In what could be the largest settlement ever to resolve an antitrust lawsuit, Visa has agreed to pay American Express up to $2.25 billion for blocking member banks from offering rival credit cards, the AP reports. The deal helps clear the way for Visa’s IPO, expected early in 2008. MasterCard, also named in the suit, has refused to settle.
AmEx and Discover sued in 2004 after the Supreme Court ruled banks could issue competitors’ cards. Visa’s member banks, including Bancorp, Wells Fargo, Washington Mutual, J.P. Morgan Chase, and Capital One, will pay $1.13 billion this quarter, and 16 quarterly payments of up to $70 million if AmEx reaches financial targets. AmEx plans to use some settlement proceeds to reward cardholders.