Judge Signals Approval for Visa and Mastercard Swipe Fee Settlement

Visa and Mastercard may be winding down a two-decade long court battle with merchants over the fees merchants pay to accept credit cards.

A judge granted preliminary approval Tuesday (June 9) to the companies’ $38 billion settlement with merchants that was announced in November, Reuters reported Tuesday.

The judge said the settlement was “fair, reasonable, and adequate” and that he was likely to approve it, according to the report.

The Electronic Payments Coalition (EPC), which advocates for credit unions, community banks and payment card networks, said in a Tuesday press release that the agreement between Visa, Mastercard and merchants guarantees lower processing rates and other concessions that amount to more than $200 billion over eight years.

“It is a guaranteed win for Main Street and provides meaningful solutions for businesses and consumers,” EPC Executive Chairman Richard Hunt said in the release. “Unfortunately, corporate mega-stores, their lobbyists and their lawyers want to block this agreement to push untested, unworkable mandates that only further pad their profits.”

When the settlement was announced in November, PYMNTS reported that the agreement aimed to end a 20-year legal battle between Visa and Mastercard on one side and merchants on the other over interchange fees.

The case began in 2005 when businesses accused Visa, Mastercard and larger banks of colluding to violate U.S. monopoly laws through the card companies’ collection of interchange fees, which are also known as “swipe fees,” to process transactions.

The settlement would see Visa and Mastercard reduce interchange fees by 0.1 percentage points for five years, permit merchants to choose whether they want to accept U.S. cards in certain categories, cap standard consumer rates at 1.25% and give merchants more freedom to impose surcharges on credit card users.

Not all merchants were pleased with the settlement when it was announced. The Merchants Payments Coalition said in November that the fee reduction was “miniscule” and that Visa and Mastercard would be free to raise fees without restrictions after the temporary cuts expire.

It was reported in December that the National Association of Convenience Stores and the National Retail Federation filed complaints opposing the settlement.

An earlier settlement offer was rejected in 2024, leading Visa and Mastercard to propose the newer one.