Paycom May Appeal Mastercard Ruling

LOS ANGELES - Lawyers for transaction processor Paycom.net may appeal the March 29 dismissal of its $23 million suit against Mastercard.

Paycom sued Mastercard in 2003 for what it deemed monopolistic rules that allowed the credit card company unreasonable discretion to dominate Internet merchants, and it has exercised this power to illegally impose fines and penalties in the millions of dollars.

Mastercard levied higher chargeback fees than its competitors, Paycom lawyers declared, and chilled competition from cards with lower fees. Chargebacks are fees levied on a merchant when a customer rescinds credit card payment for goods or services. When cards are not present, e.g. when payments are made via Internet, Mastercard charges a higher fee than when a physical card is presented at the point of purchase.

U.S. District Judge David Trager’s dismissal of the case noted that Paycom was not prevented from using other forms of payment, such as Discover or American Express cards. He also stated that Mastercard’s practices were not anticompetitive and were only injurious to Paycom.

The dismissal further intimated that it was other credit card companies that had primary grievances against Mastercard, not a remote party like Paycom.

Former Paycom CEO Chris Mallick said at the time of the original lawsuit filing, “The intent of this lawsuit [was] to force MasterCard to treat us and other Internet merchants fairly and to permit us to operate as any other merchant class.”

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