Visa Mastercard Settlement Reduces Merchant Fees
Visa Mastercard settlement trims interchange fees and lets merchants reject some card categories; court approval risk will shape trading positioning.
KEY TAKEAWAYS
- The settlement reduces average interchange fees by about 0.1 percentage point for several years.
- It revises the honor all cards rule, letting merchants reject whole card categories at checkout.
- The agreement remains subject to U.S. District Court approval and faces risk from the Credit Card Competition Act.
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Visa Inc. and Mastercard Inc. announced on Nov. 10, 2025, between 08:23 and 09:07 ET a revised settlement with U.S. merchants that reduces interchange fees and allows stores to decline certain card categories. The settlement is subject to court approval and legislative scrutiny.
Settlement Terms and Legal Context
The revised agreement lowers average interchange fees by about 0.1 percentage point for several years, according to court filings. Interchange fees are the charges merchants pay on card transactions.
The deal modifies the “honor all cards” rule, permitting merchants to choose among three card categories: non-rewards credit cards, rewards credit cards, and commercial cards. Merchants may reject entire categories, such as rewards or commercial cards, but must accept all cards within any category they decide to serve. This preserves uniform acceptance within chosen categories while giving merchants more control over which card types appear at checkout.
The settlement stems from a 2005 class-action lawsuit alleging Visa and Mastercard violated antitrust laws by centrally setting swipe fees. Previous settlement proposals, including a $30 billion deal, were rejected by courts for failing to address fee-setting and card acceptance rules adequately. In 2024, U.S. District Judge Margo Brodie rejected a prior proposal for similar reasons. Some merchant groups and industry stakeholders continue to view the new concessions as insufficient.
Industry Scale and Legislative Outlook
Visa and Mastercard credit-card swipe fees totaled $111.2 billion in 2024, with total credit and debit card fees reaching $187.2 billion. The average swipe fee for merchants was 2.4% that year.
The settlement awaits approval from the U.S. District Court for the Eastern District of New York. No regulatory agency approvals had been announced as of Nov. 10, 2025. Merchant groups remain critical of the deal’s limited fee reductions and narrow changes to card acceptance rules.
Congress is considering the Credit Card Competition Act, which would require large banks to enable card processing over unaffiliated networks. If enacted, the legislation could further reshape competition and fees in the payments industry.
