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Wal-Mart suing Visa for $5 billion

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Wal-Mart (WMT) is suing Visa (V) over anticompetitive practices that the retailer says led to higher prices and fewer services for customers. According to the suit, Wal-Mart claims Visa, together with banks, charged excessively high card swipe fees between January 2004 and November 2012. Wal-Mart is seeking $5 billion in damages from Visa.

Visa and other credit card companies charge retailers fees each time consumers use a debit or credit card in a transaction at a retail location. Wal-Mart claims Visa worked with banks to ensure retailers couldn’t protect themselves against increases in those fees. The giant retailer claims it was forced to raise prices or cut back on services in order to absorb the fees and that led to lower sales than Wal-Mart otherwise would have had.

In December, a federal judge approved a $5.7 billion class action settlement between retailers and Visa and MasterCard over excessive swipe fees. Many of the retailers involved in the class action were not satisfied with the terms of the settlement. Wal-Mart, Amazon and Target opted out of the class action settlement in order to pursue their own lawsuits against the credit card companies. Yahoo Finance’s Jeff Macke says this is just the beginning. “Visa’s got more lawsuits coming at them,” said Macke. “There’s going to be more suits coming against Visa for their usurious fees, which is Latin for: they’re kind of hosing consumers and the retailers are mad about it.”

Macke says Wal-Mart wants to charge as little as possible for their products and Visa’s fees are cutting into Wal-Mart’s profits. “It’s all about driving margins,” said Macke. “They want to charge as little as humanly possible and this is yet another way to do it.”

Macke points out that Visa, like Wal-Mart, is a for-profit operation whose goal is to make money. “Visa is actually a business charging a fee for its goods and services - go figure,” said Macke. “But most consumers don’t know that buried into the cost of something they buy at any retailer is the price of charging it.”

Visa has declined to comment on the lawsuit. Wal-Mart has not commented publicly on whether it plans to take legal action against MasterCard.