Visa, Mastercard settle merchant claims

reached a major class‑action settlement with U.S. merchants over credit card interchange/processing fees, creating a multibillion‑dollar fund and imposing temporary caps and reductions on certain interchange rates.

Core settlement points

• A long‑running antitrust case alleged that Visa, Mastercard, and large banks conspired to set excessive interchange fees on credit and debit card transactions accepted by merchants.

• The settlement fund for interchange overcharge claims is about 5.54 billion dollars (net of certain reductions), covering merchants that accepted Visa or Mastercard from January 1, 2004 through January 25, 2019.

• Separately, Visa and Mastercard also agreed in a later settlement proposal to structural changes: segmenting credit cards into commercial, premium consumer, and standard consumer, and capping standard consumer credit interchange at 1.25% for a period, with a roughly 10 bp reduction in average effective credit interchange for five years.

• The court previously rejected an earlier version of the structural settlement in June 2024; a revised settlement was submitted to the Eastern District of New York and is pending/subject to court approval.

Merchants covered and timing

• Coverage for the monetary settlement includes essentially any U.S. merchant that accepted Visa or Mastercard during the 2004–2019 period and did not opt out of the settlement class.

• Claim forms began going out in late 2023; the filing deadline for merchants to submit claims in the monetary settlement was February 4, 2025.

• The settlement administrator is now reviewing timely submissions and reconciling merchant transaction data with defendants to calculate awards.

How payouts are calculated

• Each merchant’s payment is based on interchange fees actually or reasonably estimated to have been paid on Visa and Mastercard transactions during the covered period, then pro‑rated against all valid claims.

• Interchange is typically around 1–2% of the transaction amount, so merchants with higher volume or higher‑ticket card sales during 2004–2019 generally have larger eligible claims.

Structural changes for interchange going forward

• The structural settlement proposal would: allow more flexible surcharging (including when merchants do not surcharge other networks), give merchants the ability to accept or decline categories of credit cards (commercial vs premium vs standard), reduce average effective U.S. credit interchange by 10 bps for five years, and cap posted U.S. credit interchange rates for five years, with standard consumer credit capped at 1.25% during the term.

• Industry groups characterize this as an attempt to resolve interchange issues via private settlement rather than through further legislative/regulatory mandates such as the Durbin‑Marshall credit card routing bill.

Related but distinct merchant cases

• In addition to the large interchange case, Visa and Mastercard agreed to pay 199.5 million dollars in a separate class‑action resolving merchant claims about chargeback rule changes around chip‑card transactions (EMV liability shift), with Visa paying about 119.7 million dollars and Mastercard 79.8 million dollars.

• Discover and American Express earlier agreed to pay a combined 32.2 million dollars in that chargeback‑focused litigation.