Card-network fee fights migrate from politics to merchant litigation

NEW YORK — The swipe-fee argument used to live in Washington. It now also lives in court. Merchants said they will keep lobbying, but they are no longer waiting for a statute to change the routing and fee stack.

Networks and banks argue that the rails are a two-sided market and that merchants are shopping a political discount. Merchants argue that a fee that compounds on every latte is not a law of nature.

Investors should treat this as a multi-year margin debate, not a headline. A 10-basis-point change in interchange is a rounding error to a shopper and a thesis to a payments stock.