US judge OKs Visa, Mastercard $38 billion swipe fee settlement
A U.S. judge on Tuesday granted preliminary approval to Visa’s and Mastercard’s revised $38 billion settlement with merchants who accused the card networks of overcharging to process credit card payments.
U.S. District Judge Brian Cogan in Brooklyn ruled nearly two years after another judge rejected a $30 billion version as too small. The settlement, announced last November, is meant to end litigation that began in 2005, when merchants alleged Visa, Mastercard, and banks conspired to violate U.S. antitrust laws through “swipe fees.”
Several trade groups, including the National Retail Federation, the Merchants Payments Coalition, and the National Association of Convenience Stores, objected to the revised settlement as well. They said it would leave merchants with the unwelcome choice of paying too much to accept the popular rewards cards that dominate the card market, or lose revenue by not accepting those cards.
Walmart also objected, calling it a “gift” to Visa and Mastercard that allows anticompetitive conduct to continue for more than 30 years without challenge from large national merchants.
Supporters of the deal included the Electronic Payments Coalition, whose members include Visa, Mastercard, Bank of America, Capital One, Chase, and Citibank.
Swipe fees, or interchange fees, totaled $118.8 billion in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, averaging 2.36%.
The deal would cut swipe fees by 0.1 percentage point for five years and cap standard consumer rates at 1.25% for eight years. Merchants would gain more ability to impose surcharges and choose which card categories to accept, including commercial, premium rewards, and standard consumer cards.
Supporters said this effectively ends the “Honor All Cards” rule requiring merchants to accept all Visa and Mastercard cards or none.
Experts Joseph Stiglitz and Keith Leffler estimated $38 billion in savings by 2031 and $224 billion in total benefits, including for consumers.
The earlier $30 billion settlement would have reduced fees by 0.07 percentage points over five years and also allowed more surcharges. U.S. District Judge Margo Brodie rejected it in June 2024, saying fees would still be above levels absent antitrust violations and that it improperly preserved the “Honor All Cards” rule.
Walmart and other objectors called the changes illusory because merchants would still have to “honor all issuers” in a given network – meaning, for example, they could not accept cards from one bank and reject cards from another.
