INDUSTRYPAYMENT PROCESSING
The Visa and Mastercard swipe fee settlement: what actually changes for merchants
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Payment Review Editorial Team
Payment Review Editorial Team
On June 9, 2026, Judge Brian Cogan of the Eastern District of New York granted preliminary approval to the revised class settlement between Visa, Mastercard and roughly 12 million US merchants, calling it "fair, reasonable, and adequate." The litigation started in 2005. A previous version of the deal was thrown out in June 2024. Most of the large merchant trade groups still oppose this one and have said they will appeal. So the honest summary is that something significant has moved, and nothing has changed on your statement yet.
This article sets out what the settlement agreement actually says, working from the agreement Visa filed with the SEC rather than from the press coverage, then looks at which kinds of merchants would see money from it and which would not.
The case, In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, has been running since 2005. Merchants alleged that Visa, Mastercard and their issuing banks fixed interchange fees and enforced rules, above all honor-all-cards, that stopped merchants from steering customers to cheaper cards. A separate monetary settlement paid merchants for past conduct. This agreement is the injunctive one: it changes the rules going forward rather than writing cheques for the past.
The first attempt, announced in March 2024 and widely reported as worth about $30 billion, offered a reduction of at least 7 basis points for five years and a rollback of posted rates by 4 basis points for three years. Judge Margo Brodie rejected it on June 25, 2024. Her reasoning matters because the new deal was written to answer it: the settlement "provides the least benefit to the merchants with the most valuable claims," since large national retailers already negotiate their own rates and could not use the surcharging rights in states that restrict surcharging, and it left honor-all-cards untouched.
The revised agreement was announced on November 10, 2025, and has been reported at about $38 billion in value. It deepened the rate cut, added the standard-card cap, and took on honor-all-cards directly.
There are three separate rate commitments in the agreement, and they are easy to run together.
Each network must bring its system-wide, volume-weighted average effective credit interchange rate on US domestic transactions to at least 10 basis points below the combined Visa and Mastercard average for the twelve months ending March 31, 2025. It starts no earlier than four months after the settlement approval date, timed to the networks' regular April and October rate releases, and it runs for five years.
Two things follow from the wording. It is a reduction in an average, not in every rate: some categories may fall by more, and some may not move at all. And it is measured against a fixed 2025 baseline, so a network that had already been drifting upward would have further to come down.
For the same five years, neither network may raise any posted rate for commercial, premium consumer or standard consumer credit above the level in effect on March 31, 2025. This is the part that stops the average reduction being funded by increases elsewhere, at least on posted rates. Negotiated rates for large merchants sit outside it.
Posted interchange on Visa Traditional and Traditional Rewards, and on Mastercard Core and Enhanced Value, may not exceed 125 basis points, and may not be raised above that for eight years. This is the longest-lived term in the agreement and the one most likely to be felt by a small merchant, because it is a hard ceiling rather than an average.
The catch is coverage. Visa Signature, Signature Preferred and Infinite, and Mastercard World, World Elite and their variants, are "premium consumer" cards under the agreement and are not capped. Commercial cards are not capped either. The Merchants Payments Coalition's objection is that this "includes loopholes allowing banks to simply make all of their cards into rewards cards." Whether issuers do that is a prediction, not a fact, but the incentive is there.
Within 90 days of the approval date, both networks must change their rules so that a US merchant may accept or decline all debit cards, all commercial credit cards, all standard consumer credit cards, and all premium consumer credit cards, in any combination. A merchant can, for instance, take standard consumer credit and debit while refusing premium rewards cards and commercial cards.
Three limits are written into the same paragraphs. First, the choice is by category, never by issuer: if you accept premium consumer cards, you accept all of them from every bank. Second, the networks may keep an honor-all-cards rule inside each category, so you cannot accept Visa Signature and refuse Visa Infinite. Third, the networks may not build a rate structure that singles out a specific merchant for a higher rate because it declined a category, though they may offer generally available lower rates to merchants that accept everything.
To make any of this workable at a counter, issuers must put the words "Business," "Corporate" or "Commercial" on new commercial cards and "Infinite" or "Signature" on new premium cards, and the networks must maintain the technology for acquirers to identify card type at the terminal. Merchants may also pilot category declines at some outlets under the same trade name rather than all of them.
Whether a merchant will actually refuse a customer's rewards card is a commercial question rather than a legal one. Analysts quoted by Payments Dive expect most merchants to use the new surcharging rights to price premium cards rather than turn them away, and American Express, which is not a party, has said publicly that it wants its cardholders not to be "discriminated against."
Visa and Mastercard have permitted credit card surcharging in the US since 2013, at the lower of the merchant's cost of acceptance or a cap that Visa lowered to 3% in April 2023. The settlement keeps that cap, keeps the choice between surcharging at brand level or product level but not both, and keeps the 30 days' written notice to your acquirer and the disclosure requirements at the point of sale and on the receipt.
What it removes is the rule that entangled Visa and Mastercard surcharging with American Express. Under the old rules a merchant could surcharge Visa only on the same terms as every equal-or-higher-cost competitor that restricted surcharging, and American Express's non-discrimination policy required parity across all cards. The practical result, as the merchants' economist put it in the earlier settlement filings, was that merchants accepting Amex could not surcharge Visa or Mastercard at all. The 2024 version of the deal only partly fixed this, allowing 1% unless Amex and Discover were surcharged too. The new agreement states plainly that a merchant may surcharge Visa or Mastercard credit "regardless of whether the merchant accepts or surcharges any other payment card."
State law still sits on top. Connecticut, Maine and Massachusetts prohibit surcharging outright, Colorado and Oklahoma cap it at 2%, and New York, New Jersey and Minnesota impose disclosure rules that go beyond the networks'. Nothing in a private settlement between merchants and card networks changes that; our guide to surcharging rules sets them out state by state.
This is the part the coverage tends to skip. Interchange is what the card-issuing bank receives. Whether a reduction in interchange reaches you depends entirely on how your processor prices.
If your statement shows interchange as a pass-through line plus a fixed markup, a lower interchange rate lowers your bill the month it takes effect.
Providers on the site that price this way include Helcim (interchange plus 0.4% and $0.08 in person, falling with volume), Dharma Merchant Services (interchange plus 0.15% and $0.08 in person), Stax, which passes interchange through at cost under a monthly subscription, and Payment Depot, whose markup is quoted rather than published. Rates are as stated in our reviews as of September 1, 2026.
A worked example: on $100,000 a month of credit volume, 10 basis points is $100 a month, or $1,200 a year. On $1 million a month it is $12,000 a year. Real. Not life-changing. And it is an average, so your own mix of cards decides whether you land above or below it.
If you pay one blended rate, the saving lands with your processor, and reaches you only if it lowers its published price. Square charges 2.6% + $0.15 in person and 2.9% + $0.30 online; Stripe charges 2.9% + $0.30 online; PayPal charges 2.89% + $0.29 online; Shopify Payments charges 2.9% + $0.30 on its Basic plan; Toast charges 2.49% + $0.15 in person on its Point of Sale plan. None of those numbers is contractually tied to interchange, and none has to move when interchange does.
That is not an argument against flat-rate pricing, which buys simplicity and often wins below a few thousand dollars a month. It is an argument for knowing which model you are on before you read a headline about swipe fees coming down and assume it applies to you.
The objectors are not a fringe. The National Retail Federation, the National Association of Convenience Stores, the National Restaurant Association, Walmart, Circle K's parent Alimentation Couche-Tard and others filed objections in December 2025, and NACS's general counsel told Payments Dive after the June ruling that the court would see disapproval "in even larger numbers" at final approval and promised an appeal to the Second Circuit. The Merchants Payments Coalition said the day of the ruling that "the vast majority of merchants oppose this proposed settlement."
Their case rests on proportion. The Merchants Payments Coalition puts the average swipe fee in 2025 at 2.36%, so 10 basis points is a reduction of about 4%, for five years, on a fee the coalition says has risen roughly 80% since the pandemic. Payments Dive reported total US interchange of $187 billion in 2024, $111 billion of it on Visa and Mastercard credit. Against that, the merchants give up their claims for eight years and, in the objectors' words, the settlement "perpetuates the interchange fee conspiracy and forbids nearly every merchant in the country from challenging it."
The networks and their allies read the same terms differently. The Electronic Payments Coalition has put the total value of the concessions at more than $200 billion over eight years, and Visa described the deal as "meaningful relief, more flexibility and options." Judge Cogan's own framing at preliminary approval was that the question "is not whether the settlement is ideal by class members' varying standards, but whether it is fair, reasonable, and adequate."
