Visa and Mastercard have announced a revised $38 billion settlement aimed at resolving two decades of litigation over credit card “swipe fees.” The proposed agreement, filed on Monday, seeks to address concerns raised by U.S. District Judge Margo Brodie, who rejected an earlier $30 billion deal in June 2024 as insufficient, Reuters reported.
The settlement is designed to conclude a 20-year antitrust battle in which merchants accused Visa, Mastercard, and major banks of conspiring to inflate interchange fees—the charges businesses pay to process card transactions. These fees, which reached $111.2 billion in the United States in 2024, have quadrupled since 2009, according to the National Retail Federation (NRF).
Under the new proposal, Visa and Mastercard would lower average swipe fees by 0.1 percentage point for five years. Merchants would also gain flexibility to choose which types of cards they accept, including the ability to reject high-cost premium and commercial cards. Standard consumer card rates would be capped at 1.25% for eight years, a reduction of more than 25%.
The agreement additionally expands merchants’ ability to impose surcharges of up to 3% on card payments, a move intended to offset processing costs.
Visa, headquartered in San Francisco, said the settlement provides “meaningful relief” to merchants of all sizes, while Mastercard, based in Purchase, New York, emphasized that small businesses stand to benefit the most.
Economists Joseph Stiglitz, a Nobel laureate, and Keith Leffler of the University of Washington, estimated that the new framework could save merchants $38 billion by 2031 and up to $224 billion overall through enhanced competition and pricing efficiency.
Despite these figures, merchant groups such as the National Retail Federation and the Merchants Payments Coalition remain opposed. They argue the deal fails to resolve the structural issues that keep fees high. “You can’t just suddenly tell more than 80% of your card customers you’re not going to take their cards,” said Stephanie Martz, NRF’s general counsel, emphasizing that small retailers would still face disproportionate costs.
Judge Brodie previously criticized the earlier settlement for maintaining the controversial “Honor All Cards” rule, which requires merchants to accept all Visa and Mastercard products or none. The new proposal claims to address this concern, but merchant advocates contend that the networks still wield excessive control over transaction pricing and competition.
The Electronic Payments Coalition, representing banks and card issuers including Bank of America, Capital One, JPMorgan Chase, and Citibank, supports the revised agreement. Executive Chairman Richard Hunt noted that the proposal offers greater reductions than those proposed under the Durbin-Marshall bill, a bipartisan Senate effort to regulate interchange fees.
However, critics such as Doug Kantor, general counsel of the National Association of Convenience Stores, argue the settlement “lets Visa and Mastercard, without any limitation, raise their own rates,” undermining any real reform.
While Visa and Mastercard deny wrongdoing, the settlement—if approved—would mark one of the largest antitrust resolutions in U.S. financial history. Judge Brodie’s approval remains the final hurdle for an agreement that could reshape how billions of card payments are priced across the American retail economy.