NEW YORK—Visa and Mastercard have unveiled a revised settlement with U.S. merchants who long accused the card networks of imposing excessive fees for credit card acceptance, following a federal judge’s rejection of an earlier $30-billion proposal as insufficient, Reuters reported.
The new agreement aims to conclude two decades of antitrust litigation in which merchants alleged that Visa, Mastercard, and major banks conspired to fix swipe fees in violation of U.S. law.
However, merchant groups are already pushing back, arguing the updated deal still fails to resolve the concerns raised by U.S. District Judge Margo Brodie of Brooklyn, whose approval is required after she rejected the previous accord in June 2024, Reuters said.
These groups, including the National Retail Federation and the Merchants Payments Coalition, say businesses would still pay too much, including to accept the popular rewards cards that dominate the card market, Reuters said.
"You can't just suddenly tell more than 80% of your card customers you're not going to take their cards," Stephanie Martz, the NRF's general counsel, said in an interview with Reuters. "You would lose a lot of business."
Interchange fees totaled $111.2 billion in the United States in 2024, up from $100.8 billion in 2023 and quadruple the level in 2009, the NRF said.
The settlement calls for Visa and Mastercard to lower swipe fees, which are now typically 2% to 2.5%, by 0.1 percentage point for five years, Reuters said, adding that merchants would be able to choose whether to accept U.S. cards in specific categories including commercial cards, premium consumer cards including many rewards cards, and standard consumer cards.
Under the revised agreement, standard consumer interchange rates would be capped at 1.25% for eight years—a reduction of more than 25%. The proposal would also give merchants expanded flexibility to add surcharges on card transactions. While the total value of the settlement has not been disclosed, it is expected to exceed the earlier $30 billion deal, Reuters explained.
End Of Marshall-Durbin?
“Today’s agreement between Visa, Mastercard, and major retailers is a welcome development—and hopefully the beginning of the end for misguided attempts in Congress and across the states to legislate interchange through heavy-handed mandates like the Marshall-Durbin Credit Card Competition Act,” said Jason Stverak, chief advocacy officer at the Defense Credit Union Council.
For too long, Stverak asserted, some in Washington have used interchange as a “political football, ignoring the reality that these fees support fraud prevention, cybersecurity, and the very infrastructure that keeps our financial system safe for consumers—including the servicemembers, veterans, and families that defense credit unions proudly serve.”
Stverak said the private-sector resolution shows that the marketplace can evolve and address concerns without Washington interference.
“Congress should take note and step back from proposals that would weaken community-based institutions, reward big-box retailers, and harm consumers’ access to secure, convenient credit,” he said.