The Visa Mastercard interchange settlement goes before a federal judge in Brooklyn for final approval on 16 November 2026. Judge Brian Cogan will decide whether a deal covering more than 12 million US merchants should end litigation that began in 2005. The proposal would cut credit card swipe fees, cap rates on standard consumer cards and, for the first time, let merchants decline whole categories of Visa and Mastercard cards.
Cogan granted preliminary approval on 9 June 2026, calling the revised deal “fair, reasonable, and adequate” and saying he was likely to approve it eventually, according to Reuters. Walmart, the National Retail Federation and other merchant groups still oppose it. The hearing is their last chance to stop it at district court level.
What the Visa Mastercard interchange settlement would change
Interchange, or the swipe fee, is the charge a card issuer receives on each card transaction. The merchant pays it through its acquirer, and the card network sets the rates. Under the revised deal, Visa and Mastercard would lower credit interchange by 10 basis points (0.1 percentage point) for five years. Rates on standard consumer cards would be held at no more than 1.25% for eight years.
The bigger structural change is to the acceptance rules. Merchants could choose whether to accept cards in three separate categories: commercial cards, premium consumer cards (including the rewards cards that dominate the market) and standard consumer cards. Merchants would also get more freedom to add surcharges and to offer discounts that steer customers towards cheaper ways to pay.
| Term | What the revised settlement provides | Duration or limit |
|---|---|---|
| Credit interchange | Reduced by 10 basis points | Five years |
| Standard consumer card rates | Capped at 1.25% | Eight years |
| Card acceptance | Merchants may accept or decline commercial, premium and standard consumer cards as separate categories | Network level only; issuer-level choice is not allowed |
| Surcharging and discounts | More options to surcharge costlier cards and to discount cheaper ones | Subject to the settlement terms |
| Claimed value | $38 billion in merchant savings by 2031, according to plaintiffs’ experts | Estimate, not a cash payment |
Why the 2024 deal failed and this one advanced
The current proposal replaces an earlier one. In June 2024, US District Judge Margo Brodie rejected a $30 billion settlement that would have cut swipe fees by 0.07 percentage point over five years. She found that fees would still have been above the level they would have reached without the alleged antitrust violations, and that merchants would have stayed bound by the “honor all cards” rule.
The revised version, announced in November 2025, goes further on both points. In June, Cogan accepted that many objections had merit but said a settlement did not need to be perfect. In his words, “the question is not whether the amended settlement constitutes the best possible recovery, end stop – it’s whether the amended settlement constitutes the best possible recovery in light of what can be gained and lost through trial.”
Two experts hired by the plaintiffs, Nobel laureate Joseph Stiglitz and University of Washington professor Keith Leffler, estimated that the changes could save merchants $38 billion by 2031 and deliver $224 billion of benefits in total, including to consumers. Those figures are advocacy estimates prepared for the class, not independent findings.
The scale of the fees at stake
The Merchants Payments Coalition, cited by Reuters, puts Visa and Mastercard swipe fees in the United States at $118.8 billion in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, with an average fee of 2.36%. Against that base, a 10 basis point cut matters in aggregate but is small for each transaction. On a $100 credit purchase, it lowers the swipe fee by ten cents.
For acquirers, payment facilitators and merchant-facing fintechs, the more lasting work is operational. Pricing engines, surcharge logic and point-of-sale acceptance settings would all need to tell standard, premium and commercial cards apart, and do so reliably at checkout. Fintechly’s guide to B2B payment methods across cards, ACH, wires and real-time rails sets out how card costs compare with the alternatives merchants may steer towards.
The objectors’ case: issuer-level choice is still off the table
The objectors’ main complaint is that merchants still cannot pick between banks. Under the deal they must “honor all issuers” within a network, so they cannot accept one bank’s Visa cards while refusing another’s, and they cannot surcharge at issuer level. The National Retail Federation and the National Association of Convenience Stores said the deal fails to fix a “broken” credit card market, and they argue that rewards cards remain too expensive to accept.
In a joint filing in mid-October, reported by Payments Dive, Visa and Mastercard called the objectors “no more than a vocal minority” of a class of more than 12 million. They said the objections “merely reprise the same arguments this Court already considered and rejected.” The networks also asked the court to reject Walmart’s argument that keeping it in the class without a right to opt out amounts to an unjust taking of its legal claim.
Fees are also in dispute. Eighteen merchants that settled a related damages case, including Crate & Barrel Holdings, Dick’s Sporting Goods, The Gap and Yum! Brands, have asked for $36 million in “objector fees” for helping to improve the terms. Class counsel opposes the request, which would cut its own proposed fee award to $170 million.
Ending “honor all cards” may change less than it appears
The end of the “honor all cards” rule is the most visible concession, but it may matter less in practice. Stephen Squeri, chief executive of American Express, which is not a party to the case, answered “Good luck” when asked about it on Amex’s third-quarter call and warned of “consumer outrage” if merchants started refusing certain cards, Payments Dive reported. Dan Stiel, a former card industry executive who now advises merchants, called it an “empty benefit,” arguing that customers using premium cards tend to spend more.
Cogan anticipated this in June, observing that objectors want some things they cannot do, such as rejecting cards by issuer, and other things “that they theoretically can do but won’t,” such as rejecting premium cards. The likelier near-term use of the new rights is selective surcharging and discounting rather than outright refusal, particularly in low-margin sectors. The same tension between network rules and merchant economics runs through Fintechly’s analysis of who pays when an AI agent makes the wrong card purchase.
Visa Mastercard interchange settlement FAQs
When will the court decide whether to approve the settlement?
Judge Brian Cogan has scheduled the final approval hearing for 16 November 2026 in federal court in Brooklyn. He granted preliminary approval on 9 June 2026 and said then that he was likely to grant final approval eventually. The changes would apply only once a final approval order is entered.
Can a merchant refuse one bank’s Visa or Mastercard cards but accept another’s?
No. The settlement lets merchants accept or decline cards by category (commercial, premium consumer and standard consumer) but keeps the requirement to honour all issuers within a network. Merchants cannot reject or surcharge cards from a particular issuing bank, which is one of the objectors’ main complaints.
Does the 1.25% rate cap cover rewards credit cards?
The 1.25% cap applies to standard consumer cards for eight years. Premium consumer cards, including most rewards products, and commercial cards are separate categories, and merchants may choose to decline them. Separately, credit interchange would fall by 10 basis points for five years.
How much would merchants save under the settlement?
Plaintiffs’ experts Joseph Stiglitz and Keith Leffler estimated savings of $38 billion by 2031 and $224 billion of total benefits, including to consumers. These are estimates prepared for the merchant class and are disputed by objectors such as Walmart and the National Retail Federation. Actual savings for any one merchant depend on its card mix and how its acquirer passes through rate changes.
What should acquirers and payment facilitators prepare for if the deal is approved?
They will need systems that identify standard, premium and commercial cards at the point of sale so merchants can apply category-level acceptance, surcharges or discounts. Pricing schedules and merchant statements will also need updating to reflect the 10 basis point cut and the 1.25% cap on standard consumer cards.
For card issuers, final approval would put a five-year ceiling on credit interchange income and an eight-year cap on standard cards, which could push rewards economics further towards premium products that merchants may now decline. For acquirers and merchant-facing fintechs, the immediate task is product work: card-category detection, surcharge controls and clear disclosures. For merchants, the deal offers more tools rather than lower costs by default, and 16 November will show whether Judge Cogan agrees that is enough. Readers comparing card costs with account-to-account options can start with Fintechly’s guide to moving money between accounts by ACH, wire, card and RTP.
