How the Visa and Mastercard Settlement Could Change Your Credit Card Use

After decades of legal battles, Visa and Mastercard have reached a proposed settlement addressing high merchant processing fees, potentially transforming how merchants accept cards and handle consumer costs.

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What the Settlement Covers

The settlement ends a 20-year class action lawsuit filed by retailers accusing Visa and Mastercard of anti-competitive, “cartel-like” pricing practices.

It focuses on reducing processing fees—which typically exceed 2% per transaction and indirectly increase consumer prices—and aims to give merchants more control over card acceptance and surcharges.

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Changes for Consumers

Merchants’ flexibility: Businesses can now reject specific cards, especially premium or high-reward cards that have higher processing costs, but they must accept all cards in any chosen category (debit or credit).
Surcharges allowed: Merchants may add surcharges up to 3% on credit card payments to offset processing fees.
Fee reduction: Visa and Mastercard will lower swipe fees by 0.1 percentage points annually over the next five years, contributing to gradual cost relief.

Impact on Rewards Cards

Most consumers will see minimal immediate impact as about 90% of transactions involve rewards cards, which merchants are unlikely to reject outright.

However, over time, surcharges could become more common, and banks might reduce card rewards or benefits to account for merchants passing on costs.

Timeline and Next Steps

The settlement requires federal court approval before implementation.

If approved, changes will be phased in over months to years, allowing merchants and consumers to adjust to new payment options and fees.

Additional Resources for More Information

Visa official updates: visa.com
Mastercard news and press releases: mastercard.com
Federal Trade Commission (FTC) insights on payment processing: ftc.gov/paymentprocessing
Consumer reports on credit card fees and surcharges: consumerreports.org
Retail industry perspectives at National Retail Federation: nrf.com