Visa, Mastercard Propose Swipe Fee Settlement

Visa Inc. and Mastercard Inc. announced a proposed settlement on Monday with U.S. merchants that would reduce credit card interchange fees and relax longstanding rules on card acceptance, potentially ending more than two decades of antitrust litigation over swipe fees.

The agreement, detailed in regulatory filings, calls for a reduction in average effective interchange rates by 10 basis points, or 0.1 percentage point, for five years on most U.S. credit card purchases. Standard consumer credit card rates would be capped at 1.25 percent for eight years, a decrease of more than 25 percent from current levels. Merchants would also gain flexibility to impose surcharges of up to 3 percent on card transactions. These changes aim to address complaints that interchange fees, which averaged 2.26 percent in 2023 and totaled 111.2 billion dollars in 2024, inflate operating costs for retailers and contribute to higher prices for consumers.

A key provision modifies the networks' "honor all cards" rules, which previously required merchants accepting any Visa or Mastercard to accept all cards from that network. Under the settlement, merchants could opt out of specific categories, such as...