Visa and Mastercard Near Settlement on Swipe Fees Amid Two-Decade Legal Battle
Visa and Mastercard are finalizing a landmark agreement with U.S. merchants to resolve a 20-year legal dispute over credit card swipe fees. The proposed deal, reported by The Wall Street Journal, follows a federal judge's rejection of an earlier settlement in 2024. At stake are billions in transaction fees—currently averaging 2%-2.5% per sale—that generated $72 billion for card issuers in 2023 alone.
The settlement WOULD implement a 0.1 percentage point reduction in swipe fees phased over several years. While marginal on individual transactions, the aggregate impact across Visa and Mastercard's payment networks could shift tens of billions in revenue. More significantly, the agreement would dismantle the 'honor-all-cards' rule, allowing merchants to segment acceptance by card type—rewards, non-rewards, and business categories.
