Visa, Mastercard win preliminary approval for $38 billion swipe fee settlement in U.S.

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Visa, Mastercard swipe fee settlement

Highlights

U.S. District Judge Brian Cogan granted preliminary approval to a revised $38 billion settlement requiring Visa and Mastercard to reduce swipe fees and cap standard consumer rates at 1.25% for up to eight years.
The agreement would give merchants greater flexibility to surcharge and accept specific card types, with economists projecting merchant savings of $38 billion and $224 billion in consumer and merchant benefits by 2031.
Major trade groups and Walmart oppose the deal, arguing it maintains anticompetitive practices, while swipe fees for Visa and Mastercard are projected to rise from $111.2 billion in 2024 to $118.8 billion in 2025.

Revised settlement terms and court ruling

As reported by Reuters, U.S. District Judge Brian Cogan in Brooklyn, New York grants preliminary approval on Tuesday to the revised agreement, nearly two years after another federal judge rejected a smaller proposed settlement. The litigation dates back to 2005, when merchants accused Visa, Mastercard and banks of conspiring to violate U.S. antitrust law through swipe fees charged on credit card transactions.

The latest settlement, announced in November, calls for Visa and Mastercard to lower swipe fees by 0.1 percentage point for five years, while standard consumer rates would be capped at no more than 1.25% for eight years. Merchants would also gain more flexibility to impose surcharges on customers and to decide whether to accept categories of cards, including commercial cards, premium consumer cards and standard consumer cards.

Supporters say the proposal would end the Honor All Cards rule, which requires merchants to accept all Visa and Mastercard cards or none. Two experts hired by the plaintiffs, economist Joseph Stiglitz and University of Washington professor Keith Leffler, say the changes could save merchants $38 billion by 2031 and generate $224 billion in overall benefits, including for consumers.

Merchant opposition and industry impact

Several trade groups, including the National Retail Federation, the Merchants Payments Coalition and the National Association of Convenience Stores, continue to oppose the revised settlement. They argue it still leaves merchants choosing between paying high fees to accept popular rewards cards or risking lost sales by refusing them.

Walmart is among the objectors and calls the agreement a gift to Visa and Mastercard, saying it would lock in anticompetitive conduct that has persisted for more than 30 years. The retailer and other critics also argue the changes are largely illusory because merchants would still need to honor all issuers within a network, meaning they could not accept cards from one bank while rejecting cards from another.

The stakes remain large for the payments sector. According to the Merchants Payments Coalition, swipe fees for Visa and Mastercard in the United States total $118.8 billion in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, with the average fee at 2.36%.

Our earlier article on opposition to the Faster Labor Contracts Act (H.R. 5408) outlined how hundreds of business and trade groups warned the bill could shift first-contract negotiations from voluntary bargaining to federally driven arbitration under fixed timelines. We noted critics’ concerns that the measure would expand government influence over private-sector workplace terms and create broad operational and legal impacts across industries such as retail, manufacturing, construction, and small business.

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