Visa, Mastercard Win Key Court Victory in $38bn Swipe-Fee Settlement, but Battle Over Card Market Power Is Far From Over

A U.S. federal judge has granted preliminary approval to a revised $38 billion settlement between merchants and payment giants Visa and Mastercard, marking a major milestone in a long-running antitrust dispute. The decision by U.S. District Judge Brian Cogan moves the agreement closer to final approval and could reshape how merchants accept card payments. The case dates back to 2005, when merchants accused Visa, Mastercard, and major issuing banks of conspiring to inflate interchange fees. The revised agreement emerged after an earlier $30 billion settlement was rejected in 2024. Under the agreement, Visa and Mastercard will reduce interchange fees by 0.1 percentage point for five years, cap standard consumer card rates at 1.25% for eight years, and give merchants broader authority to impose surcharges and decide which card types to accept. The final provision weakens the longstanding "Honor All Cards" framework. The settlement could have important implications for the lucrative rewards-card business, giving retailers more leverage to reject certain categories of cards. However, opposition from major retailers remains strong, with groups including the National Retail Federation arguing that the settlement still leaves fundamental competitive issues unresolved. Merchants will still be unable to selectively reject cards issued by specific banks. According to data, Visa and Mastercard swipe fees reached approximately $118.8 billion in 2025. The plaintiffs' economic experts estimate that the agreement could save merchants roughly $38 billion through 2031 and generate broader economic benefits worth as much as $224 billion. Although the agreement introduces greater flexibility for merchants, it stops short of fundamentally restructuring the card-payment market. The broader antitrust debate is unlikely to disappear as regulators globally scrutinize payment fees and network power.

(Source：Tekedia)