Visa and Mastercard have reached a significant settlement with U.S. merchants regarding swipe fees, marking a potential windfall for consumers. Swipe fees, paid to credit card companies like Visa and Mastercard, have long been a point of contention for merchants who pass these costs onto consumers. The settlement, disclosed on Tuesday, includes a provision to cap credit interchange fees until 2030, with negotiations on fees mandated between the companies and merchant buying groups.
This resolution emerges from a lawsuit initiated in 2005, alleging that merchants were burdened with excessive fees to accept Visa and Mastercard credit cards, violating antitrust laws. In 2018, Visa and Mastercard agreed to pay $6.2 billion in response to a suit brought by a coalition of 19 merchants. However, disputes remained regarding the regulations imposed by Visa and Mastercard and the involvement of non-participating merchants.
Notably, over 90% of the merchants involved in this recent settlement are small businesses, according to Visa. Mastercard, while not admitting wrongdoing, is set to implement changes upon the settlement’s approval, likely occurring in late 2024 or early 2025. Final approval rests with the Eastern District Court of New York.