Visa, Mastercard Reach Historic Swipe Fees Settlement

The two biggest card networks in the United States – Visa and Mastercard – have agreed to cap interchange fees for five years, among other terms, to settle merchant litigation that lasted almost 20 years, according to Payments Dive. The agreement was reached on March 26, 2024.

The suit was brought by merchants over card “swipe fees” – also known as interchange fees, which refers to the hidden cost paid by merchants to card-issuing banks and credit card companies for processing credit card and debit card transactions. The case focused on merchants arguing that the banks and networks worked to inflate those fees as well as prohibit merchants from steering customers toward payment alternatives.

Some of the biggest retailers in the US have been involved in the litigation, including Home Depot, 7-Eleven, and Starbucks, in addition to the 90% of small businesses that made up the plaintiffs in the case.

According to Visa, the settlement lowers credit card interchange rates and caps the rates into 2030. The settlement also provides updates to several key network rules giving merchants more choice in how they accept digital payments.

What the Settlement Means for Merchants

The agreement’s multi-year benefits for businesses include:

• Lower interchange rates: The settlement will reduce credit interchange rates for U.S. merchants, comprised largely of small businesses.

• Interchange rates will not go up: The agreement will cap the reduced credit interchange rates for five years, providing an unprecedented level of cost certainty long sought by merchants.

• New ways to manage costs: The settlement gives merchants greater flexibility at the point-of-sale, including the opportunity to steer to preferred payment methods and more optionality around surcharging. It also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.

“By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified,” said Kim Lawrence, President, North America, Visa. “Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”

Learn More About the Swipe Fees Settlement:

Contact us online or call 1-800-621-8931.

Check out i3 Commerce Technology’ newsroom.