Paycom provides payment services over the internet, processing the credit and debit card transactions that take place between its clients and internet users. According to Paycom internet merchants like itself are vulnerable to abuse because they have no real option as to payment method. They cannot accept cash or cheques instantly, but must rely on credit or debit card payments.
The complaint alleges that “MasterCard takes advantage of its substantial market power over internet merchants like Paycom by charging transaction fees … much higher than what are charged to traditional 'brick and mortar' merchants”.
Fines, penalties and fees are also charged by MasterCard resulting in what the complaint calls an “illegal use of monopolistic power.”
Christopher Mallick, CEO of Paycom, said:
"We are in compliance with MasterCard's rules as a merchant, yet they fine us millions of dollars. Paycom has been directed to change its entire business structure, indeed to change the way in which e-commerce works, to comply with additional rules from MasterCard; rules that MasterCard cannot or will not articulate or explain."
He added:
"The intent of this lawsuit is to force MasterCard to treat us and other internet merchants fairly and to permit us to operate as any other merchant class. This is a business that we built on our ability to accept MasterCard, one of the only currencies available for on-line shoppers."
MasterCard has not commented on the action.