/4,#%$%)' %' +/.&1.0+)$%$%9)< =2) +#,%4$%-- '2."#( :),/ $2) :"/()4.- +)/'",'%.4 .- '2.7%45 .$2)/7%')<
ANOPQR !
?,')( .4 $2)') 1.4'%()/,$%.4' $2%' >/$%1#) +/.+.')' , $2/))&'$)+ $)'$s '"00,/%@)( %4 X%5"/) Ms-./ )31#"'%.4,/; :)2,9%./ %49.#9%45 0"#$%&'%()(+#,$-./0'< =2%' >/$%1#) ,''"0)' $2) +#,%4$%-- 2,' ,#/),(; 0)$ $2) "'",# :"/()4
KLj< !YR]YP6 +/6A" 4.$) Mjj6 ,$ jd<KLb< '-- N,9%( O< P9,4' n >< Z./5) G,(%##,6 !-+$>*$*> @*8$8A/+8 ./0-+ B3A @++-++$*> 5*$0"8-A"0
2A"48$4-+? @ ]-3E;<$4">3 @66A3"4<J \K V< R]Y< U< D PW \K HKLLdI< Y4 $2%' >/$%1#)6 Y ,0 -.1"'%45
.4#; .4 2.7 )3%'$%45 ,4$%$/"'$ /"#)' '2."#( :) 0.(%-%)( 5%9)4 $2) )3%'$)41) .- +#,$-./0&:,')( 5.9)/4,41) ';'$)0' -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)'< Y (. 4.$ ,((/)'' 72)$2)/)3%'$%45 /"#)' ,/) '."4(<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 486/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"L8 ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
.- )'$,:#%'2%45 , /)#)9,4$ 0,/8)$ ,4(s,' ,++#%1,:#)s$2) +.$)4$%,# -./ $2)12,##)45)( +/,1$%1) $. /,%') +/%1) ./ /)'$/%1$ ."$+"$< Y4 $2) -%/'$ '$)+ .- $2),4,#;'%'s()-)4(%45 ,5,%4'$ $2) 1.0+#,%4,4$C' +/%0, -,1%) 1,')s$2)+#,$-./0 '2."#( 2,9) $2) .++./$"4%$; $. ()0.4'$/,$) $2,$ %$ 2,' )'$,:#%'2)( ,5.9)/4,41) ';'$)0 -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)' ,4( $2,$ $2)+/,1$%1) ,$ %''") /)'"#$' -/.0 $2) )3)/1%') .- $2,$ 5.9)/4,41) ';'$)0< Y- $2)+#,$-./0 1,44.$ (. '.6 '$,4(,/( ,4$%$/"'$ /"#)' ,++#%1,:#) $. $2) +/,1$%1) ,$%''") '2."#( ,++#; H')) '$)+ $2/))I< Y- $2) +#,$-./0 1,4 (. '.6 $2) ,4,#;'%''2."#( 0.9) $. $2) ')1.4( '$)+<
=2) ')1.4( '$)+ '2."#( 1.4'%()/ 72)$2)/ $2) )31#"'%.4 %' %41.4'%'$)4$ 7%$2 $2) "') .- $2) 5.9)/4,41) ';'$)0 $. (),# 7%$2 4)5,$%9) )3$)/4,#%$%)' ./
72)$2)/ $2) 5.9)/4,41) ';'$)0 %$')#- 2,' :))4 )'$,:#%'2)( ,' , +/)$)3$ -./)31#"(%45 1.0+)$%$./'< =2) +#,%4$%-- '2."#( :),/ $2) :"/()4 .-()0.4'$/,$%45 $2,$ $2) 5.9)/4,41) ';'$)0 %' 4.$ /),'.4,:#; /)#,$)( $.)4-./1)0)4$ .- $2) 5.,#' $2) 5.9)/4,41) 0)12,4%'0 %' ()'%54)( $. ,12%)9)<
=2) +#,%4$%-- 0,; :) ,:#) $. '2.7 $2,$ $2) +#,$-./0 ,++#%)( $2) /"#)'(%--)/)4$%,##;s)31#"(%45 , 1.0+)$%$./ 72)4 %$ 7."#( 4.$ 2,9) ./(%4,/%#;)31#"()( $2) -%/0 $2,$ ,##)5)(#; 9%.#,$)( $2) /"#)'s./ 1/),$)( , ')+,/,$) 1#,''.- .--)4')' $2,$ /)'"#$' %4 $2) )31#"'%.4 .- 1.0+)$%$./'< =2) +#,%4$%-- 0,;,#'. :) ,:#) $. '2.7 $2,$ $2) 5.9)/4,41) ';'$)0 %' "4/)#,$)( $. $2)1.//)1$%.4 .- 4)5,$%9) )3$)/4,#%$%)' ./ )'$,:#%'2)( ,' , +/)$)3$ -./ )31#"'%.4<
=2) +#,%4$%-- C' 1#,%0 '2."#( :) /)A)1$)( "4#)'' $2) +#,%4$%-- 1,4 ()0.4'$/,$)$2,$ $2) +/,1$%1) %' %41.4'%'$)4$ 7%$2 $2) 0%$%5,$%.4 .- 4)5,$%9) )3$)/4,#%$%)'<^$2)/7%') $2) ,4,#;'%' '2."#( +/.1))( $. $2) $2%/( '$)+<
=2) $2%/( '$)+s,//%9)( ,$ %- $2) ()-)4(,4$ -,%#' $2) -%/'$ '$)+ ./ $2)+#,%4$%-- '"11))(' %4 $2) ')1.4( '$)+s7."#( -.##.7 $2) '$,4(,/( ,4$%$/"'$,4,#;'%' ,++#%1,:#) $. $2) 12,##)45)( 1.4("1$ ,$ %''")< Y4 $2) V4%$)( O$,$)'6$2) $2%/( '$)+ 7."#( %49.#9) ,4,#;@%45 72)$2)/ $2) +/,1$%1) H%I -./)1#.')' .//,%')' /%9,#'C 1.'$' %4 , 0,44)/ $2,$ )42,41)' $2) ()-)4(,4$C' ,:%#%$; $. /,%')+/%1) ./ /)'$/%1$ 0,/8)$ ."$+"$ $. $2) ()$/%0)4$ .- 1.4'"0)/' ,4( $2)4H%%I 7)%52%45 $2) ,4$%&1.0+)$%$%9) ,4( +/.&1.0+)$%$%9) )--)1$' $. ()$)/0%4)
72)$2)/ $2) +/,1$%1) %'6 .4 4)$6 ,4$%&1.0+)$%$%9)< V4()/ 0,4; 1%/1"0'$,41)'6, '"11)''-"# '2.7%45 :; $2) 1.0+#,%4,4$ "4()/ '$)+ $7. 7."#( ()0.4'$/,$)$2) #,18 .- +/.&1.0+)$%$%9) )--)1$'<
>' 7%$2 ,4; )//./&1.'$ :,')( ,++/.,126 $2%' $2/))&'$)+ ,4,#;'%' 1,44.$)#%0%4,$) -,#') +.'%$%9)' ,4( -,#') 4)5,$%9)'< =2) +#,%4$%-- 0%52$ '"11))( %4'2.7%45 $2,$ $2) ,++#%1,$%.4 .- ,4 )31#"'%.4,/; +)4,#$; %' , +/)$)3$ )9)4$2."52 %$ %' , 9,#%( ,$$)0+$ $. )#%0%4,$) , 4)5,$%9) )3$)/4,#%$;< > ()-)4(,4$
0%52$ '"11))( %4 '2.7%45 $2,$ ,4 )31#"'%.4,/; +)4,#$; %' +,/$ .- , +/.&1.0+)$%$%9) 5.9)/4,41) ';'$)0 72)4 %4 -,1$ %$ %' ()'%54)( $. )31#"() ,1.0+)$%$./ ,4( 2,/0 1.4'"0)/'< [)9)/$2)#)''6 $2) ,++/.,12 /)("1)' $2)
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 487/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
"#!"K ;1'&<)=); :@32=B*=0&0 93(2A1<:* !"LM
#%8)#%2..( ,4( 1.'$' .- )//./' %4 #%52$ .- $2) /.#) .- 5.9)/4,41) ';'$)0' %4/)("1%45 4)5,$%9) )3$)/4,#%$%)' $2,$ 7."#( .$2)/7%') 2,/0 1.4'"0)/'<
'==I
C1)C3@*=1)
>#$2."52 $2) :"'%4)'' 0.()# 2,' :))4 ,/."4( -./ 0%##)44%,6 0"#$%&'%()(+#,$-./0' 2,9) :)1.0) +,/$%1"#,/#; +/.0%4)4$ '%41) $2) ,(9)4$ .- $2)1.00)/1%,# 7):<KLd =2) Y4$)/4)$ ,4( 7): $)124.#.5%)' -,1%#%$,$) $2) 1/),$%.4.- +#,$-./0' -./ (%--)/)4$ $;+)' .- "')/' $2,$ 7."#( :)4)-%$ -/.0 5)$$%45$.5)$2)/<KLf >' , /)'"#$ .- '1,#) )1.4.0%)' ,4( $2) ,:%#%$; $. )%$2)/ /)+#%1,$) ,+#,$-./0 ,1/.'' 5).5/,+2%)'6 ./ $. 1.44)1$ 5#.:,# 1.00"4%$%)'6 '.0) .-$2)') +#,$-./0' 2,9) :)1.0) 5#.:,# +#,;)/'< =2)') 0"#$%&'%()( +#,$-./0' ,/)
#%8)#; $. ,$$/,1$ %41/),'%45 ,$$)4$%.4 -/.0 +.#%1;0,8)/' :)1,"') .- $2)%/)1.4.0%1 ,4( '.1%,# '%54%-%1,41)< O)9)/,# ,#/),(; 2,9)<
>4 )'')4$%,# -),$"/) .- $2)') +#,$-./0' %' $2,$ $2); +/.0.$) +.'%$%9))3$)/4,#%$%)' :)$7))4 0)0:)/' .- $2) 1.00"4%$;< ?"$ ,' 7%$2 ,4;1.00"4%$;6 $2)/) ,/) 4"0)/."' .++./$"4%$%)' -./ +).+#) ,4( :"'%4)'')' $.5)4)/,$) 4)5,$%9) )3$)/4,#%$%)' $2,$ 1,4 /)("1) )1.4.0%1 )--%1%)41; ,4(s%4$2) )3$/)0)s#),( $. $2) $/,5)(; .- $2) 1.00.4'<
!.'$ (%'1"''%.4' .- $2)') +#,$-./0' 2,9) -.1"')( .4 2.7 0"#$%&'%()(+#,$-./0' 1/),$) 9,#") :; 2,/4)''%45 +.'%$%9) )3$)/4,#%$%)' ,4( 2.7 +.'%$%9)4)$7./8 )--)1$' 1,4 /)'"#$ %4 $2) )0)/5)41) .- (.0%4,4$ +#,$-./0' %4+,/$%1"#,/ 1,$)5./%)'< !"12 #)'' ,$$)4$%.4 2,' :))4 5%9)4 $. $2) /.#) $2)')+#,$-./0' +#,; %4 0%$%5,$%45 4)5,$%9) )3$)/4,#%$%)'< >' %$ $"/4' ."$6 0,4; .-$2)') +#,$-./0' 2,9) ()9)#.+)( 5.9)/4,41) ';'$)0' -./ (),#%45 7%$2 :,(
:)2,9%./< =2)') 5.9)/4,41) ';'$)0' "#$%0,$)#; ()+)4( .4 $2) ,:%#%$; .- $2)+#,$-./0 $. )31#"() ,5)4$' -/.0 '.0) F",4$"0 .- $2) +#,$-./06 %41#"(%45+/.2%:%$%45 $2)0 -/.0 $2) +#,$-./0 )4$%/)#;<
P3)/1%'%45 $2)') )31#"'%.4,/; /%52$' %' 1.4$/.9)/'%,#< =2) +#,$-./0 2,' $.:,#,41) $2) %4$)/)'$' .- %$' 0"#$%+#) 1.4'$%$")4$'< D"#)' 1.41)/4%45 4)5,$%9))3$)/4,#%$%)'sA"'$ ,' $2.') %49.#9%45 +.'%$%9) .4)'s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
KLd< '-- P9,4' n O120,#)4'))6 +/6A" 4.$) \6 ,$ MdK<KLf< '-- P9,4' n O120,#)4'))6 +/6A" 4.$) d6 ,$ d<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 488/512
!"#!$!"%#$& '()* $+&,$!!#-!" /01 )12 0&3&2&4 !!5-5"#!" %678 9:
!"%# ,&<D&3&? 2&C>)131;? 3(+ E1@<)(3 F'GHI "J6!"#!
+#,$-./0 $. ,## %$' 1.4'$%$")4$' %' +/)9,#)4$6 %0+./$,4$6 ,4( :)4)-%1%,#< >4$%$/"'$ ,4,#;'%' '2."#( $2)/)-./) "') )31#"'%.4 :,')( .4 , 5.9)/4,41)';'$)0 -./ (),#%45 7%$2 4)5,$%9) )3$)/4,#%$%)' ,' , '2%)#( -./ +/,1$%1)' $2,$ ,/)#%8)#; $. :) +/.&1.0+)$%$%9)6 ,4( /)1.54%@) $2,$ 1.4()04%45 $2)%0+#)0)4$,$%.4 .- 5.9)/4,41) ';'$)0's,' , 5)4)/,# 0,$$)/s%' #%8)#; $.1/),$) -,#') +.'%$%9)'< =2) $2/))&'$)+ ,4,#;'%' +/.+.')( ,:.9) 7."#( :)$$)/:,#,41) $2) 1.'$' .- -,#') +.'%$%9)' ,4( -,#') 4)5,$%9)' %4 #%52$ .- $2) 1.00.4"') .- 5.9)/4,41) ';'$)0' $. 0%$%5,$) 4)5,$%9) )3$)/4,#%$%)' ,4( %41/),')1.4'"0)/ 7)#-,/) %4 +#,$-./0 1.00"4%$%)'<
i2%#) :.$2 +/%9,$) ,4( +":#%1 1.4$/.# .- :,( :)2,9%./ .4 +#,$-./0' 2,9)$2)%/ +#,1)6 +/%9,$) 1.4$/.# $2/."52 , +#,$-./0 7%## .-$)4 :) '"+)/%./ $.
+":#%1 1.4$/.#< =2) +#,$-./0 1,4 %()4$%-; +/.:#)0' 0./) ),'%#;6 1,4 1.//)1$$2)') +/.:#)0' 7%$2 5/),$)/ ,5%#%$;6 ,4( %' %4 , :)$$)/ +.'%$%.4 $. 0%4%0%@) $2)"4%4$)4()( 1.4')F")41)' .- /"#)'< G/%9,$) 5.9)/4,41) .- 0"#$%&'%()(+#,$-./0' %41/),')' +#,$-./0 9,#") $. 1.4'$%$")4$ 1.00"4%$%)' ,4( -,1%#%$,$)'5/.7$26 ()9)#.+0)4$6 ,4( %44.9,$%.4< =2)') :)4)-%$' .- +/%9,$) 5.9)/4,41)'2."#( 2,9) ,4 %0+./$,4$ +#,1) %4 $2) ,4,#;'%' .- ,4$%&1.0+)$%$%9) 12,/5)',5,%4'$ , +#,$-./0C' )--./$' $. 5.9)/4 %$' 1.00"4%$;<
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 489/512
P
u b l i c A u t h or i t yI n v ol v e m e n t i nP a ym e n t C a
r d M ar k e t s : V ar i o u s C
o un t r i e s
A u g u s t 2 0 1 4 U p d a t e †
P r e p ar e d b yF umi k oH a y a s h i an d J e s s e L e i gh M ani f f
P a ym e n t s S y s t e mR e s e ar c h D e p
ar t m e n t
F e d e r al R e s e r v e B ank of K an s
a s Ci t y
† T h e or i gi n a l t a b l e s a p p e a r e d i nBr a d f or d ,T e r r i a n d F umi k oH a y a s h i .2 0 0 8 .“ D e v e l o pm e n t s i nI n t e r c h a n g e F e e s i n Uni t e d S t a t e s a n d A b r o a d ,” F e d e r a l R e s e r v e
B a nk of K a
n s a s C i t yP a ym e n t s S y s t e mR e s e a r c h B r i e f i n g ,A pr i l i s s u e . J e a nAl l i x a n d Al a nF r a n
k e l pr o vi d e d h e l pf ul c omm e n t s f or t h i s u p d a t e .
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 490/512
1 .I n t e r c h an g e an d M e r c h an t S e r vi c e F e e s
a .A c t i o n s t a k e n b y p u b l i c a u t h or i t i e s
C o un t r y
C r e d i t C a r d
D e b
i t C a r d
Ar g e n t i n a
1 9 9 9 : L a w2 5 . 0 6 5 f or C r e d i t C a
r d s i s e n a c t e d .T h e l a w e s t a b l i s h e s n or m s t h a t r e g ul a t e v a r i o u s a s p e c t s r e l a t e d
t o t h e c r e d i t , d e b i t ,
a n d r e t a i l c a r d s y s t e m s .Am on g
t h e s e n or m s i s t h e s e t t i n g of l i mi t s on t h e a b i l i t y t oi m pl e m e n t pr i c e d i s c r i mi n
a t i oni nm e r c h a n t
f e e s .
2 0 0 5 : L a w2 5 . 0 6 5 i s a m e n d e d w
i t h L a w2 6 . 0 1 0 , wh i c h r e q ui r e s m e r c h
a n t a c q ui r e r s t o c h a r g e t h e s a m e m e r c h
a n t d i s c o un t r a t e t o
b u s i n e s s e s wi t h i n t h e s a m e c a t e g or y .T h e m a xi m umm e r c h a n t d i s c o un t r a t e i s s e t a t 3 %f or c r e d i t c a r d s a n d 1
. 5 %f or d e b i t c a r d s .
A u s t r a l i a
2 0 0 3 : T h e R e s e r v e B a nk of A u s
t r a l i a ( RBA ) m a n d a t e s
B a nk c a r d ,M a s t e r C a r d , a n d Vi s a t o s e t i n t e r c h a n g e f e e s on a
c o s t - b a s e d b e n c h m a r k .
2 0 0 9 : RBA c on t i n u e s i n t e r c h a n g e r e g ul a t i on .
2 0 0 6 : RBAi n t r o d u c e s i n t e r c h a n g e s t a n d a r d s f or t h e E F T P O S
a n d
Vi s a D e b i t s y s t e m s .
2 0 0 9 : RBAr e vi s e s E F T P O S i n t e r c h a n g e f e e s t a n d a r d f or
m ul t i l a t e r a l i n t e r c h a n g e f e e s .
2 0 1 3 : RBAi m pl e m e n t s t h e n e wE F T P O S i n t e r c h a n g e f e e
s t a n d a r d s .
A u s t r i a
( E ur o p e a n
U n i o n ( E U
)
m e m b er s i n c e
1 9 9 5 )
2 0 0 3 : T h e A u s t r i a n C a r t e l C o ur t f i n e s E ur o p a yA u s t r i a , wh or un s M a e s t r o d e b i t c a r d p a ym e n t s y s t e m .T h e C o ur t d e c l a r e s t h a t
E ur o p a yf or m e d a ni l l e g a l c a r t e l wi t h a l m o s t a l l A u s t r i a n b a nk s wi t h r e s p e c t t o a pr o vi s i oni n t h e p a ym e n t c a r d c on t r a c t a n d h e l d
i n t e r c h a n g e f e e s e x c e s s i v e l yh i g
h , wh i c h t h e C o ur t vi e w s a s a n a b u s e o
f E ur o p a y’ s d omi n a n t p o s i t i on .
2 0 0 6 : F ol l o wi n g t h e E ur o p e a n C
ommi s s i on’ s i n t e r i mr e p or t s on t h e r e t a i l b a nk i n gi n d u s t r y ,A u s t r i a n b a nk s a gr e e t or e vi e w
a r r a n g e m e n t s f or s e t t i n gi n t e r c h a n g e f e e s a n d a nn o un c e t h a t a r e d u c t i on c a n b e e x p e c t e d .T h e y wi l l a l s o t a k e
s t e p s t of o s t e r
g e n ui n e c om p e t i t i oni n a c q ui r i n g b e t w e e nE ur o p a yA u s t r i a a n d Vi s a A
u s t r i a .
2 0 0 7 : E ur o p a y a p p e a l s t o t h e A u s t r i a n S u pr e m e C o ur t .T h e S u pr e m e C
o ur t c onf i r m s t h e C a r t e l C o ur t ’ s j u d gm
e n t a n d i n c r e a s e s
t h e f i n e f r om ! 5 mi l l i on t o ! 7 m
i l l i on ,n o t i n g“ un d u e e nr i c h m e n t ” a c c r
u e d t oE ur o p a yA u s t r i a d ur i n g t h e t i m e of t h e
a n t i c om p e t i t i v e b e h a vi or .
B e l gi um
( E U1 9 5 2 )
2 0 0 6 : T h e B e l gi a n C om p e t i t i on
C o un c i l a c c e p t s c ommi t m e n t s of f e r e d
b yB a nk s y s t oh a v e t h e i n v e s t i g a t i on ( wh i c h b e g a ni n
2 0 0 0 ) of i t s a l l e g e d l y a b u s i v e c o
n d u c t i n e l e c t r oni c p a ym e n t s e r vi c e s a
n d d e b i t c a r d t e r mi n a l s m a r k e t s c l o s e d
.T h e c ommi t m e n t s
i n c l u d e s e p a r a t e c on t r a c t s f or a c
q ui r i n g s e r vi c e s a n d t e r mi n a l s ,r e l a x a t i on of e xi t t e r m s f or t e r mi n a l r e n t a l a gr
e e m e n t s , a n d a
n um b e r of pr i c e r e d u c t i on s .
Br a zi l
2 0 0 6 : I nM a y ,B a n c o C e n t r a l d o
Br a s i l ( t h e C e n t r a l B a nk of Br a zi l ) i s s
u e s Di r e c t i v e 1 / 2 0 0 6 , wh i c h f o c u s e s t h
e p a ym e n t c a r d s
i n d u s t r y .T h e Di r e c t i v e d o e s n o t e s t a b l i s h e i t h e r o b l i g a t i on s or pr oh i b i t i on s a n d d o e s n o t m a n d a t e a n y s a n c t i o
n s .I n J un e ,B a n c o
C e n t r a l d oBr a s i l ’ s E c on omi c L a w Of f i c e a n d t h e S e c r e t a r i a t f or E c on omi c M oni t or i n g a gr e e t o c o o p e r a t e i n
or d e r t o c ol l e c t
p a ym e n t c a r d i n d u s t r y d a t a a n d
t o c o or d i n a t e p u b l i c p ol i c y a c t i on s .I n S e p t e m b e r , p a ym e n t c a r d i n d u s t r y d a t a
c ol l e c t i on b e gi n s .
2 0 0 9 : T h e Br a zi l i a n c om p e t i t i on
a u t h or i t yi n v e s t i g a t e s t h e a n t i - c om p e t i t i v e b e h a vi or of R e d e c a r d a n d Vi s a - C
i e l o a s a m e a n s of
r e d u c i n gm e r c h a n t d i s c o un t f e e s .
2 0 1 0 : B a n c o C e n t r a l d oBr a s i l p
u b l i s h e s R e p or t on t h e Br a zi l i a nP a ym
e n t C a r d I n d u s t r y .T h e S e c r e t a r i a t of E
c on omi c L a w
c on t i n u e s t oi n v e s t i g a t e t h e p o s s i b i l i t y of a vi ol a t i on of t h e e c on omi c o
r d e r d u e t o t h e a n t i - c om p e t i t i v e b e h a vi or of a c q ui r e r s .An
2
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 491/512
a gr e e m e n t i s s i gn e d i n wh i c h a c
q ui r e r s m a d e a c ommi t m e n t t o e n d e x c
l u s i vi t yi n t h e i r c r e d i t a n d d e b i t c a r d s c h e m e s .
2 0 1 1 : B a n c o C e n t r a l d oBr a s i l p
u b l i s h e s S t a t i s t i c a l U p d a t e on t h e Br a z
i l i a nP a ym e n t C a r d I n d u s t r y , wh i c h c o
n c l u d e s t h a t d e s pi t e
t h e e n d of e x c l u s i vi t y , t h e r e w a s n o s i gni f i c a n t c h a n g e i n t h e m a r k e t s h
a r e of t h e t w ol a r g e s t a c q ui r e r s ( Vi s a - C i e l o a n d R e d e c a r d ) .
C a n a d a
2 0 0 9 : I nM a r c h , t h e S e n a t e C om
mi t t e e onB a nk i n g ,T r a d e a n d
C omm e r c e a nn o un c e s t h a t i t wi l l m o v e f or w a r d wi t h a n
i n v e s t i g a t i on of C a n a d a ’ s c r e d i t
a n d d e b i t c a r d s y s t e m .I n J un e ,
t h e i n v e s t i g a t i onr e s ul t s a r e p u b l i s h e d a s a r e p or t .
2 0 1 4 : T h e F e d e r a l B u d g e t i n c l u d e s pr o vi s i on s t oh e l pl o w e r
c r e d i t c a r d a c c e p t a n c e c o s t s f or
m e r c h a n t s .
Mi d
1 9 9 0 ’ s : A c on s e n t or d e r f r om t h e C om
p e t i t i onB ur e a u of
C a n a d a a l l o w s I n t e r a c t o s e t i t s o wni n t e r c h a n g e f e e , b u t s i n c e
i t s e
s t a b l i s h m e n t ,I n t e r a c h a s s e t i t s i n t e r c h
a n g e f e e a t z e r o .
C h i l e
2 0 0 5 : T h e C h i l e a nAn t i t r u s t C o ur t a d mi t s a c om pl a i n t f i l e d b y t h e N a t i on a l E c on omi c P r o s e c u t or a l l e gi n g a b u s e of a d omi n a n t
p o s i t i on b yT r a n s b a nk , t h e a c q u
i r e r of a l l c r e d i t a n d d e b i t c a r d s i s s u e d
i n t h e c o un t r y .T h e C o ur t i m p o s e s a f i n e of a p pr oxi m a t e l y
$ 5 6 , 0 0 0 .T h e N a t i on a l E c on omi c P r o s e c u t or r e q u e s t s , a m on g o t h e r t h i n g s , t h e m o d i f i c a t i on of T r a n s b a nk ’ s pr i c e s t r u c t ur e i n s u c h
a w a y t h a t i t w o ul d b e p u b l i c , o b j e c t i v e , a n d b a s e d on c o s t s .A p a r t i a l un d e r s t a n d i n g b e t w e e n t h e p a r t i e s ,r e q u
i r i n gT r a n s b a nk t o
r e d u c e m e r c h a n t f e e c e i l i n g s a n d pr e s e n t a s e l f -r e g ul a t i n g pl a nf or s e t t i n g pr i c e s ,f i n a l l y s e t t l e s t h e i s s u e .
C h i n a
2 0 0 2 : T h e P e o pl e ’ s B a nk of C h i n a s e t s t h e m a xi m umm e r c h a n t f e e r a t e s a n d t h e d i vi s i on of t h e m e r c h a n t f e e
wh i c h c on s i s t s of
t h e i n t e r c h a n g e f e e , s wi t c h f e e , a n d m e r c h a n t a c q ui r e r f e e s ( s o c a l l e d t h e 8 : 1 : 1 r ul e ) .
2 0 1 1 : T h e C h i n e s e Mi ni s t r y of C omm e r c e pr o p o s e s a c a p oni n t e r c h a n
g e f e e s – 0 . 3 % of t h e s a l e u p t o1 0 0 y u
a n ( U S $ 1 5 or 1 2
e ur o ) .T h e pr o p o s a l a l s oi n c l u d e
s a c a pf or s wi t c h f e e s : C h i n a Uni onP a
y ( t h e c o un t r y’ s onl y c a r d n e t w or k ) c a
nn o t c h a r g e
m e r c h a n t s m or e t h a n 0 . 0 5 % on c r e d i t c a r d s a l e s wi t h a m a xi m um of 5 y u a n p e r t r a n s a c t i on .
2 0 1 2 : T h e S t a t e C o un c i l a p pr o v e s a c h a n g e t o t h e d e c a d e - ol d s t a n d a r d s onm e r c h a n t f e e s wh i c h wi l l r e d u c e m
o s t m e r c h a n t f e e s
b y on e -f o ur t h or m or e e f f e c t i v e
F e b r u a r y2 5 ,2 0 1 3 .
C ol om b i a
2 0 0 4 : T h e S u p e r i n t e n d e n t of I n d u s t r y a n d C omm e r c e , C ol om b i a ’ s c om
p e t i t i on a u t h or i t y , p a s s e s t h e n e wI n t e r - b a nk E x c h a n g e
T a r i f f , a l l o wi n gm e r c h a n t s t on e
g o t i a t e f e e r a t e s wi t h m e r c h a n t a c q ui r e
r s .
2 0 0 6 : C r e d i b a n c o ( a Vi s a i s s u e r
) i s r e q ui r e d t o e x c l u d e c e r t a i n c o s t s i n
c l u d e d i ni t s f e e c om p u t a t i on t h a t w e r e
j u d g e d n o t t o
c or r e s p on d e x c l u s i v e l y t o p a ym e n t c a r d s e r vi c e s of f e r e d t om e r c h a n t s .
D e nm a r k
( E U1 9 7 3 )
1 9 9 0 : T h e A c t of C e r t a i nP a ym e n t I n s t r um e n t s s e t s a c a p on
m e r c h a n t s e r vi c e c h a r g e s ( M S C
) oni n t e r n a t i on a l l y- b r a n d e d
c r e d i t / d e b i t c a r d s i s s u e d b yD a n
i s h b a nk s f or d om e s t i c
t r a n s a c t i on s a t 0 . 7 5 % of t r a n s a c t i on v a l u e or 1 .2 5 % of
t r a n s a c t i on v a l u e wi t h a mi ni m u
m of DKK1 . 9 5 on t h e I n t e r n e t .
1 9 9 0 : T h e A c t of C e r t a i nP a ym e n t I n s t r um
e n t s s e t s D a nk or t
M S C t o b e z e r o .
2 0 0 3 : An a m e n d m e n t t o t h e A c t i n t r o d u c e s a p o s i t i v e M S C t o
D a n
k or t t r a n s a c t i on s a n d r e d u c e s t h e f e e s onM a e s t r o a n d Vi s a
E l e c
t r onf r om 0 . 7 5 % t o 0 .4 % , wi t h a m a xi m um of DKK4 .
2 0 0 5 : An a nn u a l f e e p e r r e t a i l e r r e pl a c e s D
a nk or t M S C .
E ur o p e a n
Uni on
2 0 0 2 : T h e E ur o p e a n C ommi s s i o
n ( E C ) r e a c h e s a n a gr e e m e n t wi t h Vi s a t or e d u c e i t s c r o s s - b or d e r i n t e r c h a n g e f e e s b yD e c e m b e r
2 0 0 7 .T h e b e n c h m a r k f or i t s i n t e r c h a n g e f e e s i s t o b e s e t a t t h e l e v e l of t h e c o s t of s u p pl yi n g Vi s a p a ym e n t s e
r vi c e s a n d c a nn o t
e x c e e d t h e c o s t of t h e s e r vi c e s w
h i c h i s s ui n g b a nk s pr o vi d e , wh ol l y or
p a r t l y , t o t h e b e n e f i t of m e r c h a n t s .
2 0 0 7 : I nD e c e m b e r ,E C r ul e s t h a t M a s t e r C a r d ’ s i n t e r c h a n g e f e e s a r e i l l e g a l .
2 0 0 8 : I nM a r c h ,M a s t e r C a r d f i l e s a n a p p e a l of t h e E C d e c i s i on .
2 0 0 9 : I nA pr i l ,E C a n d M a s t e r C
a r d r e a c h a ni n t e r i m a gr e e m e n t , s e t t i n g
M a s t e r C a r d i n t e r c h a n g e r a t e s a t , on a v e r a g e , 0 . 3 %f or
3
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 492/512
c r e d i t c a r d s a n d 0 .2 %f or d e b i t c a r d s ( e f f e c t i v e J ul y1 ,2 0 0 9 ) .E C a l s o s e n d s a S t a t e m e n t of O b j e c t i on s t o Vi s a a s s e r t i n gi t s
pr e l i mi n a r y vi e w t h a t m ul t i l a t e r a l i n t e r c h a n g e f e e s ( MI F s ) d i r e c t l y s e t b y Vi s a vi ol a t e E ur o p e a nAn t i t r u s t r ul e s ( Ar t i c l e 8 1 E C
T r e a t y a n d Ar t i c l e 5 3 E E AT r e a
t y ) .
2 0 1 0 : I nA pr i l , Vi s a E ur o p e pr o p o s e s t o c a
p t h e w e i gh t e d
a v e r a g e MI F f or c on s um e r i mm e d i a t e d e b i t c a r d t r a n s a c t i on s a t
0 .2 %
.T h e c a pi s a p pl i c a b l e t o c r o s s - b or d e r t r a n s a c t i on s wi t h i n
E E A
a n d , s e p a r a t e l y , t o d om e s t i c t r a n s a c t i on s i n e a c h E E A
c o un t r y wh e r e MI F s a r e e i t h e r s e t d i r e c t l y
b y Vi s a E ur o p e
( Gr e e c e ,H un g a r y ,I c e l a n d ,I r e l a n d ,I t a l y ,L
ux e m b o ur g ,M a l t a ,
t h e N e t h e r l a n d s , a n d S w e d e n ) or t h e Vi s a E ur o p e c r o s s - b or d e r
r a t e s w o ul d a p pl y b y d e f a ul t .I nD e c e m b e r ,E C d r o p s i t s
i n v e
s t i g a t i oni n t oi n t e r c h a n g e f e e s f or i mm
e d i a t e d e b i t .
2 0 1 2 : I nM a y , t h e G e n e r a l C o ur
t of t h e E U c onf i r m s t h e E C ’ s 2 0 0 7 d e c i s i on pr oh i b i t i n gM a s t e r C a r d ’ s i n t e r c h a n g e f e e s .
M a s t e r C a r d h a s a p p e a l e d t h e r ul i n g t o t h e E ur o p e a n C o ur t of J u s t i c e a n d a d e c i s i oni s e x p e c t e d i n S e p t e m b e r
2 0 1 4 .I n J ul y , t h e
E ur o p e a n C ommi s s i on s u b mi t s a s u p pl e m e n t a r y s t a t e m e n t of o b j e c t i on
s t o Vi s a E ur o p e r e g a r d i n gi t s u s e of m
ul t i l a t e r a l
i n t e r c h a n g e f e e s i n t h e E E A .T h
e C ommi s s i on a l l e g e s t h a t t h e s e MI F s
r e s t r i c t c om p e t i t i on a n d p u t u p w a r d pr e s s ur e c on s um e r
pr i c e s .
2 0 1 3 : I nA pr i l , t h e E C o p e n s a f
or m a l i n v e s t i g a t i oni n t o wh e t h e r s e v e r a l of M a s t e r C a r d ’ s i n t e r - b a nk f e e s a n d
pr a c t i c e s vi ol a t e E U
a n t i t r u s t r ul e s .T h e pr o c e e d i n g s
i d e n t i f yM a s t e r C a r d ’ s i n t e r - b a nk f e e s on p a ym e n t s m a d e b y c a r d h ol d e r s f r om
n onE E A c o un t r i e s
a n d i t s c r o s s - b or d e r a c q ui r i n gr u
l e s a s i t e m s of p a r t i c ul a r c on c e r n .I n J ul y , t h e E C pr o p o s e s a r e g ul a t i on t o c a pi n t e r c h a n g e f e e s
f or f o ur - p a r t y s c h e m e c on s um e r
d e b i t a n d c r e d i t c a r d t r a n s a c t i on s a t 0 .2 % a n d 0 . 3 %r e s p e c t i v e l y .T h e s e c a p s
w o ul d i ni t i a l l y a p pl y
t o c r o s s - b or d e r t r a n s a c t i on s b u t
a f t e r t h e t r a n s i t i on p e r i o d , t h e y w o ul d a p pl y t o b o t h c r o s s - b or d e r a n d d om e s t i c t r a n s a c t i on s .
2 0 1 4 : I nF e b r u a r y , t h e E C r e n d e
r s l e g a l l y b i n d i n g t h e c ommi t m e n t s of f e r e d b y Vi s a E ur o p e t o c u t MI F ( t o 0 . 3 %f or c r e d i t a n d
0 .2 %f or d e b i t t r a n s a c t i on s ) a n d
r e f or mi t s r ul e s i n t h e 2 8 E U c o un t r i e s a n d I c e l a n d , N or w a y a n d L i e c h t e n s t e i n .A s of J a n u a r y1 ,
2 0 1 5 , Vi s a E ur o p e a l s o c ommi t s t o a l l o w c r o s s - b or d e r a c q ui r e r s t o of f e r e i t h e r t h e d om e s t i c d e b i t or c r e d i t M
I F a p pl i c a b l e a t t h e
m e r c h a n t ’ s l o c a t i on or a nMI F r a t e of 0 .2 %f or d e b i t c a r d t r a n s a c t i on s
a n d 0 . 3 %f or c r e d i t c a r d t r a n s a c t i on s ,
s u b j e c t t o c e r t a i n
c on d i t i on s .I nA pr i l , t h e E ur o p e a nP a r l i a m e n t a m e n d s t h e E C ’ s pr o p o s a l t o c a pi n t e r c h a n g e f e e s b y a p pl yi n g t h e r ul e s t o
c omm e r c i a l c a r d s ,r e m o vi n g t h e
d i s t i n c t i on b e t w e e n c r o s s - b or d e r a n d d om e s t i c p a ym e n t s s y s t e m s , a n d s e t t i n g a c a p of t h e l o w e r
of ! . 0 7 or 0 .2 %f or d e b i t c a r d p a ym e n t s .T h e a m e n d m e n t a l s o e x p a n d s
t h e s c o p e of t h e pr o p o s a l t oi n c l u d e t h
r e e - p a r t y s c h e m e s i f
t h e i r v ol um e e x c e e d s a t h r e s h ol d s e t b y t h e E ur o p e a n C ommi s s i on .
F r a n c e
( E U1 9 5 2 )
1 9 9 0 : T h e P a r i s Hi gh C o ur t r ul e
s t h a t m e t h o d s f or d e t e r mi ni n gi n t e r c h a n g e f e e s c o ul d b e a c c e p t e d i n a c c or d a
n c e wi t h t h e
C om p e t i t i on C o un c i l ’ s s t a t e m e n
t of o b j e c t i on s .
2 0 1 1 : I n J ul y , t h e F r e n c h C om p e t i t i onA u t h or i t y ( F C A ) c l o s e s i t s i n v e s t i g a t i on c on c e r ni n gi n t e r c h a n g e f e e s b
y a c c e p t i n g t h e
c ommi t m e n t s of f e r e d b y t h e Gr o u p e m e n t d e s C a r t e s B a n c a i r e s ( a s yn d
i c a t e of b a nk s i s s ui n g p a ym e n t c a r d s ) .
Am on g o t h e r
t h i n g s , t h e c ommi t m e n t i n c l u d e s a r e d u c t i oni n t h e i n t e r c h a n g e f e e s f r o
m 0 .4 7 % t o 0 . 3 % on a v e r a g e f or a l l c a
r d s .T h e p e r i o d of
t h e c ommi t m e n t s i s f o ur y e a r s b
e gi nni n g O c t o b e r 1 ,2 0 1 1 .D ur i n g t h i s
p e r i o d , a s t e e r i n g c ommi t t e e c h a r g e d b
y t h e F C A wi l l b e i n
c h a r g e of d e vi s i n g a m e t h o d ol o g y t or e vi s e f e e s a t t h e e x pi r a t i on of t h e
c ommi t m e n t s .T h e F C A t ur n s i t s a t t e n t i on t o t h e
4
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 493/512
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 494/512
f e e s f r om 0 . 8 7 5 % t o 0 . 7 % b y J u
l y2 0 1 4 .
I t a l y
( E U1 9 5 2 )
2 0 1 0 : T h e I t a l i a n C om p e t i t i onA
u t h or i t y ( I C A ) f i n e s M a s t e r C a r d a n d e i gh t b a nk s f or a l l e g e d l y u s i n gl i c e n s i n g a gr e e m e n t s t ok e e p
i n t e r c h a n g e f e e s h i gh a n d p a s s i n
g t h o s e c h a r g e s on t om e r c h a n t s .T h e or d e r r e q ui r e s M a s t e r C a r d t o pr o vi d e e c on omi c j u s t i f i c a t i on
f or i t s f e e s a n d b a nk s t or e vi s i t t
h e t e r m s of t h e i r c on t r a c t s wi t h m e r c h a n t s .M a s t e r C a r d a n d t h e b a nk s i n v ol v e
d a r e gi v e n 9 0 d a y s
t o s h o w t h a t t h e a l l e g e d l y a n t i - c
om p e t i t i v e a c t i vi t i e s h a v e c e a s e d .
2 0 1 0 : T h e I C A a c c e p t s c ommi t m e n t s of f e r
e d b y
P a g oBA N C OMAT ( t h e d omi n a n t I t a l i a nn e t w or k ) i nr e s p on s e
t o a ni n v e s t i g a t i on o p e n e d i n O c t o b e r 2 0 0 9
.T h e c ommi t m e n t s
a i m
t or e d u c e t h e l e v e l of m ul t i l a t e r a l i n t e r
c h a n g e f e e s ( MI F s )
f or n a t i on a l t r a n s a c t i on s u s i n gn a t i on a l P a g
oBA N C OMAT
b r a n
d e d d e b i t c a r d s a n d i n c l u d e : a 4 %r e d u
c t i on of MI F s , a
pl e d
g e t on o t i n c r e a s e MI F s i n t h e f u t ur e , a
n d a r e - d e f i ni t i on of
MI F
s i n a c c or d a n c e wi t h I C A .
2 0 1 4 : I nF e b r u a r y , t h e I C A c omm e n c e s a n
i n v e s t i g a t i oni n t o
wh e
t h e r C on s or t i umB a n c om a t ’ s d e c i s i on t o s e t i n t e r c h a n g e
f e e s
f or b i l l p a ym e n t t r a n s a c t i on s m a d e wi t h a P a g oB a n c om a t
d e b i t c a r d a t ! .1 0 p e r t r a n s a c t i oni s a vi ol a t i on of a n t i t r u s t l a w .
L a t vi a
( E U2 0 0 4 )
2 0 1 1 : T h e L a t vi a n C om p e t i t i on
C o un c i l d e c i d e s t h a t 2 2 c omm e r c i a l b a nk s h a v e i nf r i n g e d t h e C om p e t i t i onL a w b y p a r t i c i p a t i n gi n
m ul t i l a t e r a l i n t e r c h a n g e f e e a gr e
e m e n t s a n d i m p o s e s f i n e s on t h o s e b a nk s .
M e xi c o
2 0 0 6 : T h e B a nk of M e xi c o a n d t h e M e xi c a nB a nk e r s A s s o c i a t i on a gr e e t or e d u c e i n t e r c h a n g e f e e s .
N e t h e r l a n d s
( E U1 9 5 2 )
2 0 1 4 : M a s t e r C a r d pr omi s e s t h e
N e t h e r l a n d s A u t h or i t yf or
C on s um e r s a n d M a r k e t s ( A C M ) t or e d u c e i t s i n t e r c h a n g e f e e
r a t e f or d om e s t i c c r e d i t c a r d p a y
m e n t s f r om 0 . 9 % t o 0 . 7 %
( J un e 1 ,2 0 1 4 ) , 0 . 5 % ( J a n u a r y1 ,2 0 1 5 ) , a n d 0 . 3 % ( J a n u a r y1 ,
2 0 1 6 ) .
2 0 0 4 : T h e N e t h e r l a n d s C om p e t i t i onA u t h o
r i t y ( NM a ) f i n e s
I n t e r p a y , wh i c h o p e r a t e s t h e d e b i t c a r d s y s t e m , a n d m e m b e r
b a nk s f or c h a r gi n g e x c e s s i v e m e r c h a n t f e e s f or P I N d e b i t
t r a n s a c t i on s .
2 0 0 5 : NM a wi t h d r a w s t h e a c c u s a t i on a n d t h e f i n e i m p o s e d on
I n t e r p a y b u t u ph ol d s t h e f i n e on t h e b a nk s .
N e wZ e a l a n d
2 0 0 7 : P r o c e e d i n g s a r e i ni t i a t e d b y t h e N e wZ e a l a n d C omm e r c e
C ommi s s i on a g a i n s t Vi s a ,M a s t e r C a r d a n d m e m b e r i n s t i t u t i on s
of t h e t w o s c h e m e s , a l l e gi n g pr i c e -f i xi n gi n t h e s e t t i n g of
i n t e r c h a n g e f e e s .
2 0 0 9 : T h e C ommi s s i on a gr e e s w
i t h Vi s a ( onA u g u s t 1 2 ) a n d
M a s t e r C a r d ( onA u g u s t 2 4 ) t o s e t t l e c r e d i t c a r d i n t e r c h a n g e f e e
pr o c e e d i n g s .T h e a gr e e m e n t s r e q ui r e b o t h n e t w or k s t o a l t e r t h e
s c h e m e r ul e s i n N e wZ e a l a n d , a l l o wi n gm e r c h a n t s t o s ur c h a r g e ,
n on b a nk s t o b e c om e a c q ui r e r s , a n d c a r d i s s u e r s t oi n d i vi d u a l l y
s e t i n t e r c h a n g e f e e s ( t h e n e t w or k s s e t t h e m a xi m um
i n t e r c h a n g e f e e r a t e s ) .
6
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 495/512
N or w a y
T h e
g e n e r a l p o s i t i on of a u t h or i t i e s r e g a r d i n g t h e i n t r o d u c t i on of
n e w
p a ym e n t s y s t e m s i n N or w a yh a s b e e n
t h a t p a y e r s s h o ul d
c o v e r c o s t s .T h i s p o s i t i on c a n b e s e e n a s e a r l y a s t h e 1 9 7 4
r e p o
r t f r om t h e P a ym e n t S y s t e m s C ommi t t e e .
P a n a m a
2 0 0 3 -2 0 0 4 : Un d e r t h e 1 9 9 8 b a nk i n gl a w , t h e S u p e r i n t e n d e n t
of B a nk s i s s u e s r e g ul a t i on s f or b a nk s t h a t i s s u e a n d m a n a g e
c r e d i t c a r d s .T h e s e r e g ul a t i on s e
s t a b l i s h pr o c e d ur e s f or
a p pr o vi n g a c r e d i t c a r d a n d a u t h
or i z e t h e c h a r g e s f or
c ommi s s i on s a n d o t h e r r e l a t e d i t e m s .
P ol a n d
( E U2 0 0 4 )
2 0 0 7 : T h e P ol i s h Of f i c e of C om
p e t i t i on a n d C on s um e r P r o t e c t i on ( O C
C P ) or d e r s b a nk s t o d i s c on t i n u e t h e i r m
ul t i l a t e r a l
i n t e r c h a n g e f e e a gr e e m e n t s .
2 0 0 8 : I n N o v e m b e r , t h e C o ur t o
f C om p e t i t i on a n d C on s um e r P r o t e c t i o
n ( C C C P ) o v e r t ur n s t h e O C C P ’ s d e c i s i on oni n t e r c h a n g e
f e e s ,h ol d i n g t h a t t h e p a r t i c i p a t i on of 2 0 b a nk s i n a n a gr e e m e n t f i xi n g t h e f e e l e v e l s d o e s n o t c on s t i t u t e a ni nf r i n g e m e n t of t h e
C om p e t i t i onA c t i n t h e E ur o p e a n Uni on ( i . e . ,Ar t 8 1 .1 E C ) n or e q ui v a l e n t n a t i on a l pr o vi s i on .
2 0 1 0 : I nA pr i l , t h e C o ur t of A p p
e a l r e p e a l s t h e C C C P ’ s d e c i s i on a n d s u b mi t s i t b a c k t o C C C P f or r e vi e w .
2 0 1 2 : I nM a r c h , t h e N a t i on a l B a nk of P ol a n d ( NBP ) p u b l i s h e s P r o gr a m o f c ar d c h ar g e s r e d u c t i o n i nP o l a n d
wi t h t h e a i m of
l o w e r i n gi n t e r c h a n g e f e e s vi a a n on-r e g ul a t or y c om pr omi s e t o 0 . 7 0 %f
or d e b i t c a r d s a n d 0 . 8 4 %f or c r e d i t c a r d s b y2 0 1 7 .D u e t o
i n s uf f i c i e n t p a r t i c i p a t i on , t h e pr o p o s a l f a i l s b y J ul y , a n d t h e NBP t a k e s
s t e p s t ol o w e r r a t e s t h r o u gh t h e l e gi s l a t ur e i n s t e a d .
2 0 1 4 : I n J a n u a r y , a l a w g o e s i n t o e f f e c t t h a t a m e n d s t h e A c t onP a ym e n t S e r vi c e s t oi n c l u d e a m a xi m umi n t e r c h a n g e f e e of 0 . 5 %
on a l l P ol i s h p a ym e n t c a r d s .Af f e c t e d e n t i t i e s h a v e s i xm on t h s t o c om p
l y .
P or t u g a l
( E U1 9 8 6 )
2 0 0 6 : F ol l o wi n g t h e E ur o p e a n C
ommi s s i on’ s ( E C ) i n t e r i mr e p or t s on t h e r e t a i l b a nk i n gi n d u s t r y ,P or t u g u e s e
i s s u e r s a n d a c q ui r e r s
m e e t s om e of t h e E C ’ s c on c e r n s
b yr e d u c i n g d om e s t i c i n t e r c h a n g e f e e s a n d r e m o vi n g pr e f e r e n t i a l b i l a t e r a l d o
m e s t i c i n t e r c h a n g e
f e e s .
R om a ni a
( E U2 0 0 7 )
2 0 1 4 : T h e R om a ni a nMi ni s t r y of F i n a n c e pr o p o s e s c a p pi n g onm ul t i l a
t e r a l i n t e r c h a n g e f e e s a t 0 .2 %f or d e b i t c a r d s a n d a t 0 . 3 %
f or c r e d i t c a r d s .
S o u t h K or e a
2 0 0 5 : T h e K or e a nF a i r T r a d e C ommi s s i onr ul e s t h a t B C C a r d ’ s
( S o u t h K or e a ’ s f o ur - p a r t y s c h e m
e c r e d i t c a r d ) j oi n t pr i c i n g of
m e r c h a n t s e r vi c e c h a r g e s i s a c a
r t e l ,i m p o s e s a f i n e of 1 0 . 0 9 2
b i l l i onK or e a n w on , a n d i s s u e s c or r e c t i v e m e a s ur e s .
2 0 1 1 : T h e F i n a n c i a l S e r vi c e s C ommi s s i on ( F S C ) a nn o un c e s
c om pr e h e n s i v e m e a s ur e s t or e f o
r m t h e s t r u c t ur e of t h e c r e d i t
c a r d m a r k e t ,i n c l u d i n g t h e m e r c h a n t f e e s y s t e m . C a r d
c om p a ni e s a r e t o pr e p a r e a r e a s on a b l e s y s t e m b y t h e f i r s t h a l f
of 2 0 1 2 .
2 0 1 2 : T h e N a t i on a l A s s e m b l y a p pr o v e s T h e R e vi s i on of t h e
C r e d i t F i n a n c e L a w ( e f f e c t i v e i n J a n u a r y2 0 1 3 ) .Am on g o t h e r
t h i n g s , t h i s r e vi s i onr e q ui r e s c r e
d i t c a r d c om p a ni e s t o a p pl y
7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 496/512
s p e c i a l m e r c h a n t f e e r a t e s d e t e r mi n e d b yF S C t om e r c h a n t s
wi t h a nn u a l r e v e n u e u n d er a c e r
t a i nl e v e l ( d e t e r mi n e d b y
pr e s i d e n t i a l d e c r e e ) a n d t o pr o vi d e r e l e v a n t i nf or m a t i on t o
a u t h or i t i e s .
S p a i n
( E U1 9 8 6 )
2 0 0 5 : T h e S p a ni s h C om p e t i t i on
T r i b un a l d e ni e s a u t h or i zi n g t h e i n t e r c h a n g e f e e a r r a n g e m e n t s of t h e S p a ni s h
c a r d s c h e m e s .I n
D e c e m b e r , S p a ni s h c a r d n e t w or k s a n d m e r c h a n t s r e a c h a n a gr e e m e n t c
o or d i n a t e d b y t h e S p a ni s h Mi ni s t r y of I n d u s t r y ,T o ur i s m
a n d T r a d e f or i n t e r c h a n g e f e e s t o b e r e d u c e d i mm e d i a t e l y a n d pr o gr e s s i v e l y ( e f f e c t i v e i n N o v e m b e r 2 0 0 6 ) .
2 0 0 9 : T h e m a xi m uml i mi t s f or c r e d i t a n d d e b i t c a r d i n t e r c h a n g e f e e s a r e e x t e n d e d f or t h e 2 0 0 9 / 2 0 1 0 p e r i o d .T h e C o un c i l of t h e
N a t i on a l C om p e t i t i on C ommi s s i on ( C N C ) c on c l u d e s t h a t a p pl yi n g t h e
m a xi m uml i mi t s d e r i v e d f r om t h e c o s t s t u d i e s t oi n t r a -
s y s t e mi n t e r c h a n g e f e e s w o ul d n o t b e a p pr o pr i a t e .
2 0 1 0 : I nD e c e m b e r , t h e C N C C o un c i l d e c l a r e s t h e m oni t or i n g of t h e a gr e e m e n t c l o s e d t o t h e e x t e n t t h a t i t e x pi r e d onD e c e m b e r
3 1 ,2 0 1 0 . S i n c e J a n u a r y2 0 1 1 , S
p a ni s h c a r d s c h e m e s h a v e b e e nf r e e t o
d e c i d e u p on t h e l e v e l of d e f a ul t i n t e r c h a n g e f e e s , wh i l e
s t i l l e n d ur i n gm a xi m um t r a n s p a r e n c y .
2 0 1 4 : I n J ul y , t h e G o v e r nm e n t a
p pr o v e s c a p s oni n t e r c h a n g e f e e s .F or
a ! 2 0 or l e s s t r a n s a c t i on , t h e c a pi s s e t
a t 0 .1 %f or d e b i t
c a r d s a n d 0 .2 %f or c r e d i t c a r d s .
F or a h i gh e r v a l u e t r a n s a c t i on ( h i gh e r
t h a n ! 2 0 ) , t h e c a pi s s e t a t 0 .2 % or ! 0 . 0 7 , wh i c h e v e r i s l e s s ,
f or d e b i t c a r d s a n d 0 . 3 %f or c r e d i t c a r d s .T h e s e c a p s a p pl y t of o ur - p a r t y s c h e m e s onl y .T h e c a p s b e c om e e f f e c t i v e on S e p t e m b e r
1 ,2 0 1 4 .
S o u t h Af r
i c a
2 0 1 4 : Af t e r t h e 2 0 0 8 i n q ui r yr e p
or t t h a t r e c omm e n d e d i n t e r c h a n g e f e e
r e g ul a t i on , t h e S o u t h Af r i c a nR e s e r v e
B a nk d e t e r mi n e s t h e
l e v e l s of d e b i t a n d c r e d i t c a r d i n
t e r c h a n g e f e e s b a s e d on wh e t h e r t h e i s
s u e r a n d t h e a c q ui r e r of a gi v e n t r a n s a c t i on a r e a c om pl i a n t
of E M V ( f or c a r d - pr e s e n t ) a n d 3
D s e c ur e ( f or c a r d -n o t - pr e s e n t ) .T h e s e
r a t e s b e c om e e f f e c t i v e on J a n u a r y1 ,2
0 1 5 .
S wi t z e r l a n d
2 0 0 5 : T h e S wi s s C om p e t i t i on C
ommi s s i on a n d c r e d i t c a r d
i s s u e r s a gr e e t or e d u c e i n t e r c h a n g e f e e s f r om1 . 6 5 -1 . 7 0 % t o
1 . 3 0 -1 . 3 5 % .
2 0 0 9 : T h e C ommi s s i on a g a i n o p e n s a ni n v e s t i g a t i oni n t o
i n t e r c h a n g e f e e s f or Vi s a a n d M
a s t e r C a r d c r e d i t c a r d s .
2 0 1 0 : T h e C ommi s s i on s e t s t h e
m a xi m umi n t e r c h a n g e f e e f or
2 0 1 0 a t 1 . 0 5 8 % .
2 0 1 1 : T h e C ommi s s i onr e d u c e s
t h e m a xi m umi n t e r c h a n g e f e e
t o 0 . 9 9 0 %f or 2 0 1 1 .
2 0 0 9 : T h e C ommi s s i on o p e n s a pr e l i mi n a r yi n v e s t i g a t i oni n t o
M a e
s t r o’ s i n t r o d u c t i on of a ni n t e r c h a n g e f e e .
2 0 1 0 : T h e C ommi s s i on o p e n s a pr e l i mi n a r yi n v e s t i g a t i oni n t o
“ D e b i t M a s t e r C a r d ’ s ” i n t r o d u c t i on of a d om e s t i c f a l l b a c k
i n t e r c h a n g e f e e .
2 0 1 1 : T h e S e c r e t a r i a t of t h e C om p e t i t i on C
ommi s s i on c l o s e s
pr e l i mi n a r yi n v e s t i g a t i on s .I t c on c l u d e s t h a t a ni n t e r c h a n g e f e e
f or M a e s t r o c a r d t r a n s a c t i on s c o ul d vi ol a t e
t h e A c t on C a r t e l s
wh i l e a ni n t e r c h a n g e f e e f or D e b i t M a s t e r C
a r d mi gh t b e
p o s s i b l e wi t h i n c e r t a i nl i mi t s , e . g . ,i t s m a r k
e t s h a r e r e m a i n s
b e l o
w1 5 % a n d t h e i n t e r c h a n g e f e e i s , on a
v e r a g e ,n om or e t h a n
0 .2 0
S wi s s f r a n c s p e r t r a n s a c t i on .
T ur k e y
2 0 0 5 : T h e T ur k i s h C om p e t i t i on
A u t h or i t y ( T C A ) m a k e s a d e c i s i on on
I n t e r b a nk C a r d C e n t r e ( BKM ) ’ s c l e a r i n g c ommi s s i onr a t e
b ym e m b e r b a nk s .T h e d e c i s i on
s t a t e s t h a t ,i n or d e r t o gr a n t e x e m p t i on
t o t h e c l e a r i n g c ommi s s i onf or m ul a pr o p o s e d b y t h e
c on s ul t a n c yf i r m on b e h a l f of BKM , t h e f or m ul a m u s t b e a d j u s t e d f or c e r t a i n c o s t i t e m s .
2 0 0 9 : BKMr e q u e s t s a ni n d e f i ni t e e x e m p t i onf or s e t t i n g j oi n t i n t e r c h a n
g e c ommi s s i onr a t e s f or c r e d i t c a r d b u
t t h e T C A d e c i d e s
t h a t a ni n d i vi d u a l e x e m p t i onmi gh t b e gr a n t e d t o t h e j oi n t r a t e s f or t h r e
e y e a r s i f c e r t a i n c on d i t i on s a r e m e t .
8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 497/512
Uni t e d S t a t e s
2 0 1 1 : T h e F e d e r a l R e s e r v e B o a r d s e t s t h e d e b i t c a r d
i n t e r c h a n g e f e e s t a n d a r d s f or r e g ul a t e d b a n
k s wh o s e a s s e t s i z e
e x c e e d s $ 1 0 b i l l i on ( a t t h e b a nk h ol d i n g c o
m p a n yl e v e l ) .D e b i t
c a r d
s i s s u e d b y b a nk s wi t h l e s s t h a n $ 1 0 b i l l i oni n a s s e t s a n d
r e l o a d a b l e pr e p a i d c a r d s a r e e x e m p t e d f r om
t h e i n t e r c h a n g e f e e
s t a n d a r d s .
( T h i s r e g ul a t i oni s t h e s u b j e c t of c ur r e n t l i t
i g a t i on ) .
V e n e z u e l a
2 0 0 8 : I nD e c e m b e r ,R e s ol u c i ó n
Nº 0 8 -1 2 - 0 1 i s p a s s e d ( e f f e c t i v e J a n u a
r y2 0 0 9 ) wh i c h s t a t e s t h a t t h e B o a r d of t h e C e n t r a l B a nk of
V e n e z u e l a wi l l s e t l i mi t s onm e r c h a n t d i s c o un t r a t e s a n d t r a d e c ommi s s i on s f or p a ym e n t s m a d e b y d e b i t a n d c r e d i t f or e a c h
m e r c h a n t c a t e g or y ; t h e s e r a t e s w
i l l b e r e vi e w e d a nn u a l l y .
b .I n v e s t i g a t i o n s i n i t i a t e d
C o un t r y
C r e d i t
D e b
i t
E s t oni a
( E U2 0 0 4 )
2 0 1 2 : T h e E s t oni a n C om p e t i t i onA u t h or i t y t e r mi n a t e s t h e pr o c e e d i n g s
of t h e i n t e r c h a n g e f e e s f or c a r d p a ym e
n t s a f t e r a n um b e r of
r e d u c t i on s i ni n t e r c h a n g e f e e s m
a d e b y b a nk s .
F i nl a n d
( E U1 9 9 5 )
Mi d 2 0 0 0 s : T h e F i nni s h C om p e t i t i onA u t h or i t yl a un c h e s a n
i n v e s t i g a t i oni n t oi n t e r c h a n g e f e
e s onE M V c a r d s ( 0 . 3 1 % ) .
T r a d i t i on a l m a gn e t i c s t r i p e c a r d
s c h a r g e m e r c h a n t s b e t w e e n
z e r o t o 0 . 0 5 e ur o p e r t r a n s a c t i on
.
G e r m a n y
( E U1 9 5 2 )
2 0 0 6 : T h e B un d e s k a r t e l l a m t ( t h e c om p e t i t i on a u t h or i t yi n
G e r m a n y ) r e c e i v e s a l e g a l c om p
l a i n t f r om t h e G e r m a nR e t a i l
A s s o c i a t i on , a l l e gi n g t h a t f e e s c h a r g e d t om e r c h a n t s f or
M a s t e r C a r d a n d Vi s a t r a n s a c t i on s , wh i c h a v e r a g e 1 5 0 b a s i s
p oi n t s , pr e v e n t wi d e s pr e a d c r e d i t c a r d a c c e p t a n c e i n G e r m a n y .
N or w a y
2 0 0 4 : On t h e i ni t i a t i v e of t h e Mi ni s t r y of F i n a n c e ,
Kr e d i t t i l s yn e t ( t h e f i n a n c i a l s u p e r vi s or y a u t h or i t y ) e s t a b l i s h e s a
pr o j e c t gr o u p t or e p or t on c om p e t i t i v e c on d i t i on s i n t h e
N or w e gi a nm a r k e t f or i n t e r n a t i o
n a l p a ym e n t s a n d c h a r g e c a r d s .
2 0 0 5 : N or g e s B a nk ( t h e c e n t r a l
b a nk of N or w a y ) s t a t e s i ni t s
2 0 0 5 Ann u a l R e p or t t h a t t h e r e g
ul a t i on of i n t e r c h a n g e f e e s i s
a l s o b e i n g c on s i d e r e d .
R om a ni a
( E U2 0 0 7 )
2 0 1 1 : T h e R om a ni a n C om p e t i t i on C o un c i l ( R C C ) o p e n s a s e c t or i n q ui r y , t a r g e t i n gf o ur m a i n a r e a s ,i n c l u d i n g
s e t t i n g t h e
i n t e r c h a n g e f e e s on p a ym e n t c a r d s .
2 0 1 3 : T h e R C C p u b l i s h e s t h e r e
p or t of t h e i n q ui r y a n d f i n d s t h e i n t e r c h a n g e f e e s of Vi s a a n d M a s t e r C a r d a r e
h i gh e r i nR om a ni a
9
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 498/512
t h a n t h o s e i n o t h e r E ur o p e a n c o un t r i e s .
S i n g a p or e
2 0 1 3 : T h e C om p e t i t i on C ommi s s i on of S i n g a p or e ( C C S ) c on c l u d e s t h a t Vi s a ’ s m ul t i l a t e r a l i n t e r c h a n g e f e e s c h e m e d o e s n o t
vi ol a t e S i n g a p or e ’ s C om p e t i t i on
A c t .
S o u t h Af r
i c a
2 0 0 4 : T h e T a s k Gr o u pf or t h e N
a t i on a l T r e a s ur y a n d t h e S o u t h Af r i c a nR e s e r v e B a nk r e c omm e n d s t h a t t h e C
om p e t i t i on
C ommi s s i oni n v e s t i g a t e t h e p o s s i b i l i t y of a c om pl e xm on o p ol yi n t h e g o v e r n a n c e a n d o p e r a t i on of t h e n a t i on a l p a ym e n t s y s t e m .
2 0 0 6 : F ol l o wi n g t h e f i n d i n g s i n
t h e r e p or t T h e N a t i o n a l P a y m e n t S y s t e m a n d C o m p e t i t i o n i n t h eB a n k i n g S e c t or , t h e C ommi s s i on
b e gi n s a p u b l i c i n q ui r yi n t o b a nk c h a r g e s a n d a c c e s s t o t h e p a ym e n t s y
s t e m .
2 0 0 8 : I nD e c e m b e r , t h e i n q ui r y
r e p or t i s p u b l i s h e d ,r e c omm e n d i n gr e g
ul a t i oni n t h e s e t t i n g of i n t e r c h a n g e f e e s .
Uni t e d
Ki n g d om
( E U1 9 7 3 )
2 0 0 5 : I n S e p t e m b e r , t h e Of f i c e of F a i r T r a d i n g ( OF T ) f i n d s t h a t
M a s t e r C a r d ’ s i n t e r c h a n g e f e e a r
r a n g e m e n t s a r e i l l e g a l .I n
O c t o b e r , t h e OF T i s s u e s a s t a t e m
e n t of o b j e c t i on s a g a i n s t Vi s a
r e g a r d i n gi t s a gr e e m e n t onm ul t i l a t e r a l i n t e r c h a n g e f e e s .
2 0 0 6 : I nF e b r u a r y , OF T l a un c h e
s a n e wi n v e s t i g a t i on a g a i n s t
M a s t e r C a r d .I n J un e , t h e OF T ’ s
f i n d i n g onM a s t e r C a r d i s
a p p e a l e d a n d OF T c on s e n t s t oi t s d e c i s i on b e i n g s e t a s i d e b y
t h e C om p e t i t i onA p p e a l T r i b un a l , d u e t o a c h a n g e m a d e b y
M a s t e r C a r d i n s e t t i n gi n t e r c h a n g e f e e s . OF T r e f o c u s e s on c r e d i t
c a r d i n t e r c h a n g e f e e s s e t b yM a s t e r C a r d a n d Vi s a .
2 0 0 7 : OF T e x p a n d s t h e s c o p e of i t s i n v e s t i g a t i oni n t o
i n t e r c h a n g e f e e s t oi n c l u d e i mm e d i a t e d e b i t c a r d s .
2 0 1 2 : T h e UK g o v e r nm e n t s u b m
i t s a r e s p on s e t o t h e C o ur t of J u s t i c e i n s u p p or t of t h e E ur o p e a n C ommi s s i on
’ s d e c i s i on a n d t h e
G e n e r a l C o ur t j u d gm e n t ( r e g a r d
i n gM a s t e r C a r d ) .
A n n e x .Z e
r o i n t e r c h a n g e f e e s c h e m e s
C ur r e n t Z e r oI n t e r c h a n g e F e e S c h e m e
C a n a d a
I n t e r a c ( d e b i t )
D e nm a r k
( E U1 9 7 3 )
D a nk or t ( d e b i t )
N e wZ e a l a n d
E F T P O S ( d e b i t )
N or w a y
B a nk -Ax e p t ( d e b i t )
P r e vi o u s Z e r oI n t e r c h a n g e F e e S c h e m e
B e l gi um
( E U1 9 5 2 )
2 0 0 7 : B a n c on t a c t / Mi s t e r C a s h
( d e b i t ) i n t r o d u c e s e x pl i c i t i n t e r c h a n g e
f e e s .
F i nl a n d
( E U1 9 9 5 )
2 0 1 1 : P a nk k i k or t t i ( d e b i t ) ph a s e s o u t a t t h e y e a r - e n d .
G e r m a n y
2 0 0 6 : P OZ ( d e b i t ) ph a s e s o u t .
1 0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 499/512
( E U1 9 5 2 )
2 0 1 3 : E L V’ s ( d i r e c t d e b i t ) ph a s e o u t i nF e b r u a r y2 0 1 6 i s pl a nn e d .
L ux e m b o ur g
( E U1 9 5 2 )
2 0 1 1 : B a n c om a t ( d e b i t ) ph a s e s o u t a t t h e y e a r - e n d .
N e t h e r l a n d s
( E U1 9 5 2 )
2 0 0 6 : P I N ( d e b i t ) i n t r o d u c e s e
x pl i c i t i n t e r c h a n g e f e e s .
2 0 1 1 : P I N b r a n d i s d i s c on t i n u e d .
1 1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 500/512
2 . S ur c h
ar g e s an d Di s c o un t s ( A c t i on s t ak e n
b y p u b l i c a u t h or i t i e s )
C o un t r y
C r e d i t
D e b i t
A u s t r a l i a
2 0 0 3 : P r oh i b i t i on on s ur c h a r gi n gi s l i f t e d .
2 0 1 2 : T h e R e s e r v e B a nk
of A u s t r a l i a c h a n g e s t h e
s ur c h a r gi n g S t a n d a r d s , w
h i c h a l l o w s c r e d i t a n d s c h e m e d e b i t
c a r d n e t w or k s t o c a p t h e
a m o un t of s ur c h a r g e s a t a m o un t s
r e a s on a b l yr e l a t e d t om e r c h a n t s ’ c o s t of c a r d a c c e p t a n c e
( e f f e c t i v e i nM a r c h 2 0 1 3
) .
2 0 0 6 : P r oh i b i t i on on s ur c h a r gi n gi s l i f t e d f or Vi s a a n d
M a s t e r C a r d s i gn a t ur e d e b i t c a r d t r a n s a c t i on s .
A u s t r i a
( E U1 9 9 5 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d b u t of f e r i n g d i s c o un t s i s a
l l o w e d .
B e l gi um
( E U1 9 5 2 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
B ul g a r i a
( E U2 0 0 7 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d , b u t t h e p a ym e n t i n s t r um e n t s f or wh i c h s ur c h a r g e s m a y b e r e q u e s t e d a r e s p e c i f i e d .
C a n a d a
1 9 9 6 : T h e b a n on s ur c h a r gi n gf or I n t e
r a c t r a n s a c t i on s i s
l i f t e d t h r o u gh a c on s e n t or d e r b y t h e C
om p e t i t i onB ur e a u
of C a n a d a .
2 0 1 0 : T h e Mi ni s t r y of F i n a n c e ’ s c o d e of c on d u c t f or c r e d i t a n d
d e b i t c a r d s r e q u e s t s t h a t p a ym e n t c a r d
n e t w or k r ul e s e n s ur e
t h a t m e r c h a n t s a r e a l l o w e d t o pr o vi d e d i s c o un t s f or d i f f e r e n t m e t h o d s of p a ym e n t .
2 0 1 3 : T h e C om p e t i t i onT
r i b un a l d i s mi s s e s t h e c a s e b r o u gh t i n2 0 1 0 b y t h e C ommi s s i on e r of C om p e t i t i on a g a i n s t
M a s t e r C a r d a n d Vi s a o v e r n o- s ur c h a r g e r ul e a n d n o t e s t h a t t h e pr o p e r s ol u t i on t o t h e i s s u e i s a r e g ul a t or yf r a m e w or k .
C y pr u s
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d , b u t t h e p a ym e n t i n s t r um e n t s f or wh i c h s ur c h a r g e s m a y b e r e q u e s t e d a r e s p e c i f i e d .
C z e c h R e p u b l i c
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
D e nm a r k
( E U1 9 7 3 )
2 0 1 1 : I n O c t o b e r , t h e pr o
h i b i t i on on s ur c h a r gi n gf or
d om e s t i c c r e d i t c a r d s i s l
i f t e d .
E s t oni a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
E ur o p e a n
Uni on
2 0 0 7 : T h e P a ym e n t S e r vi c e s Di r e c t i v e ( P S D ) d o e s n o t a l l o w p a
ym e n t s e r vi c e pr o vi d e r s t o pr e v e n t t h e
p a y e e f r om
r e q u e s t i n gf r om t h e p a y e
r a c h a r g e or f r om of f e r i n gh i m a r e d u c t i onf or t h e u s e of a gi v e n p a ym e n t i n s t r um e n t .H o w e v e r ,
t h e P S D a l l o w s M e m b e r
S t a t e s t of or b i d or l i mi t t h e r i gh t t or e q
u e s t c h a r g e s , t a k i n gi n t o a c c o un t t h e n e e d t o e n c o ur a g e
c om p e t i t i on a n d pr om o t e
t h e u s e of e f f i c i e n t p a ym e n t i n s t r um e n t s .
2 0 0 9 -2 0 1 0 : T h e P S Di s i m pl e m e n t e d i n t on a t i on a l l a w .
2 0 1 3 : T h e E ur o p e a n C om
mi s s i on pr o p o s e s r e vi s i on s t o t h e P a ym e n t S e r vi c e s Di r e c t i v e ( P S D2 ) , wh i c h b a n s s ur c h a r g e s on
t h e i n t e r c h a n g e -f e e -r e g ul a t e d c a r d s b u t a l l o w s s ur c h a r g e s onn o
n-r e g ul a t e d c a r d s ( e . g . , c or p or a t e c a r d s a n d t h r e e - p a r t y
1 2
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 501/512
s c h e m e c a r d s ) .
F i j i
2 0 1 2 : Af t e r s e v e r a l m e r c
h a n t s w e r e f o un d t o b e a p pl yi n g s ur c h a r g e s t o c r e d i t c a r d u s e r s d e s pi t e t h e pr a c t i c e b e i n g
pr oh i b i t e d b yF i j i ’ s M e r c
h a n t S e r vi c e s A gr e e m e n t , t h e R e s e r v e
B a nk of F i j i i n t e r v e n e s b y u ph ol d i n g t h e “ N o S ur c h a r g e
R ul e ” f or b o t h c r e d i t a n d
d e b i t c a r d p a ym e n t s e f f e c t i v e N o v e m b e r 1 ,2 0 1 2 .
F i nl a n d
( E U1 9 9 5 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d b u t t h e a m o un t s of s ur c h a r g
e s a r e r e q ui r e d t o b e r e a s on a b l e a n d n o
t t o e x c e e d t h e
p a y e e ’ s a c t u a l c o s t s .
F r a n c e
( E U1 9 5 2 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
G e r m a n y
( E U1 9 5 2 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
Gr e e c e
( E U1 9 8 1 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
H un g a r y
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d , b u t t h e p a ym e n t i n s t r um e n t s f or wh i c h s ur c h a r g e s m a y b e r e q u e s t e d a r e s p e c i f i e d .
I r e l a n d
( E U1 9 7 3 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
I s r a e l
1 9 9 3 : T h e b a n on s ur c h a r gi n gi s l i f t e d .
A s of 2 0 0 5 ,m o s t m e r c h a
n t s d on o t s ur c h a r g e ; s om e d e e p d i s c o un t r e t a i l e r s of f e r c a s h d i s c o un t s .
I t a l y
( E U1 9 5 2 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , a n d of f e r i n g d i s c o un t s i s
l i mi t e d t o c e r t a i n p a ym e n t i n s t r um e n t s
.
L a t vi a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
L i t h u a ni a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
L ux e m b o ur g
( E U1 9 5 2 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
M a l t a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s n o t pr oh i b i t e d .
M e xi c o
1 9 9 3 : T h e M e xi c a n C om
p e t i t i on C ommi s s i onr e a c h e s a n a gr e e m e n t wi t h a n um b e r of b a nk s ,f or b i d d i n g t h e mf r om
pr oh i b i t i n gm e r c h a n t s f r om of f e r i n g d i s c o un t s f or c a s h p a ym e n t s i n t h e i r a c q ui r i n g c on t r a c t s .
N e t h e r l a n d s
( E U1 9 5 2 )
1 9 9 7 : T h e b a n on s ur c h a r gi n gi s l i f t e d .
N e wZ e a l a n d
2 0 0 9 : A gr e e m e n t s b e t w e
e n t h e C omm e r c e C ommi s s i on a n d Vi s a / M a s t e r C a r d r e q ui r e Vi s a / M a s t e r C a r d t o a l l o wm e r c h a n t s
t o s ur c h a r g e .
P ol a n d
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
P or t u g a l
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d , b u t t h e a m o un t of s ur c h a r g e s i s d e t e r mi n e d e i t h e r b yl e gi s l a t i on or t h e p a y e e .
1 3
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 502/512
( E U1 9 8 6 )
R om a ni a
( E U2 0 0 7 )
A s of 2 0 1 1 , s ur c h a r gi n gi s pr oh i b i t e d , b u t of f e r i n g d i s c o un t s i s a l l o w e d .
S l o v a k i a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n g a n d of f e r i n g d i s c o un t s a r e l i mi t e d t o c e
r t a i n p a ym e n t i n s t r um e n t s .
S l o v e ni a
( E U2 0 0 4 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
S p a i n
( E U1 9 8 6 )
A s of 2 0 1 1 , s ur c h a r gi n gi s a l l o w e d .
S w e d e n
( E U1 9 9 5 )
1 9 9 5 : T h e b a n on s ur c h a r gi n gi s l i f t e d .
A s of 2 0 1 1 , s ur c h a r gi n gi s g e n e r a l l y pr oh i b i t e d b u t of f e r i n g d i s c o un t s i s a l l o w e d .
S wi t z e r l a n d
2 0 0 5 : T h e b a n on s ur c h a r gi n gi s l i f t e d .
Uni t e d Ki n g d om
( E U1 9 7 3 )
1 9 8 9 : T h e b a n on s ur c h a r gi n gi s l i f t e d .
2 0 1 1 : I nD e c e m b e r ,HM
T r e a s ur y a nn o un c e s t h a t t h e g o v e r nm e
n t wi l l b a n e x c e s s i v e s ur c h a r g e s on a l l f or m s of p a ym e n t ,
a n d e x t e n d t h e b a n a c r o s s m o s t r e t a i l s e c t or s .T h e a nn o un c e m e n t a l s o s t a t e s t h a t t h e UK wi l l b e c om e t
h e f i r s t E ur o p e a n
c o un t r y t o a c t b yi m pl e m
e n t i n gf or t h c omi n gE ur o p e a nl e gi s l a t i on e a r l y t o b a n t h i s pr a c t i c e b e f or e t h e e n d of 2 0 1 2 .
2 0 1 2 : I nD e c e m b e r ,T h e
C on s um e r Ri gh t s ( P a ym e n t S ur c h a r g e s ) R e g ul a t i on s 2 0 1 2 b a nm e r c h a n t s f r om c h a r gi n g
c on s um e r s m or e t h a n t h e
c o s t b or n e t o t h e mf or a c c e p t i n g a gi v
e nm e a n s of p a ym e n t ( e f f e c t i v e i nA pr i l 2 0 1 3 ) .
Uni t e d S t a t e s
2 0 1 0 : T h e J u s t i c e D e p a r t m e n t ( D O J ) f i l e s a l a w s ui t a g a i n s t Am
e r i c a nE x pr e s s , Vi s a , a n d M a s t e r c a r d a
l l e gi n g t h a t t h e i r
m e r c h a n t f e e s a n d r e s t r i c
t i on s i m p o s e d onm e r c h a n t pr a c t i c e s vi ol a t e a n t i t r u s t l a w .T h e D O J r e a c h e s a
s e t t l e m e n t wi t h Vi s a
a n d M a s t e r C a r d t o e l i mi n a t e r ul e s pr e v e n t i n gm e r c h a n t s f r om o
f f e r i n g c on s um e r s d i s c o un t s ,r e w a r d s ,
a n d i nf or m a t i on
a b o u t c a r d c o s t s .
2 0 1 1 : I n J ul y , t h e s e t t l e m
e n t i s a p pr o v e d b y a f e d e r a l j u d g e .
2 0 1 2 : A pr e l i mi n a r y s e t t l e m e n t b e t w e e nm e r c h a n t s a n d Vi s a ,M
a s t e r C a r d , a n d s e v e r a l l a r g e i s s u e r b a n
k s r e q ui r e s Vi s a a n d
M a s t e r C a r d t o a l l o wm e r c h a n t s t oi m p o s e s ur c h a r g e s on c r e d i t c a r d t r a n s a c t i on s , s u b j e c t t o a c a p a n d o t h e r c on s um e r
pr o t e c t i onm e a s ur e s .T h e
c h a n g e w o ul d t a k e e f f e c t i n e a r l y2 0 1 3 .
2 0 1 3 : I nD e c e m b e r , t h e s e t t l e m e n t b e t w e e nm e r c h a n t s a n d Vi s a
,M a s t e r C a r d , a n d s e v e r a l l a r g e i s s u e r b a nk s i s a p pr o v e d b y
a f e d e r a l j u d g e .
2 0 1 4 : M e r c h a n t s a n d t h e i r t r a d e a s s o c i a t i on s a p p e a l t h e Vi s a / M
a s t e r C a r d s e t t l e m e n t .I n J ul y , t h e t r i a l of t h e c a s e b r o u gh t
b yD O J a g a i n s t Am e r i c a nE x pr e s s b e gi n s i nf e d e r a l c o ur t .
1 4
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 503/512
S o ur c e s :
I n t e r c h an
g e an d M e r c h an t S e r vi c e F e e s
Ar g e n t i n a
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
h t t p : / / w w w . pr o t e c t or a . or g . a r / l e gi s l a c i on / l e y-2 5 0 6 5 - t a r j e t a s - d e - c r e d i t o / 4 3 / ( i n S p a ni s h )
h t t p : / / w w w .1 s t - a nn a p ol i s . c om / i n t e r c h a n g e - w or l d - d i f f e r e n c e
h t t p : / / i r . a m e r i c a n e x pr e s s . c om / ph o e ni x .zh t ml ? c = 6 4 4 6 7 & p=i r ol -r e p or t s Ann u a l Ar c h i v e
h t t p : / / w w w . b c r a . g o v . a r / p d f s / m a r c o / M a r c o %2 0 L
e g a l %2 0 c om pl e t o . p d f ( i n S p a ni s h )
A u s t r a l i a
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / c c - s c h e m e s / c c -f e e s - b e n c h m a r k . p d f
h t t p : / / w w w .r b a . g o v . a u / m e d i a -r e l e a s e s / 2 0 0 6 / mr - 0 6 - 0 2 .h t ml
h t t p : / / w w w .r b a . g o v . a u / m e d i a -r e l e a s e s / 2 0 0 6 / mr - 0 6 - 0 8 .h t ml
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / l e g a l -f r
a m e w or k / s t a n d a r d s / i n t e r c h g- vi s a - d e b i t . p d f
h t t p : / / w w w .r b a . g o v . a u / m e d i a -r e l e a s e s / 2 0 0 9 / mr - 0 9 -1 8 .h t ml
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / d e b i t - c a r d - s y s t e m s / 2 0 1 2 1 1 -r e g-f r m wr k - e f t p o s - s y s / p d f / f i n-r e f -r i s -1 1 2 0 1 2 . p d
f
A u s t r i a
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 6 / 3 3 / 3 4 7 2 0 1 9 9 . p d f
h t t p : / / w w w . c on c ur r e n c e s . c om / a r t i c l e . ph p 3 ? i d _ a r t i c l e =2 3 9 3 5 &l a n g=f r
h t t p : / / w w w . c on c ur r e n c e s . c om / a r t i c l e . ph p 3 ? i d _ a r t i c l e =1 4 7 8 7
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =ME M O / 0 7 / 4 0
B e l gi um
h t t p : / / w w w .f r e s h f i e l d s . c om / p u b l i c a t i on s / n e w s l e t t e r s / n e w s l e t t e r . a s p ? t y p e i d = 6 &n e w s l e t t e r i d = 3 1 & c on t e n t i d = 7 4
h t t p : / / w w w . c on c ur r e n c e s . c om / a r t i c l e . ph p 3 ? i d _ a r t i c l e =1 2 4 2 6 # n b 1
h t t p : / / w w w . p s e c on s ul t i n g . c om / p d f / a r t i c l e s / i n t e r c h a n g e / c on s e q u e n c e s _ of _mi f _m a r 0 5 . p d f
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
h t t p : / / e c . e
ur o p a . e u / c om p e t i t i on / s e c t or s / f i n a n c i a l _ s e r vi c e s / i nf or m a t i on _ p a p e r _ p a ym e n t s _ e n . p d f
Br a zi l
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
h t t p : / / s i t e r e s o ur c e s . w or l d b a nk . or g / I NT P AYME N
T RE MMI T T A N C E / R e s o ur c e s / J o s e M
a r c i a n o . p d f
h t t p : / / w w w .r e u t e r s . c om / a r t i c l e / i d U S N1 4 2 7 3 5 5 7 2 0 0 9 0 7 1 5
h t t p : / / w w w .r e u t e r s . c om / a r t i c l e / i d U S N1 9 1 8 9 5 2 5 2 0 1 0 0 4 1 9
1 5
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 504/512
C a n a d a
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / W e i n e
r - Wr i gh t . p d f
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / R e g ul a t or y _ p a n e l . p d f
h t t p : / / w w w . p a r l . g c . c a / 4 0 / 2 / p a r l b u s / c omm b u s / s e n a t e / c om- e / b a nk - e / r e p- e / r e p 0 4 J un 0 9 - e . p d f
h t t p : / / w w w .f i n . g c . c a / n1 0 / d a t a / 1 0 - 0 4 9 _1 - e n g . a s p
h t t p : / / w w w . b u d g e t . g c . c a / 2 0 1 4 / d o c s / pl a n / c h 3 -4 - e
n g .h t ml
C h i l e
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
h t t p : / / w w w . t d l c . c l / n o t i c i a s / d e t a l l e . ph p ? i d = 8 ( un a v a i l a b l e a s of F e b r u a r y ,2 0 1 2 )
C h i n a
h t t p : / / w w w .k pm g . c om / C N / e n / I s s u e s An d I n s i gh t s / Ar t i c l e s P u b l i c a t i on s / D o c um e n t s / c a r d - p a ym e n t s - a s p a c - 0 9 0 6 . p d f
h t t p : / / e b u s i n e s s .mi t . e d u / r e s e a r c h / p a p e r s / 2 1 2 _ j h a
u s m a n _ c h i n a e p a ym e n t . p d f
h t t p : / / w w w . p a ym e n t s s o ur c e . c om / n e w s / C h i n e s e -Mi ni s t r y-P r o p o s e s - C a p pi n g-M e r c h a n t - C a r d -A c c e p t a n c e -F e e s - 3 0 0 8 9 6 9 -1 .h t m
l
h t t p : / / w w w .l e x ol o g y . c om / l i b r a r y / d e t a i l . a s px ? g= e f 4 1 2 5 a e - b 9 3 a -4 f b 3 - 9 d 7 2 - 3 d 3 6 2 4 6 1 5 7
c e
C ol om b i a
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
h t t p : / / w w w . c on s umi d or e s i n t . c l / n o v e d a d e s / d e t a l l e n o v e d a d . a s p ? i d =1 1 4 8 0 0 1 8 0 0 ( un a v a i l a b l e a s of N o v e m b e r ,2 0 0 7 )
D e nm a r k
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / W e i n e
r - Wr i gh t . p d f
h t t p : / / w w w .f or b r u g . d k / f i l e a d mi n / F i l e r / F O _E n gl i s h / UK- b e t a l i n g s mi d d e l l o v . p d f ( un a v a i l a b l e a s of F e b r u a r y ,2 0 1 2 )
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
E ur o p e a n
P a ym e n t C a r d s Y e a r b o ok 2 0 0 5 - 6 .
E s t oni a
h t t p : / / w w w .k onk ur e n t s i a m e t . e e / ? i d =2 1 2 3 1
E ur o p e a n
Uni on
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / F r i e s s . p d f
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =ME M O / 0 6 / 2 6 0 & t y p e =HT ML & a g e d = 0 &l a n g u a g e =E N & g ui L a n g u a g e = e n
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =I P / 1 0 / 4 6 2 &f or m a t =HT ML & a g e d = 0 &l a n g u a g e =E N & g ui L a n g u a g e =
e n
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =ME M O / 1 0 / 2 2 4 &f or m a t =HT ML & a g e d = 0 &l a n g u a g e =E N & g ui L a n g u a g e = e n
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =I P / 1 0 / 1 6 8 4
h t t p : / / c ur i a . e ur o p a . e u / j c m s / u pl o a d / d o c s / a p pl i c a t i on / p d f / 2 0 1 2 - 0 5 / c p1 2 0 0 6 9 e n . p d f
1 6
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 505/512
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =I P / 1 2 / 8 7 1
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s -r e l e a s e _I P -1 3 - 3 1 4 _ e
n .h t m ? l o c a l e = e n
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / 1 3 0 7 2 4 _ pr o p o s a l -r e g ul a
t i on-mi f s _ e n . p d f
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s -r e l e a s e _ME M O-1 3 - 7 1 9 _ e n .h t m ? l o c a l e = e n
h t t p : / / w w w . e ur o p a r l . e ur o p a . e u / s i d e s / g e t D o c . d o ?
p u b R e f =- %2 F %2 F E P %2 F %2 F T E XT %
2 BRE P ORT %2 BA 7 -2 0 1 4 -
0 1 6 7 %2 B
0 %2 BD O C %2 BXML %2 B V 0 %2 F %2 F E N &l a n g u a g e =E N
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s -r e l e a s e _I P -1 4 -1 9 7 _ e
n .h t m
h t t p : / / e ur -
l e x . e ur o p a . e u / l e g a l - c on t e n t / E N / T XT / H
T ML / ? ur i = C E L E X : 5 2 0 1 4 X C 0 5 1 6 ( 0 1
) &f r om=E N
h t t p : / / c ur i a . e ur o p a . e u / j c m s / j c m s / J o1 _ 6 5 8 1 / ? d a t e
D e b u t =1 1 / 0 9 / 2 0 1 4 & d a t e F i n=1 1 / 0 9 / 2 0
1 4
F i nl a n d
C onr o y , V
i c t or i a .2 0 0 9 .“ F i nl a n d pl a y s i t s c a r d s
r i gh t ,” F e b r u a r y1 0 , C ar d s I n t er n a t i o n a l , V R L F i n a n c i a l N e w s . w w w . vr l -f i n a n c i a l -n e w s . c om
h t t p : / / w w w . p s e c on s ul t i n g . c om / p d f / a r t i c l e s / i n t e r c h a n g e / c on s e q u e n c e s _ of _mi f _m a r 0 5 . p d f
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
h t t p : / / w w w . p a ym e n t c a r d y e a r b o ok s . c om / c o un t r y- pr of i l e s / f i nl a n d . ph p
F r a n c e
E ur o p e a n
P a ym e n t C a r d s Y e a r b o ok 2 0 0 5 - 6 .
J u d gm e n t
( C a s e A 3 1 8 / 0 2 S E R VI RE DI n t e r c h a n
g e f e e s )
h t t p : / / w w w . a u t or i t e d e l a c on c ur r e n c e .f r / u s e r / s t a n d a r d . ph p ? i d _r u b = 3 8 9 &i d _ a r t i c l e =1 6 5 7
h t t p : / / w w w . c g s h . c om / f i l e s / P u b l i c a t i on / 7 5 e b e 2 9 a
-1 0 d 7 -4 8 0 7 - 9 9 7 2 - 5 3 7 3 4 0 4 1 8 c 5 0 / P r e s e n t a t i on / P u b l i c a t i onA t t a c h m e n t / 8 1 5 b f 1 7 5 -f 6 4 5 -4 4 9 e - a f 6 a -
5 a 6 b e a 2 d 5 f 4 f / N a t i on a l %2 0 C om p e t i t i on %2 0 R e p
or t %2 0 Q2 %2 0 2 0 1 1 . p d f
h t t p : / / w w w . a u t or i t e d e l a c on c ur r e n c e .f r / u s e r / s t a n d a r d . ph p ? i d _r u b =4 8 2 &i d _ a r t i c l e =2 2 5 1
( i nF r e n c h )
h t t p : / / w w w .r e u t e r s . c om / a r t i c l e / 2 0 1 3 / 0 9 / 2 3 / u s -m a s t e r c a r d - vi s a -i d U S BRE 9 8 M 0 L M2 0 1 3 0 9 2 3
G e r m a n y
E ur o p e a n
P a ym e n t C a r d s Y e a r b o ok 2 0 0 5 - 6 .
h t t p : / / e n gl i s h .z a h l un g s v e r k e h r s f r a g e n . c om / s u b s c
r i b e r s / p a ym e n t s _ a t _ t h e _ p o s .h t m
h t t p : / / w w w . b un d e s k a r t e l l a m t . d e / S h a r e d D o c s / M e l d un g / E N / M e l d un g e n N e w s K a r u s s e l l / 0 8 _4 _2 0 1 4 _E C - C a s h .h t ml
h t t p : / / w w w .l e x ol o g y . c om / l i b r a r y / d e t a i l . a s px ? g=f e d e a f a 3 - 9 0 f d -4 a 2 2 - 8 0 8 f -f f 9 0 6 3 d 1 0 0 4 9
h t t p s : / / w w
w . s e p a d e u t s c h l a n d . d e / a s s e t f i l e _ 5 1 e 7 a 6 f 8 4 e 9 f c 4 f 4 1 2 0 0 0 0 1 7 _ 0 f 0 . p d f
Gr e e c e
h t t p : / / w w w . e p a n t . gr / i m g / x2 / n e w s / n e w s 1 7 2 _1 _1 2 3 6 2 4 5 0 1 0 . p d f
H un g a r y
h t t p : / / w w w . g vh .h u / d om a i n2 / f i l e s / m o d ul e s / m o d u
l e 2 5 / p d f / b a nk k a r t y a h a s zn a l a t _2 0 0 6 . p d
f
h t t p : / / w w w . g vh .h u / g vh / a l ph a ? d o=2 & s t =2 & p g=1
3 3 &m 5 _ d o c = 6 0 7 1
1 7
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 506/512
h t t p : / / e c . e
ur o p a . e u / c om p e t i t i on / e c n / b r i e f / 0 1 _2 0 1
0 / p a ym e n t c a r d s _h u . p d f
h t t p : / / e n gl i s h .mn b .h u / R o o t / D ok um e n t um t a r / E NM NB / Ki a d v a n y ok / r e p or t - on- p a ym e n t -
s y s t e m s / J e l e n t e s _ a _f i z e t e s i _r e n d s z e r r ol _2 0 1 3 _E
N G _f i n a l . p d f
h t t p : / / w w w . p ol i t i c s .h u / 2 0 1 3 0 9 0 2 / b i l l - c a p pi n g- b a nk - c r e d i t - c a r d -i n t e r c h a n g e -f e e s - s u b mi t t e d /
I n d i a
h t t p : / / r b i . or g .i n / s c r i p t s / N o t i f i c a t i on U s e r . a s px ? I d = 7 3 0 4 &M o d e = 0
h t t p : / / r b i . or g .i n / s c r i p t s / B S _ C i r c ul a r I n d e xDi s pl a y . a s px ? I d = 7 4 2 2
I s r a e l
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
h t t p : / / w w w . o e c d . or g / of f i c i a l d o c um e n t s / p u b l i c d i s pl a y d o c um e n t p d f / ? c o t e =DAF / C OMP / AR ( 2 0 1 2 ) 5 & d o c L a n g u a g e =E n
I t a l y
h t t p : / / w w w .l a w 3 6 0 . c om / a r t i c l e s / 2 0 7 3 3 0 / i t a l y-f i n
e s -m a s t e r c a r d - b a nk s - o v e r -i n t e r c h a n g e
-f e e s
h t t p : / / e c . e
ur o p a . e u / c om p e t i t i on / e c n / b r i e f / 0 5 _2 0 1
0 / i t _ b a n c om a t . p d f
h t t p : / / w w w .l e x ol o g y . c om / l i b r a r y / d e t a i l . a s px ? g= b 8 8 e e f c c -4 a 3 9 -4 c d 7 - 9 6 2 e - e a 7 4 8 7 a 8 3 d
c 7
h t t p : / / w w w . a g c m .i t / t r a s p- s t a t i s t i c h e / d o c _ d o wnl o
a d / 4 1 0 4 -i 7 7 3 pr o v v e d i m e n t o d i a v vi oi s t r u t t or i a .h t ml ( i nI t a l i a n )
L a t vi a
h t t p : / / w w w .k p . g o v .l v / ? o b j e c t _i d =1 0 8 4 &m o d ul e =n e w s
L ux e m b o ur g
h t t p : / / w w w . p s e c on s ul t i n g . c om / p d f / a r t i c l e s / i n t e r c h a n g e / c on s e q u e n c e s _ of _mi f _m a r 0 5 . p d f
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
h t t p : / / w w w . a b b l .l u / n o d e / 8 4 4 1
M e xi c o
N e gr í n , J o
s é L ui s .“ T h e r e g ul a t i on of p a ym e n t c a r d s : T h e M e xi c a n e x p e r i e n c e ,” R e v i e w
o f N e t w or k E c o n o m i c s ,4 : 2 4 3 -2 6 5 ,D e c e m b e r 2 0 0 5 .
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / Or t i z . p d f
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
N e t h e r l a n d s
h t t p : / / w w w . p s e c on s ul t i n g . c om / p d f / a r t i c l e s / i n t e r c h a n g e / c on s e q u e n c e s _ of _mi f _m a r 0 5 . p d f
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
h t t p : / / w w w .nm a .nl / e n / c om p e t i t i on / f i n a n c i a l _ a n d
_ b u s i n e s s _ s e r vi c e s / b a nk s _ a n d _ b u s i n e s s _ s e r vi c e s _ c a s e s / d e f a ul t . a s px
h t t p s : / / w w
w . a c m .nl / e n / p u b l i c a t i on s / p u b l i c a t i on / 1 2 6 4 3 / A C M-M a s t e r C a r d -l o w e r s - t a r i f f s -f or - c r e d i t - c a r d - p a ym e n t s /
1 8
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 507/512
h t t p : / / w w w . b e t a a l v e r e ni gi n g .nl / e n / f i e l d s - of - a c t i vi t y / d e b i t - c a r d - t r a n s a c t i on s - a n d - p o s - t e r mi n a l s /
h t t p : / / w w w . o e c d . or g / r e gr e f or m / s e c t or s / 3 9 3 4 7 6 9 9 . p d f
N e wZ e a l a n d
h t t p : / / w w w . c om c om . g o v t .nz / m e d i a -r e l e a s e s / d e t a i l / 2 0 0 9 / c omm e r c e c ommi s s i on a n d vi s a r e a c h a gr e /
h t t p : / / w w w . c om c om . g o v t .nz / m e d i a -r e l e a s e s / d e t a i l / 2 0 0 9 / c omm e r c e c ommi s s i on a n d m a s t e r c a r d a gr /
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
N or w a y
h t t p : / / w w w .k r e d i t t i l s yn e t .n o / a r c h i v e / f - a v d _ w or d
/ 0 1 / 0 4 / R e g ul 0 1 1 . d o c
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / f i n s e r vi c e s -r e t a i l / d o c s / f i nf o c u s / f i nf o c u s 3 / f i nf o c u s 3 _ e n . p d f
h t t p : / / w w w .n or g e s - b a nk .n o / U pl o a d / E n gl i s h / P u b l i c a t i on s / E c on omi c %2 0 B ul l e t i n / 2 0 0 6 - 0 4 / 0 1 -P a ym e n t s %2 0 h i s t or y . p d f
h t t p : / / w w w .n or g e s - b a nk .n o / U pl o a d / i m p or t / f r on t / r a p p or t / e n / b f / 2 0 0 5 / h e l e _h e f t e t . p d f
P a n a m a
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
h t t p : / / w w w .i i b . or g / a s s o c i a t i on s / 6 3 1 6 / f i l e s / g s 2 0 0
4 . p d f
P ol a n d
h t t p : / / w w w . u ok i k . g o v . pl / n e w s . ph p ? n e w s _i d =1 0 0 4
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
h t t p : / / w w w . u ok i k . g o v . pl / / n e w s . ph p ? n e w s _i d =2 0
4 5
h t t p : / / w w w .n b p . pl / h om e n . a s px ? f = / e n / s y s t e m _ pl a t ni c z y / c h a r g e s _r e d u c t i on .h t ml
h t t p : / / w w w . w a r s a w v oi c e . pl / W V p a g e / p a g e s / a r t i c
l e P r i n t . ph p / 2 1 5 7 0 / n e w s
h t t p : / / w w w .l e x ol o g y . c om / l i b r a r y / d e t a i l . a s px ? g=1 e 5 c 3 f d 6 -4 2 2 6 -4 2 a 1 - b 9 6 9 - e 5 0 f 5 f f 9 4 1 b 8
h t t p : / / or k a . s e j m . g o v . pl / pr o c 7 .n s f / u s t a w y / 9 6 6 _ u .h t m ( i nP ol i s h )
P or t u g a l
h t t p : / / e ur o
p a . e u / r a pi d / pr e s s R e l e a s e s A c t i on . d o ? r e f e r e n c e =ME M O / 0 7 / 4 0 &f or m a t =D O C
& a g e d =1 &l a n g u a g e =E N & g ui L a n g u a g
e =f r
R om a ni a
h t t p : / / w w w . c on s i l i ul c on c ur e n t e i .r o / u pl o a d s / d o c s
/ i t e m s / i d 8 3 3 4 / u t i l a _ c a r d ur i _2 0 1 3 _ e n gl i s h . p d f
h t t p : / / w w w . a ur s f .r o / w p- c on t e n t / u pl o a d s / 2 0 1 4 / 0 2
/ S p e e c h -Al i n . p d f
h t t p : / / w w w .r om a ni a -i n s i d e r . c om / r om a ni a s -n e w-r e g ul a t i on s - on- c a s h - p a ym e n t -l i mi t s - a n
d -i n t e r c h a n g e -f e e s - c e i l i n g-n e e d - p a r l i a m e n t -
a p pr o v a l / 1 1 4 9 6 5 /
1 9
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 508/512
S i n g a p or e
h t t p : / / w w w . c c s . g o v . s g / c on t e n t / c c s / e n / M e d i a - a n d
-P u b l i c a t i on s / M e d i a -R e l e a s e s / c c s -i s s u
e s - a - c l e a r a n c e - d e c i s i on- on- vi s a s -mi f - s
y s t e m .h t ml
S o u t h Af r
i c a
h t t p : / / w w w . c om p c om . c o .z a / a s s e t s / B a nk i n g / N on c onr e p or t / 9 -A p p e n d i c e s . p d f
h t t p : / / w w w . c om p c om . c o .z a / a s s e t s / U pl o a d s / A t t a c h e d F i l e s / M yD o c um e n t s / B a nk i n g-P r e s s - S t a t e m e n t . d o c
h t t p : / / w w w . c om p c om . c o .z a / t e c h ni c a l -r e p or t /
h t t p : / / w w w . c om p c om . c o .z a / a s s e t s / B a nk i n g / N on c onr e p or t / 8 - C on c l u s i on s . p d f
h t t p s : / / w w
w .r e s b a nk . c o .z a / P u b l i c a t i on s / D e t a i l -I t e m- Vi e w / P a g e s / P u b l i c a t i on s . a s px ? s a r b w e b = 3 b 6 a a 0 7 d - 9 2 a b -4 4 1 f - b 7 b f -
b b 7 d f b 1 b e d b 4 & s a r b l i s t =2 1 b 5 2 2 2 e - 7 1 2 5 -4 e 5 5 - b b 6 5 - 5 6 f d 3 3 3 3 3 7 1 e & s a r b i t e m= 6 1 5 5
S o u t h K or e a
A s i a Af r i c a I n t e l l i g e n c e Wi r e ." F T C s l a p s 1 0 .1 b
l n w onf i n e onB C C a r d f or c a r t e l a c t i vi t i e s ." J un e 3 0 2 0 0 5 .
h t t p : / / w w w . a c c e s s m yl i b r a r y . c om / a r t i c l e -1 G1 -1 3
4 4 7 5 0 9 0 / f t c - s l a p s -1 0 -1 .h t ml
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 0 / 3 0 / 3 9 5 3 1 6 5 3 . p d f
h t t p : / / w w w . p a ym e n t s s o ur c e . c om / n e w s / k or e a n- c a r d -n e t w or k s - c u t -i n t e r c h a n g e -f e e s - 3 0 0
8 2 1 9 -1 .h t ml
S p a i n
h t t p : / / e c . e
ur o p a . e u / c om p e t i t i on / s e c t or s / f i n a n c i a l _ s e r vi c e s / i n q ui r i e s / s e c _2 0 0 7 _1 0 6 . p d f
h t t p : / / w w w .r b r l on d on . c om / n e w s l e t t e r s / b 2 2 1 e . p d
f
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
J u d gm e n t
( C a s e A 3 1 8 / 0 2 S E R VI RE DI n t e r c h a n
g e f e e s )
J u d gm e n t
oni n d i vi d u a l e x e m p t i on ( C a s e n o .A 3
1 4 / 2 0 0 2 S I S T E MA4 B )
P r o c e e d i n
g s i n t h e c a s e of a m e n d m e n t or r e v o c a t i on ( C a s e n o .A2 8 7 / 0 0 E ur o 6 0 0 0 )
h t t p : / / e c . e
ur o p a . e u / c om p e t i t i on / e c n / b r i e f / 0 1 _2 0 1
1 / e s _ d e b i t . p d f
h t t p : / / w w w . c n c om p e t e n c i a . e s / I ni c i o / N o t i c i a s / t a b
i d / 1 0 5 / D e f a ul t . a s px ? C on t e n t i d =2 8 7 3 1
8 &P a g=1
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
h t t p : / / w w w .l a m on c l o a . g o b . e s / l a n g / e n / g o b i e r n o / c
o un c i l mi ni s t e r s / P a gi n a s / 2 0 1 4 / 2 0 1 4 0 7 0 4 - c o un c i l -mi ni s t e r . a s px
h t t p s : / / w w
w . b o e . e s / d i a r i o _ b o e / t x t . ph p ? i d =B OE -
A-2 0 1 4 - 7 0 6 4
S wi t z e r l a n d
h t t p : / / w w w .n e w s . a d mi n . c h / N S B S u b s c r i b e r / m e s s a g e / a t t a c h m e n t s / 1 4 4 5 2 . p d f ( i n G e r m a n )
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
C om p e t i t i on C ommi s s i on .“ Ann u a l R e p or t 2 0 0 5
.”
C om p e t i t i on C ommi s s i on .“ T r a n s l a t i on of t h e D e c i s i on of t h e C om p e t i t i on C ommi s s i onf r om2 5 . J a n u a r y2 0 1 0 . C on c e r ni n gP
r e l i mi n a r y
I n j un c t i on
s i n t h e C a s e of t h e I n v e s t i g a t i on un d e r Ar t i c l e 2 7 of t h e F e d e r a l A c t on C a r t e l s a n d O t h e r R e s t r a i n t s of C om p e t i t i onR e l a t i n g t o2 2 -
0 3 8 9 : C r e
d i t C a r d s -DMI F I I .”
2 0
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 509/512
C om p e t i t i on C ommi s s i on .“ T o t h e F e d e r a l C o un
c i l : Ann u a l R e p or t 2 0 1 0 of t h e C om p e t i t i on C ommi s s i on”
h t t p : / / w w w . gl o b a l c om p e t i t i onr e vi e w . c om / r e vi e w
s / 3 7 / s e c t i on s / 1 3 2 / c h a p t e r s / 1 4 0 5 /
h t t p : / / w w w .m on d a q . c om / x / 8 6 5 8 4 / T r a d e + R e g ul a
t i on+ P r a c t i c e s / N a t i on a l + C om p e t i t i on+
L a w+ R e p or t + + Q 3 + 2 0 0 9
h t t p : / / w w w . o e c d . or g / c om p e t i t i on / P a ym e n t S y s t e m s 2 0 1 2 . p d f
T ur k e y
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 0 / 3 0 / 3 9 5 3 1 6 5 3 . p d f
h t t p : / / w w w . o e c d . or g / c om p e t i t i on / P a ym e n t S y s t e m s 2 0 1 2 . p d f
Uni t e d Ki n g d om
h t t p : / / w w w . of t . g o v . uk / s h a r e d _ of t / c a 9 8 _ p u b l i c _r
e gi s t e r / d e c i s i on s / of t 8 1 1 . p d f
h t t p : / / w w w . of t . g o v . uk / n e w s / pr e s s / 2 0 0 6 / 9 7 - 0 6
h t t p : / / w w w . of t . g o v . uk / n e w s / pr e s s / 2 0 0 6 / 2 0 - 0 6
h t t p : / / w w w . of t . g o v . uk / n e w s / pr e s s / 2 0 0 5 / 1 9 5 - 0 5
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / Vi c k e r s . p d f
h t t p : / / w w w . of t . g o v . uk / OF T w or k / c om p e t i t i on- a c t - a n d - c a r t e l s / c a 9 8 - c ur r e n t / i n t e r c h a n g e -f e e s /
Uni t e d S t a t e s
h t t p : / / w w w .f e d e r a l r e s e r v e . g o v / n e w s e v e n t s / pr e s s
/ b c r e g / 2 0 1 1 0 6 2 9 a .h t m
h t t p : / / w w w . g p o . g o v / f d s y s / pk g / F R-2 0 1 1 - 0 7 -2 0 / p
d f / 2 0 1 1 -1 6 8 6 1 . p d f
h t t p : / / w w w . c a d c . u s c o ur t s . g o v / i n t e r n e t / o pi ni on s .n s f / F E 9 E D C 4 B 5 E 2 C 6 D 9 E 8 5 2 5 7 C A2 0
0 4 F B1 9 A / $ f i l e / 1 3 - 5 2 7 0 -1 4 8 4 7 5 3 . p d f
V e n e z u e l a
h t t p : / / w w w . b c v . or g . v e / l e y / r e s o 0 8 1 2 0 1 . p d f ( i n S p a ni s h )
h t t p : / / w w w . t s j . g o v . v e / g a c e t a / d i c i e m b r e / 0 4 1 2 0 8 / 0 4 1 2 0 8 - 3 9 0 7 3 -2 5 .h t ml # ( i n S p a ni s h )
S ur c h ar g
e s an d Di s c o un t s
A u s t r a l i a
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w- c a r d -r e f or m s / p d f / r e vi e w- 0 7 0 8
-i s s u e s . p d f
h t t p : / / w w w .r b a . g o v . a u / p u b l i c a t i on s / c on s ul t a t i on s / 2 0 1 1 0 6 -r e vi e w- c a r d - s ur c h a r gi n g / p d f / 2 0 1 1 0 6 -r e vi e w- c a r d - s ur c h a r gi n g . p d f
h t t p : / / w w w .r b a . g o v . a u / p u b l i c a t i on s / c on s ul t a t i on s / 2 0 1 1 1 2 - v a r i a t i on- s ur c h a r gi n g- s t a n d a r d s / p d f / 2 0 1 1 1 2 - v a r i a t i on- s ur c h a r gi n g- s t a n d a r d s . p d f
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / c a r d s / 2 0 1 2 0 6 - v a r - s ur c h a r gi n g- s t n d s -f i n-r e f -r i s / p d f / 2 0 1 2 0 6 - v a r - s ur c h a r gi n g- s t n d s -f i n-r e f -r i s . p d f
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / s ur c h a r
gi n g / i n d e x .h t ml
2 1
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 510/512
A u s t r i a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
B e l gi um
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
B ul g a r i a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
C a n a d a
h t t p : / / w w w .k c .f r b . or g / p u b l i c a t / p s c p / 2 0 0 5 / W e i n e
r - Wr i gh t . p d f
h t t p : / / w w w . c t - t c . g c . c a / C a s e s Af f a i r e s / C a s e s D e t a i l s - e n g . a s p ? C a s e I D= 3 3 3
h t t p : / / w w w . c t - t c . g c . c a / C MF i l e s / C T -2 0 1 0 - 0 1 0 _ S
umm a r y %2 0 of %2 0 C onf i d e n t i a l %2 0 D e c i s i on _ 3 1 7 _ 3 8 _ 7 -2 3 -2 0 1 3 _ 8 4 0 8 . p d f
C z e c h R e p u b l i c
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
C y pr u s
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
D e nm a r k
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
E s t oni a
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
E ur o p e a n
Uni on
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / 1 3 0 7 2 4 _ pr o p o s a l -r e vi s e d - p s d 2 _ e n . p d f
F i j i
h t t p : / / w w w .f i j i t i m e s . c om / s t or y . a s px ? i d =2 0 4 5 2 6
h t t p : / / w w w .r e s e r v e b a nk . g o v .f j / d o c s 2 / 1 %2 0 P r e s s %2 0 R e l e a s e %2 0 N o %2 0 2 9 %2 0 -
%2 0 RBF %2 0 U ph ol d s %2 0 ' N o %2 0 S ur c h a r g e %2 0 R ul e ' %2 0 f or %2 0 F i j i . p d f
2 2
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 511/512
F i nl a n d
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
F r a n c e
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
G e r m a n y
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
Gr e e c e
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
H un g a r y
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
I r e l a n d
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
I s r a e l
h t t p : / / w w w .n y .f r b . or g / r e s e a r c h / c onf e r e n c e / 2 0 0 5 / a n t i t r u s t / S pi e g e l . p d f
I t a l y
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
L a t vi a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
L i t h u a ni a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
L ux e m b o ur g
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m e w or k / t r a n s p o s i t i on / p s d _ t r a n s p
o s i t i on _ s t u d y _r e p or t _ e n . p d f
M a l t a
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
2 3
8/17/2019 Payment Card Networks Panel MaterialsPart 3_0
http://slidepdf.com/reader/full/payment-card-networks-panel-materialspart-30 512/512
M e xi c o
h t t p : / / w w w . o e c d . or g / d a t a o e c d / 3 1 / 1 9 / 3 8 8 2 0 1 2 3 . p d f
N e t h e r l a n d s
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
N e wZ e a l a n d
h t t p : / / w w w . c om c om . g o v t .nz / m e d i a -r e l e a s e s / d e t a i l / 2 0 0 9
h t t p : / / w w w . c om c om . g o v t .nz / m e d i a -r e l e a s e s / d e t a i l / 2 0 0 9
P ol a n d
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m
P or t u g a l
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m
R om a ni a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m
S l o v a k i a
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m
S l o v e ni a
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
S p a i n
h t t p : / / w w w . e c b .i n t / p u b / p d f / s c p o p s / e c b o c p1 3 1 . p d f
S w e d e n
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w
h t t p : / / e c . e
ur o p a . e u / i n t e r n a l _m a r k e t / p a ym e n t s / d o
c s / f r a m
h t t p : / / w w w .i f l r . c om / Ar t i c l e / 2 7 1 3 0 1 8 / I m pl e m e n t
a t i on- o
S wi t z e r l a n d
h t t p : / / w w w .r b a . g o v . a u / p a ym e n t s - s y s t e m / r e f or m s / r e vi e w