Visa and Mastercard Merchant Settlement Offer Targets Rewards Cards

Visa and Mastercard’s 20-year legal battle over interchange fees is reportedly winding down.

The two payment giants are close to a settlement with merchants that will reduce the fees stores pay and give them more freedom to reject certain cards, The Wall Street Journal (WSJ) reported Saturday (Nov. 8), citing sources familiar with the matter.

Those sources say the deal would see Visa and Mastercard reduce credit card interchange fees, which are in many cases between 2% and 2.5%, by an average of around 0.1 percentage point over the course of several years. The companies would also relax rules requiring stores that accept one of a network’s credit cards to accept all of them.

The two sides could announce a deal soon, and would need court approval to go into effect, the sources told WSJ. PYMNTS has contacted Visa for comment but has not yet gotten a reply. A spokesperson for Mastercard offered this statement:

“We believe that this is the best resolution for all parties, delivering the clarity, flexibility and consumer protections that were sought in this effort. Smaller merchants will gain in this settlement – more acceptance choices, reduced costs and simplified rules. Even more, it allows us to focus our energies on continuing to give consumers, small businesses and larger merchants what they expect from Mastercard – a better payments experience, strong value and peace of mind

As WSJ noted, a new agreement could bring major changes to consumers when they shop. For example, merchants that accept one type of Visa card wouldn’t need to accept all Visa credit cards. The new arrangement could also divide credit card acceptance into multiple categories such as rewards credit cards, credit cards with no rewards programs, and commercial cards, the sources said.

Stores could turn away rewards cards, as they have higher fees and have become very popular with shoppers in recent years, the report added. But stores that decline to take those cards run the risk of losing sales.

The case has been going on since 2025, when merchants filed suit against both card companies and large banks, claiming that their interchange fees and acceptance terms amounted to monopolistic behavior.

Last March, both sides came to an agreement to reduce interchange fees by around 0.07 percentage point on average over five years. The agreement would have merchants more freedom to engage in surcharging, or charging consumers extra when they pay by credit card. The judge handling the case rejected the deal. The new settlement under discussion would also involve surcharging, the sources said.

Research by PYMNTS Intelligence shows that while many cardholders appreciate earning and redeeming loyalty rewards, the actual use of these benefits varies significantly. Only 20% of cardholders redeem credit rewards at least once per month, though frequent card users do so more often.