Visa, Mastercard Reach Groundbreaking Settlement with Merchants to Lower Swipe Fees: What You Need to Know

Visa and Mastercard Reach $30 Billion Settlement to Reduce Merchant Fees

In a major development, Visa and Mastercard have reached a settlement with merchants aimed at lowering merchant fees. The case has been ongoing for decades and involved not only the credit card networks but also the banks that issue cards with them. The settlement is expected to reduce swipe fees paid by merchants when customers use Visa or Mastercard by $30 billion over a five-year period.

This agreement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, it must still receive approval from the US District Court for the Eastern District of New York. Usually, swipe fees cost merchants around 2% of the total transaction, but for premium rewards cards, it can go up to 4%. The settlement would lower these fees by at least 0.04 percentage points for a minimum of three years.

Visa and Mastercard have assured that the rewards received by cardholders will not be impacted by the settlement, and Americans’ access to credit will not be restricted as a result either. Mastercard spokesman Seth Eisen confirmed that the settlement would not affect rewards or credit access for cardholders. In related news, Discover and Capital One recently announced a merger that will create the largest credit card company in the country upon approval by regulators and shareholders. Following

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