Visa and Mastercard have agreed to a revised $38 billion swipe fee settlement with merchants, aiming to end two decades of legal battles over alleged excessive credit card fees. The companies hope the new proposal will meet the approval of a U.S. judge who previously rejected a smaller $30 billion accord.
The swipe fee settlement seeks to resolve claims that Visa, Mastercard, and major banks conspired to violate U.S. antitrust laws by fixing the fees merchants pay when customers use their cards. These “swipe fees,” also known as interchange fees, reached $111.2 billion in the United States in 2024, according to the National Retail Federation (NRF).
Under the new agreement, Visa and Mastercard would lower swipe fees, which averaged 2.35% in 2024, by 0.1 percentage point for five years. The swipe fee settlement also caps standard consumer rates at 1.25% for eight years — a reduction of more than 25%. Merchants would gain more flexibility in deciding whether to accept certain types of cards, including commercial and premium rewards cards.
Additionally, merchants will be allowed to impose surcharges of up to 3% on card transactions, giving them more control over how they offset processing costs. Visa and Mastercard said the settlement will provide meaningful relief, particularly for small businesses that have long struggled with high payment costs.
However, several merchant associations, including the NRF and the Merchants Payments Coalition, remain opposed. They argue that the deal does not go far enough to resolve concerns raised by U.S. District Judge Margo Brodie, who dismissed the earlier proposal as inadequate in June 2024.
Despite the criticism, economic experts hired by the merchant plaintiffs estimate that the reforms could save businesses up to $224 billion by 2031 and increase competition in the payments market.
Visa and Mastercard have denied wrongdoing in the case. Their shares remained largely unchanged following the announcement of the swipe fee settlement.
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