US Judge Reviews Landmark $38 Billion Visa-Mastercard Settlement Amid Merchant Pushback
A federal judge in Brooklyn has begun reviewing a revised $38 billion settlement between payment giants Visa and Mastercard and a massive class of US merchants. The hearing marks a critical turning point in a 21-year legal battle over "swipe fees" (interchange fees). The proposed deal aims to slash these fees by 0.1 percentage points for five years and cap them at 1.25% for eight years. Crucially, the agreement would allow merchants to reject high-cost "premium" and reward cards, breaking the long-standing "honor all cards" rule that forced retailers to accept every card under a network’s brand regardless of the processing cost.
During the session, the presiding judge emphasized that while he does not intend to dismantle the existing global payment infrastructure, he is meticulously scrutinizing whether the deal provides a "fair balance" for small and large retailers alike. Opponents, including major retail associations, argue the relief is insufficient, noting that US swipe fees have ballooned to over $118 billion annually. A ruling on preliminary approval is expected in the coming weeks, a decision that could fundamentally reset the operational rules for electronic payments worldwide.