Visa-Mastercard Swipe Fee Settlement: What Merchants Should Know

The Visa Mastercard swipe fee settlement faces a November 2026 final hearing. See what would change at checkout and what a small merchant could save.

Adrian ReyesSenior Payments & Fintech Editor

November 6, 2026 · 9 min read

Woman in a gray top holding a marker beside a whiteboard sketch of a rising profits line chart in an office

Photo: Pixabay

On this page 6 sections

What Happened: The March 2024 Proposed Settlement
Why Judge Brodie Rejected the Deal in June 2024
The November 2025 Settlement and Where It Stands
What Could Change at Checkout: Surcharging, Premium Cards and Honor All Cards
Realistic Savings From the Visa Mastercard Swipe Fee Settlement
Key Dates and How to Track the Case

Key takeaways

No merchant gets a check from this settlement. It changes network rules and rates. You are in the class automatically, and you can't opt out.
In an illustrative $50,000-a-month store, the interchange cuts come to about $39 a month at most, and only if your pricing passes them through.
Turning away premium cards only pays off if very few of those customers leave. In the illustrative case, it loses money once about 1 in 40 walk away.
Nothing changes until final approval, and American Banker reported that appeals could push full implementation into 2029.

The Visa Mastercard swipe fee settlement that matters to most merchants right now is the November 2025 deal, and it isn't final yet. Judge Brian Cogan of the Eastern District of New York gave it preliminary approval on June 9, 2026. A final approval hearing is set for November 2026 in Brooklyn. If the court approves it and it survives any appeal, average credit interchange would drop by 0.10 percentage point for five years and standard consumer credit cards would be capped at 1.25%. Merchants could also refuse whole categories of Visa and Mastercard credit cards, such as premium rewards cards.

This is the second attempt. The court rejected a March 2024 version in June 2024. Neither deal pays out any checks, because both change network rules and rates instead of paying money. For a typical small merchant, the rate cuts alone come to tens of dollars a month. The new options for card acceptance and surcharging could matter more.

What Happened: The March 2024 Proposed Settlement

The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (No. 1:05-md-01720, E.D.N.Y.). It began in 2005 and has two merchant classes. The damages class settled for cash years ago. According to Visa's fiscal 2026 annual report, the court granted final approval on December 13, 2019, and the Second Circuit affirmed on March 15, 2023. The injunctive relief class works differently because it asks for rule changes, not money.

That class was certified on September 27, 2021, without opt-out rights. It covers every merchant that accepted Visa or Mastercard cards in the U.S. at any time from December 18, 2020, until final judgment is entered. If you take cards, you're a member, whether or not a lawyer ever contacts you.

In March 2024, Visa and Mastercard agreed to settle with this class. Reuters reported the main terms. The average swipe fee would fall by at least 0.04 percentage point for three years and stay at least 0.07 point below the then-current average for five years. The deal was valued at about $30 billion. It also made surcharging depend on how a merchant treated other card brands. A JD Supra analysis explains that merchants could surcharge Visa and Mastercard credit up to 3% only if they also surcharged American Express. Otherwise they were limited to 1%.

Why Judge Brodie Rejected the Deal in June 2024

On June 25, 2024, U.S. District Judge Margo Brodie denied preliminary approval and said she was unlikely to grant final approval. Her 88-page written opinion followed within days. Some recaps place the rejection in late 2024. The court record, which Visa repeats in its SEC filings, dates it June 25, 2024.

She objected to the deal's size and fairness. As PYMNTS reported, she called the estimated $6 billion in annual savings "paltry" compared with the $100 billion merchants paid in Visa and Mastercard interchange in 2023. She also found the networks could afford a substantially larger settlement, and that the benefits would flow "disproportionately and inequitably to small, local merchants like the Class Representatives" and away from larger merchants. Trade groups had argued that the relief was small and temporary and would make future challenges harder. Class members give up legal claims in exchange for the relief, and the court found that trade lopsided.

The November 2025 Settlement and Where It Stands

On November 10, 2025, Visa and Mastercard signed a superseding settlement with the same class. Visa's Form 8-K and the settlement agreement set out these terms:

Lower average rate: the combined average effective U.S. credit interchange rate falls by 10 basis points (0.10 percentage point) for five years.
Rate freeze: for five years, neither network can raise any posted U.S. credit interchange rate above its March 31, 2025, level.
Standard card cap: posted rates on standard (non-premium) consumer credit cards drop to no more than 1.25% and stay there for eight years.
Card categories: merchants can choose whether to accept U.S. credit cards in each of three categories: commercial, premium consumer and standard consumer.
Digital wallets: subject to conditions, merchants can accept some wallets and not others in stores, and enable some wallets and not others online.
Surcharging: merchants get more room to surcharge credit, including when they don't surcharge other credit networks.

Debit cards aren't covered, as the Associated Press noted. Debit pricing falls under Regulation II, which is in its own court fight over the Fed's debit fee cap.

Judge Brian Cogan now handles the case. On June 9, 2026, he granted preliminary approval, called the deal "fair, reasonable, and adequate" and indicated he was likely to approve it, PYMNTS reported. Class counsel moved for final approval on July 15, 2026. On September 10, 978 merchants and trade groups filed objections, according to a PayKings summary of the filings.

The convenience store trade group NACS said the court will hear oral argument on objections in November and expects any final approval to be appealed. In October, Visa and Mastercard told the court the objectors were recycling arguments it had already rejected, Payments Dive reported. The National Retail Federation and the Merchants Payments Coalition oppose the deal, per American Banker. For more on both sides, see our look at what's at stake as the swipe fee settlement heads to final approval.

Read the headline numbers with care. The widely quoted $38 billion isn't a fund anyone pays into. It's an estimate by two economists hired by the merchant plaintiffs, Joseph Stiglitz and Keith Leffler, of what merchants could save by 2031, according to Reuters' report on the revised deal. The Electronic Payments Coalition, which represents card networks and issuers and supports the deal, said the agreement could deliver more than $200 billion in relief over eight years, Restaurant Business reported. Both estimates come from parties with a stake in the outcome.

What Could Change at Checkout: Surcharging, Premium Cards and Honor All Cards

The change to the honor all cards rule is the biggest shift. Today, a merchant that takes Visa credit must take every Visa credit card, from a basic card to a high-end travel rewards card. Under the settlement, you could accept standard consumer cards and refuse premium or commercial cards. You could also accept all of them and surcharge the costlier ones. Datos Insights reads the deal as allowing surcharges of up to 3% on higher-cost cards.

How much that helps depends on what you sell:

Restaurants and bars see many premium and corporate cards on dinner checks and bar tabs. Refusing a business traveler's corporate card after the meal creates a problem with the guest. A premium-card surcharge posted before anyone orders is easier to defend than a refusal at the table.
Grocery markets run on thin margins and frequent repeat visits. Premium-card fees hurt, but so does turning away a regular, and a lane held up by a declined card slows everyone behind it.
Retail stores with higher tickets, such as furniture or jewelry, pay the premium-card difference on large sales. That makes surcharging or steering customers to cheaper cards more worth the effort.
E-commerce stores can list accepted card types and wallets before checkout. The wallet terms would let you enable some wallets online and not others, but a declined card at the payment step usually means an abandoned cart.

Two limits apply to everyone. First, surcharging is restricted by network rules and by state law, and states treat it differently. MannyPay offers credit card surcharging where permitted, but check your state's rules with your processor or an attorney before you add a fee. Second, refusing a card category means your terminal or gateway has to identify the category when the card is presented and handle it correctly. Before you post a sign, ask your processor how that would work on your equipment.

Realistic Savings From the Visa Mastercard Swipe Fee Settlement

The settlement lowers interchange, the fee the card-issuing bank collects on each sale. Whether you see that cut depends on how you're priced. On interchange-plus pricing, interchange is billed at cost, so a lower rate shows up on your statement automatically. On flat-rate or tiered pricing, the processor charges one blended price, and a lower interchange rate may never reach you unless the processor lowers that price. If you don't know which model you're on, our guide to what normal processing fees look like shows how to read a statement.

Worked Example: A Store Doing $50,000 a Month in Card Sales

All figures here are illustrative. The assumptions:

$50,000 a month in card sales, or $600,000 a year
60% of that volume is Visa and Mastercard credit: $360,000 a year
10% of that credit volume is standard consumer cards, now averaging 1.55% interchange (an assumed figure, not a published rate)
Interchange-plus pricing, so cuts pass through in full
Total processing costs today of 2.7% of sales: $16,200 a year

The 10-basis-point average cut: $360,000 × 0.10% = $360 a year.

The standard-card cap: $36,000 × (1.55% − 1.25%) = $108 a year.

Together that's up to $468 a year, about $39 a month, or roughly 2.9% of this store's processing bill. Treat $468 as the ceiling. The standard-card reduction likely counts toward the network-wide 10-point average rather than adding to it, and that average is measured across the whole network, not your own mix of cards. Cost programs such as dual pricing or a cash discount program work on a different scale, and they're available now.

Should You Decline Premium Cards? Run the Break-Even

Turning away premium cards saves you the fee difference only if the customer pays with another card. If the customer leaves, you lose the margin on the sale. In this illustrative case, premium cards cost 0.70 point more than standard cards, standard cards cost 1.25%, and your gross margin before card fees is 30%. Declining premium cards loses money once more than 0.70 ÷ (30 − 1.25), or about 2.4%, of premium-card customers walk away instead of switching.

In other words, declining pays only if fewer than about 1 in 40 premium-card customers leave. Thinner margins raise that break-even point and fatter margins lower it. For most merchants, a disclosed surcharge or a polite request to use another card is a safer test than an outright refusal.

Key Dates and How to Track the Case

Date	Event
March 2024	First injunctive relief class settlement announced
June 25, 2024	Judge Brodie denies preliminary approval
November 10, 2025	Superseding settlement signed
June 9, 2026	Judge Cogan grants preliminary approval
July 15, 2026	Class counsel moves for final approval
September 10, 2026	Merchants and trade groups file objections
November 2026	Final approval hearing

Approval wouldn't change anything at your counter right away. Under the agreement, the rule changes take effect within 90 days of approval. The rate changes start no earlier than four months after approval and line up with the networks' April and October rate releases. In June, analysts at Keefe, Bruyette & Woods predicted a final decision in late 2026 or early 2027, according to American Banker's coverage of the preliminary approval. The same report said appeals could push full implementation to 2029. Congress is a separate front: the Credit Card Competition Act would change credit card routing no matter how this case ends.

To follow the case, search docket number 1:05-md-01720 on PACER or CourtListener. The litigation note in Visa's quarterly and annual SEC filings also records each ruling.

You don't need to wait for the hearing. Pull your last statement and find two things: your pricing model and how much of your credit volume comes from premium and commercial cards. If you're on flat-rate or tiered pricing, ask your processor in writing whether it will pass through the settlement's interchange cuts. For a second opinion on what you pay now, request a free quote from MannyPay.

This article is general information, not legal advice. Check surcharging and card-acceptance policies with a qualified professional.

Sources

About the author

Adrian Reyes

Adrian Reyes is Senior Payments & Fintech Editor for Beyond the Swipe, covering credit card processing, merchant accounts, payment technology and processing fees.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.