Judge Gives Preliminary Approval To Visa, Mastercard Swipe-Fee Settlement Despite Merchant Objections
By CU Today Staff —
NEW YORK—A federal judge has granted preliminary approval to a revised settlement between Visa and Mastercard and more than 12 million U.S. merchants in a long-running antitrust battle over credit-card swipe fees, rejecting arguments that widespread opposition should derail the deal before it moves to the next stage, Reuters reported.
U.S. District Judge Brian Cogan said it was too early to determine whether objections represented a broad consensus among merchants or were "confined to a vocal minority," according to court proceedings.
The proposed settlement, valued by supporters at approximately $38 billion in merchant savings through 2031, would reduce Visa and Mastercard interchange fees by 0.1 percentage point for five years, cap standard consumer-card rates at 1.25% for eight years, and give merchants greater flexibility to reject certain categories of cards and impose surcharges. The agreement follows the rejection of a smaller $30-billion proposal in 2024 by a different federal judge, Reuters said.
Major merchant groups, including the National Retail Federation, the National Association of Convenience Stores, Walmart and the Merchants Payments Coalition, argued the revised agreement still fails to address what they describe as a broken payments market. Critics contend merchants would remain unable to reject cards from specific issuers and would continue paying excessive fees on premium rewards cards despite the proposed changes.
Cogan acknowledged that many objections had merit but said the legal standard was not whether the settlement represented the best possible outcome, but whether it was reasonable compared with the risks of continued litigation. Visa and Mastercard welcomed the ruling, while merchant groups signaled they would continue their opposition as the case moves toward a final approval hearing, Reuters said.
The litigation, which began in 2005, is one of the largest and longest-running antitrust cases involving the U.S. payments industry.
Originally reported by CU Today.