A PYMNTS Company

Federal Judge Suggests Visa and Mastercard Can Afford Higher Settlement

By  |  June 30, 2024
Visa, Mastercard

U.S. District Judge Margo Brodie in Brooklyn rejected a preliminary $30 billion settlement between Visa Inc. (V.N) and Mastercard Inc. (MA.N) and merchants who claimed they were overcharged on swipe fees. Judge Brodie’s decision, detailed in an 88-page opinion released on Friday, suggests that Visa and Mastercard could likely withstand a much larger settlement than what was proposed.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The rejected accord, announced three days prior to the release of Brodie’s opinion, aimed to address the concerns of over 12 million merchants by lowering and capping the interchange fees—commonly known as swipe fees—that they pay to handle transactions. However, the judge criticized the proposed settlement, pointing out that the estimated $6 billion in annual savings for merchants was insufficient when compared to the $100 billion in fees they paid in 2023 to accept Visa and Mastercard payments.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    “Without evidence of Visa’s and Mastercard’s profitability, the court cannot say with certainty that defendants can withstand a greater judgment; however, the evidence strongly suggests that they could withstand a substantially greater judgment,” Judge Brodie wrote, emphasizing the need for a more substantial resolution.

    Related: Judge Rejects $30 Billion Visa, Mastercard Swipe Fee Deal

    The antitrust litigation, which began in 2005, may proceed to trial if a new settlement isn’t reached. The long-running case has seen merchants and card issuers at odds over the fees charged for processing credit and debit card transactions.

    Both Visa and Mastercard expressed disappointment with the judge’s decision. Visa reiterated its belief that a direct resolution with merchants is the best way forward, while Mastercard noted that the settlement would have promoted competition and provided millions of businesses with “substantial certainty and enormous value in how they manage their card acceptance activities.”

    Source: Reuters