American Express agrees to settle case against Visa, others for $2.1 billion

Mumbai: American Express has accepted a $2.1 billion payment to settle a three-year-old anti-trust lawsuit with Visa, MasterCard and their member banks had illegally blocked it from the US bank-issued card business.

American Express filed a suit in 2004 against "anti-competitive practices" by Visa, MasterCard and eight banks of the card association that prevented 20,000 US banks from using its credit card products.

Under the terms of the deal, American Express will drop Visa as a defendant. American Express will also drop banks named in the lawsuit, including JP Morgan Chase, Capital One, US Bancorp, Wells Fargo and Providian.

Visa, however, said it did not concede any liability through the settlement, which has to be approved by its member banks.

Under the agreement, American Express will receive $945 million in March from Visa and an additional payment from the banks named in the case under a judgement sharing agreement. The rest, up to $1.12 billion, will be paid in instalments of up to $70 million per quarter over four years, Visa said.

Visa said the total nominal amount paid under the settlement would be $2.065 billion. American Express said it could receive a maximum of $2.25 billion under the settlement, including the additional payment from the banks.