Visa and Mastercard $38B Swipe Fee Settlement Moves Forward
A federal judge has granted preliminary approval to a revised $38 billion settlement between Visa, Mastercard, and more than 12 million U.S. merchants, bringing a two-decade legal battle over credit card swipe fees one step closer to an end. The lawsuit, which dates back to 2005, accused Visa, Mastercard, and participating banks of keeping interchange fees artificially high in violation of antitrust laws.
The latest $38 billion settlement is significantly larger than a previous $30 billion agreement that was rejected by the courts in 2024. Judge Brian Cogan called the revised deal “fair, reasonable, and adequate” while signaling that he is likely to grant final approval.
What Is the Settlement?
Merchants have long argued that Visa and Mastercard, along with the banks that issue their cards, have maintained swipe fees at artificially high levels. The proposed settlement would address some of those concerns by reducing certain fees and giving merchants more options when accepting card payments.
According to reports, the agreement would:
- Reduce interchange fees by approximately 0.1 percentage point for five years.
- Cap certain consumer card interchange rates at 1.25% for eight years.
- End the “Honor All Cards” rule by giving merchants the ability to selectively accept payment cards based on type (commercial, premium consumer, and standard consumer cards), instead of being forced to accept every card in a network or none at all.
- Give merchants expanded options to impose surcharges on customers based on their form of payment.
- Cover more than 12 million merchants across the United States.
While the judge’s approval is an important milestone, the settlement still faces additional review before becoming final, and some merchant groups are expected to continue challenging the agreement.
