Visa and Mastercard Settle 20-Year Swipe Fee Battle with U.S. Merchants

After nearly two decades of legal disputes, Visa and Mastercard have reached a revised settlement agreement with U.S. merchants on November 10, 2025, to resolve antitrust litigation over credit card interchange fees and acceptance rules. The proposed deal, which still requires court approval, aims to address long-standing merchant grievances and could reshape the economics of card payments in the United States.

Key terms of the settlement include a reduction of the average U.S. credit card interchange rate by 0.1 percentage points (10 basis points) for five years, a cap on standard consumer credit card rates at 1.25% for up to eight years, and relaxation of the 'Honor All Cards' rule, allowing merchants to refuse high-fee cards while accepting others from the same network. Additionally, merchants gain expanded surcharging options for credit card payments and access to a new merchant education program funded by Visa and Mastercard to help manage payment costs.

The case originated in 2005, with merchants accusing the card networks of anti-competitive practices that inflated transaction costs. A previous settlement was rejected by a U.S. judge in 2024 for insufficient fee relief, but this revised version offers deeper concessions. Visa described the outcome as the 'best resolution for all parties,' though some merchant advocacy groups, like the Merchants Payments Coalition, criticize the fee reductions as 'minuscule' and temporary.

This settlement occurs amid a broader shift in the payments industry, where digital wallets, instant payments, and blockchain-based settlements are challenging traditional card networks. By easing regulatory pressure and merchant discontent, Visa and Mastercard aim to reinforce their positions in an evolving ecosystem.