Visa, Mastercard Agree to Lower Credit Card Fees in Landmark Merchant Settlement

Visa and Mastercard reached an estimated $30 billion settlement to limit credit and debit card fees for merchants, with some savings likely to be passed on to consumers through lower prices.

The antitrust settlement announced on Tuesday is one of the largest in U.S. history, and if it receives court approval would resolve most claims in nationwide litigation that began in 2005.

Merchants have long accused Visa and Mastercard of charging inflated swipe fees, or interchange fees, when shoppers used credit or debit cards, and barring them through “anti-steering” rules from directing customers toward cheaper means of payment.

Swipe fees typically include small, fixed fees plus a percentage of total sale amounts, and average about 1.5% to 3.5% per transaction according to

Under the settlement, Visa and Mastercard would reduce swipe rates by at least four basis points – 0.04 percentage points – for three years and ensure an average rate that is seven basis points below the current average for five years.

Both card networks also agreed to cap rates for five years and remove anti-steering provisions.

Merchants will have more discretion to offer discounts or impose surcharges on cards with higher interchange fees.

The settlement came one year after the federal appeals court in Manhattan upheld a $5.6 billion class action settlement with Visa and Mastercard, covering about 12 million merchants.

Tuesday’s settlement requires approval by U.S. District Judge Margo Brodie in New York City’s Brooklyn borough, likely not before late 2024 or early 2025, and appeals are possible.

“It’s a bad deal for merchants,” said Doug Kantor, general counsel of the National Association of Convenience Stores, in an interview. “It provides very small, very temporary relief, but afterward Mastercard and Visa will be free to raise rates, and the agreement doesn’t provide a mechanism to slow an increase.”

The Retail Industry Leaders Association, which represents businesses that employ more than 42 million Americans, said the settlement required closer review but amounted to “a mere drop in the bucket.”