UPDATE: NRF, RILA Label Visa-Mastercard Settlement Just a ‘Drop in the Bucket’

Visa and Mastercard have settled a lawsuit against the swipe fees they charge merchants.
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[Update as of 3/29/2024] Both the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) have criticized the proposed Visa-Mastercard swipe fee settlement as insufficient and vowed to keep lobbying for legislative reforms. “This settlement is a mere drop in the bucket,” said a statement from RILA. “It proves that merchants deserve injunctive relief, but whether the settlement terms proposed are sufficient to remedy the harm caused by the current interchange system needs to be carefully reviewed. Leading retailers intend to study the terms of the settlement closely and reserve the right to object to the settlement deal if it comes up short on what merchants deserve.”

“We are still reviewing the proposed settlement, but we have some very real concerns,” said Stephanie Martz, Chief Administrative Officer and General Counsel to the NRF in a statement. “The reduction of just a few basis points is within the range that swipe fees have fluctuated over the years and amounts to pennies on the dollar. The fact remains that these fees are an unfair business practice that harms merchants and consumers and benefits banks. This settlement in no way influences our commitment to move forward with passing the Credit Card Competition Act.”

Original story begins:

After nearly 20 years of litigation, Visa and Mastercard have reached a settlement with U.S. merchants worth an estimated $30 billion that will lower the interchange fees (commonly referred to as swipe fees) that merchants are charged when customers use credit or debit cards.


The antitrust settlement is one of the largest in U.S. history, according to Reuters, and if it receives court approval it would resolve most of the ongoing claims against Visa and Mastercard, which began in 2005.

Swipe fees typically include small, fixed fees plus a percentage of the total sale amounts and average about 1.5% to 3.5% per transaction, according to Merchants have been fighting an inflation of these fees as well as “anti-steering” rules that forbid them from directing customers to cheaper forms of payment.

“By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified,” said Kim Lawrence, President, North America at Visa in a statement. “Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”

The settlement allows Visa and Mastercard to deny any wrongdoing while offering several multi-year benefits to merchants, including:

  • Lower interchange fees: Swipe rates will be reduced by at least 0.04% percentage points for three years and ensure an average rate that is seven basis points below the current average for five years;
  • A cap on interchange rates: Both Visa and Mastercard agree to cap interchange rates for five years;
  • Update anti-steering provisions: Merchants will now have more flexibility at the point-of-sale, including the opportunity to steer shoppers to preferred payment methods; and
  • Simplified surcharging and discounting rules: Both companies agreed to activate a simplified approach to credit card transaction surcharging. Additionally, the settlement provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.

The settlement is subject to final approval by the Eastern District Court of New York. The changes will not go into effect until that approval is received, which Mastercard estimates will likely be in late 2024 or early 2025.

“This agreement brings closure to a long-standing dispute by delivering substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs,” said Rob Beard, Chief Legal Officer, General Counsel and Head of Global Policy at Mastercard in a statement. “As the court reviews the settlement, we will focus our energy on continuing to provide consumers, small businesses and all business owners what they expect from Mastercard — a better payments experience, strong value and peace of mind.”

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