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New York - Credit card issuers Visa and MasterCard on Monday said they will pay up to $2.75bn to Discover Financial Services to settle an antitrust suit.
Visa of San Francisco will pay $1.89bn, and MasterCard of Purchase, New York, will pay $862.5m.
Morgan Stanley, the former parent of Discover, will refund $100m to Visa and MasterCard under separate agreements.
In 2004, Riverwoods, Illinois-based Discover filed a lawsuit against MasterCard and Visa saying they had harmed its business by preventing their member banks from issuing credit cards for Discover's network.
Discover said it will receive about $862m of the settlement in the current fiscal quarter and up to about $472m per quarter in 2009.
"This settlement will enable Discover to further strengthen its capital base in this challenging economy and also will support continued investment in growing our business, including broadening global acceptance, expanding network volume and growing our deposit franchise," chief executive David Nelms said in a statement.
Discover will hold a conference call on Tuesday to discuss the details of the settlement.
Visa settled a similar suit with American Express nearly a year ago for a maximum $2.25bn, and MasterCard settled with AmEx in June for a maximum of $1.8bn. In both settlements, the parties agreed to pay AmEx in incremental amounts over the course of a few years.
- AP
