Visa and Mastercard Revise Merchant Settlement Over Swipe Fees
Visa and Mastercard announced a revised settlement today with merchants who alleged the card networks imposed excessive fees for processing credit card transactions, following a judge’s rejection of a previous $30 billion agreement.
The updated accord, submitted for court approval, would lower swipe fees – also known as interchange fees – by 0.1 percentage points for five years, from the current typical range of 2% to 2.5%. Merchants will also gain the ability to selectively accept U.S. cards based on category, including commercial, premium consumer, and standard consumer cards, with standard consumer rates capped at 1.25% during the agreement’s duration. Businesses will also have increased options for imposing surcharges on credit card payments. These fees totaled $111.2 billion in the United States in 2024, a significant cost for businesses and a factor in consumer pricing.
“This settlement provides merchants of all sizes with meaningful relief, more flexibility and options to control how they accept payments from their customers,” Visa stated. Mastercard echoed this sentiment, adding that smaller merchants would particularly benefit from the simpler rules and lower costs, leading to a “better payments experience” for both businesses and consumers. The initial 20-year litigation centered on accusations of antitrust violations and the practice of collecting swipe fees. You can learn more about interchange fees and antitrust concerns from the Federal Trade Commission.
U.S. District Judge Margo Brodie in Brooklyn will need to approve the settlement, having previously deemed the initial $30 billion offer inadequate in June 2024. Some merchant groups, like the Merchants Payments Coalition, have already expressed concerns, calling the fee reduction “minuscule” and noting that Visa and Mastercard would retain the ability to raise fees after the temporary cuts expire. For more information on the ongoing debate surrounding credit card fees, see the National Retail Federation’s resources.
Officials stated the settlement is subject to court review and implementation, with further details to be released pending Judge Brodie’s decision.
