New York – Visa and Mastercard have announced a revised USD 38 billion settlement with U.S. merchants who accused the card networks of charging excessively high fees for processing credit card payments. The new proposal aims to address concerns raised by a federal judge who previously rejected a smaller USD 30 billion settlement as inadequate.
The settlement seeks to conclude two decades of litigation in which merchants alleged that Visa, Mastercard, and several banks violated U.S. antitrust laws by conspiring to inflate “swipe fees” — charges paid by retailers each time customers use credit cards.
However, the updated accord has already faced opposition from key merchant groups, including the National Retail Federation (NRF) and the Merchants Payments Coalition, who argue that it still fails to meaningfully reduce costs.
“You can’t just suddenly tell more than 80 percent of your card customers you’re not going to take their cards,” said Stephanie Martz, NRF’s General Counsel. “You would lose a lot of business.”
Swipe fees, also known as interchange fees, totaled USD 111.2 billion in the United States in 2024, up from USD 100.8 billion in 2023 — and four times higher than in 2009, according to NRF data.
Under the proposed terms, Visa and Mastercard would reduce swipe fees by 0.1 percentage point for five years, bringing typical rates of 2%–2.5% down slightly. Standard consumer rates would be capped at 1.25% for eight years, representing a 25% reduction, while merchants would gain new flexibility to accept or reject specific card categories — such as commercial cards, premium rewards cards, or standard consumer cards.
Additionally, merchants would be allowed to impose surcharges of up to 3% on card transactions, providing an “unfettered” option to offset processing costs.
According to court filings, lawyers for the merchants said the USD 38 billion valuation is based on the projected reduction in swipe fees through 2031, as estimated by two economists, including Nobel laureate Joseph Stiglitz. They believe the collective changes could save merchants more than USD 200 billion over the life of the agreement.
In separate statements, Visa said the settlement delivers “meaningful relief and more flexibility” for merchants of all sizes, while Mastercard emphasized that smaller businesses would particularly benefit from “lower costs and simpler rules.”
Neither company admitted wrongdoing as part of the deal. Both Visa and Mastercard shares remained largely unchanged in afternoon trading.
The earlier USD 30 billion settlement, rejected in June 2024 by U.S. District Judge Margo Brodie in Brooklyn, had proposed a smaller reduction of 0.07 percentage points in fees over five years. The court’s approval is again required before the revised agreement can take effect.
