A PYMNTS Company

Visa and Mastercard Agree to $199.5 Million Settlement Over Chargeback Rules

By  |  October 13, 2025

Visa and Mastercard have agreed to pay a combined $199.5 million to resolve a long-running class action lawsuit that accused the credit card giants of shifting fraud-related costs to merchants, according to Reuters.

    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 proposed settlement, filed Friday in the U.S. District Court for the Eastern District of New York, awaits approval from Chief Judge Margo Brodie. The litigation, which began in 2016, alleged that Visa and Mastercard acted in concert to alter chargeback rules, effectively leaving businesses responsible for certain losses tied to fraudulent transactions involving lost, stolen, or counterfeit cards, per Reuters.

    Under the disputed framework, merchants faced new liabilities for chargebacks if they failed to upgrade their payment terminals to process chip-enabled cards. According to Reuters, Visa has agreed to pay $119.7 million and Mastercard will contribute $79.8 million as part of the settlement. Two other defendants—Discover and American Express—previously reached their own deals, together paying $32.2 million to settle related claims. All four companies denied wrongdoing while agreeing to resolve the matter.

    Read more: Antitrust Suit Against Apple, Visa, and Mastercard Dismissed by Federal Judge

    In a statement cited by Reuters, Mastercard said it welcomed the resolution and reaffirmed its commitment to advancing technology that enhances transaction security “to protect Mastercard purchases at every step.” Visa and the attorneys representing the merchants did not immediately respond to requests for comment.

    Lawyers for the plaintiffs described the settlement as “an excellent outcome for the class,” noting that it represents roughly 13 percent of the best-case damages estimate and more than half of a conservative benchmark set by the defendants’ experts, according to Reuters.

    The new agreement is separate from a 2019 settlement in which Visa and Mastercard agreed to pay $5 billion to merchants over allegations of fixing credit and debit card fees.

    The case is titled B&R Supermarket Inc et al v. Visa Inc et al, U.S. District Court, Eastern District of New York, No. 1:17-cv-02738-MKB-JAM.

    Source: Reuters