Visa and Mastercard are close to finalizing a settlement with U.S. merchants that could resolve a legal battle dating back two decades. The agreement aims to reduce the fees merchants pay for credit card transactions and grant them greater control over which cards they choose to accept, the Wall Street Journal reported citing people familiar with the matter.
Under the proposed terms, Visa and Mastercard would lower interchange fees—typically ranging from 2% to 2.5%—by an average of 0.1 percentage point over several years. Additionally, they would relax the "honor all cards" rule, which currently obligates merchants to accept all cards from a network if they accept any. The Journal reported.
If approved by the court, the settlement could bring noticeable changes for consumers at checkout. Merchants would be allowed to selectively accept certain types of cards, such as non-reward or commercial cards, while potentially rejecting high-fee rewards cards. This shift could impact consumer behavior, as rewards cards have grown increasingly popular but are more costly for merchants to process.
The legal dispute began in 2005, when merchants accused Visa, Mastercard, and major banks of engaging in anticompetitive practices related to interchange fees and card acceptance rules. A previous settlement reached in March 2024 proposed a 0.07 percentage point reduction in fees over five years and offered merchants more flexibility to impose surcharges on credit card payments. However, that deal was rejected by the presiding judge.
The new settlement under discussion is expected to include similar provisions around surcharging, potentially reshaping how credit card transactions are handled across retail environments. A formal announcement could be imminent, pending judicial approval.
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