Visa and Mastercard received preliminary approval from a federal judge for a revised $38 billion antitrust settlement with merchants over excessive credit card processing fees. The deal covers more than 12 million merchants and nears the resolution of litigation that began in 2005 over alleged interchange fee price-fixing. According to Quartz, District Judge Brian M. Cogan advanced the agreement after a different judge rejected a previous $30 billion proposal in June 2024 for failing to lower fees sufficiently.
The terms mandate a 0.1 percentage point reduction in swipe fees over five years and cap standard consumer card rates at 1.25% for eight years. Crucially for retail operations, the agreement dismantles the network rule requiring merchants to accept every card issued by the companies. Retailers now have the authority to selectively accept cards based on type, separating commercial and premium tiers from standard consumer cards, while gaining expanded rights to impose customer surcharges.
Industry opposition persists from groups like the National Retail Federation and Walmart, which argue the terms fail to adequately lower rewards card costs. Objectors maintain that the credit card market remains flawed under the revised conditions. Cogan acknowledged the criticism but noted that perfection was not the benchmark, stating, "The question is not whether the amended settlement constitutes the best possible recovery, end stop — it's whether the amended settlement constitutes the best possible recovery in light of what can be gained and lost through trial."
