US Judge Grants Approval to Visa and Mastercard’s Revised $38 Billion Swipe Fee Settlement in Landmark Antitrust Case

A US judge on Tuesday granted preliminary approval to Visa and Mastercard’s revised $38 billion settlement with merchants who had accused the card networks of charging excessive fees to process credit card payments.

US District Judge Brian Cogan in Brooklyn, New York, said the settlement was “fair, reasonable and adequate”, and indicated he was likely to grant final approval at a later stage.

The ruling came nearly two years after another judge rejected an earlier $30 billion version of the deal, describing it as insufficient.

The settlement, announced in November, is intended to bring an end to litigation that began in 2005, when merchants alleged that Visa, Mastercard and several banks conspired to breach US antitrust laws through the imposition of so-called “swipe fees”.

Under the revised agreement, Visa and Mastercard have committed to reducing swipe fees—also known as interchange fees — by 0.1 percentage point over five years. Standard consumer rates would also be capped at no more than 1.25 per cent for eight years.

Merchants will also be given greater flexibility to impose surcharges on customers and to decide whether to accept cards across different categories, including commercial cards, premium consumer cards (many of which include rewards programmes) and standard consumer cards.

The changes would effectively end the long-standing “Honour All Cards” rule, which required merchants to accept all Visa and Mastercard cards or none.

Visa shares rose 1.7 per cent on Tuesday, while Mastercard shares gained 2 per cent.

Judge Rejects Trade Groups’ Opposition

Several trade bodies, including the National Retail Federation, the Merchants Payments Coalition and the National Association of Convenience Stores, had objected to the revised settlement.

They argued that it would force merchants into an unfavourable choice between accepting high-cost rewards cards — which dominate the market — or losing sales by refusing them.

Objectors also said retailers would still be bound by an “honour all issuers” requirement within each network, preventing them from accepting cards from one bank while rejecting another.

Walmart was among those opposing the deal, arguing it would allow Visa and Mastercard to entrench anti-competitive practices that have persisted for more than 30 years.

Judge Cogan acknowledged that several objections had merit but said the settlement did not need to be perfect.

“The objectors identify several things that they want to do but can’t… and things that they theoretically can do but won’t,” he said. “But the question is not whether the amended settlement constitutes the best possible recovery… it is whether it constitutes a reasonable resolution in light of what may be gained or lost at trial.”

Neither the trade groups nor Walmart immediately commented on the ruling.

Visa described the settlement as an important step towards giving merchants greater flexibility in accepting payments, while Mastercard said it struck a balance between the interests of all parties.

Swipe fees totalled $118.8 billion in the United States in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, according to the Merchants Payments Coalition, with the average fee standing at 2.36 per cent.

Economists Say Settlement Could Benefit Consumers

Supporters of the agreement include the Electronic Payments Coalition, whose members include major issuers such as Bank of America, Capital One, Chase and Citibank.

Experts for the plaintiffs, including Nobel Prize-winning economist Joseph Stiglitz and University of Washington professor Keith Leffler, said the reforms could save merchants $38 billion by 2031 and generate $224 billion in total benefits, including gains for consumers.

The earlier $30 billion settlement would have reduced swipe fees by 0.07 percentage point over five years and also allowed more surcharging flexibility.

In rejecting that version in June 2024, US District Judge Margo Brodie said fees would still have remained above competitive levels absent antitrust violations, and that merchants would have remained constrained by the “Honour All Cards” rule.

 

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