Visa and Mastercard Reach $38,000,000,000 Settlement Over Alleged High Swipe Fee Charges: Report

The two largest payment processing networks in the world have reportedly revised their settlement offer to merchants who accuse them of charging too much to accept their credit cards.

Visa and Mastercard have reached a $38 billion settlement agreement in a move that could end 20 years of litigation arising from claims that the payments giants conspired with banks to violate US antitrust law through the collection of swipe fees, reports Reuters.

Visa and Mastercard charge swipe fees, also known as interchange fees, to merchants for processing card transactions. These charges typically range from 2% to 2.5%, averaging 2.35% in 2024. 

According to the National Retail Federation, the largest U.S. retail trade group, swipe fees totaled $111.2 billion in the United States in 2024, up from $100.8 billion in 2023 and fourfold the figure in 2009.

The settlement calls for the lowering of swipe fees by 0.1 percentage point for five years. Merchants would also be able to decide whether or not to accept cards in specific categories and get the option to impose surcharges up to 3% when their customers pay by card. Standard consumer rates would likewise be capped at 1.25% for eight years, representing a reduction of more than 25%.

The development comes after U.S. District Judge Margo Brodie rejected a $30 billion settlement in June, which would have lowered swipe fees by 0.07 percentage points over five years. 

The judge said that the $6 billion in annual savings for merchants was paltry compared with how much Visa and Mastercard could still charge.

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