Mar 26, 2024 - Economy

Visa, Mastercard agree to cap credit card processing fees

Credit card signs on a merchant door

A sticker for Mastercard, Visa and Discover credit cards displayed on a door in New York on Oct. 17. Photo: Angus Mordant/Bloomberg via Getty Images

Visa and Mastercard have agreed to cut and cap credit card processing fees as a part of a major settlement with merchants after decades of litigation.

Why it matters: U.S. businesses are expected to save at least $29.8 billion in the five-year deal, according to attorneys who represented the plaintiffs in the class-action settlement.

  • Merchants will have more flexibility to adjust how much they charge consumers for goods sold via credit card.

What they're saying: "The settlement will reduce credit interchange rates for U.S. merchants, comprised largely of small businesses," Visa said in a statement.

  • "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," Mastercard chief legal officer Rob Beard said in a separate statement.

The big picture: Merchants currently pay an average of 1.5% to 3% per credit card transaction, according to

  • U.S. merchants handed over $100.8 billion in credit card fees in 2023, up $7.5 billion from 2022, according to the Merchant Payments Coalition.
  • Those fee rates will fall by at least 4/100ths of a percentage point for the next several years, plaintiffs' attorneys reported.

Zoom in: Merchants will be able to adjust prices of goods sold via credit card in 96% of transactions, up from less than 20% before the deal, according to plaintiffs' attorneys.

  • "This settlement achieves our goal of eliminating anti-competitive restraints and providing immediate and meaningful savings to all U.S. merchants, small and large," said Robert Eisler, co-lead counsel for the plaintiffs, in a statement.

The bottom line: After years of complaining about credit card fees, merchants are poised for some relief.

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