US judge reviews Visa, Mastercard $38 billion swipe fee settlement

MasterCard

27/04/2026 18:53

By Jonathan Stempel

NEW YORK, April 27 (Reuters) - A U.S. judge on Monday heard arguments for and against Visa's V.N and Mastercard's MA.N revised $38 billion settlement with merchants who accused the card networks of charging too much to process payments on their credit cards.

U.S. District Judge Brian Cogan in Brooklyn, New York, didn't say whether he would grant preliminary approval, but said, during a nearly three-hour hearing, he wasn't looking to use a "meat cleaver" to dismantle the credit card process for card networks, banks, merchants and consumers.

A different judge rejected a $30 billion settlement in June 2024. Cogan said he will try to rule quickly.

The settlement announced last November 10 is intended to end litigation that began in 2005, when merchants accused Visa, Mastercard and banks of conspiring to violate U.S. antitrust laws.

Visa and Mastercard agreed to lower so-called swipe fees, or interchange fees, by 0.1 percentage point for five years, and cut standard consumer rates to no more than 1.25% for eight years.

Merchants under the settlement would also get the right to decline higher-cost cards, a departure from the "Honor All Cards" rule requiring them to accept all Visa and Mastercard cards or none, and would get more options to impose surcharges.

Opponents said the settlement would leave merchants with an unwelcome choice of paying too much to accept the popular rewards cards that dominate the card market, or lose revenue by not accepting those cards.

The National Retail Federation, the Merchants Payments Coalition, the National Association of Convenience Stores, and Walmart WMT.O are among the opponents.

Swipe fees, also known as interchange fees, totaled $118.8 billion for Visa and Mastercard in the United States in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, the Merchants Payments Coalition said. The average fee was 2.36%.

LAWYERS DISPUTE FLEXIBILITY AFFORDED TO MERCHANTS

A central feature of the new settlement lets merchants reject whole categories of cards, which include commercial cards, premium consumer cards — including many rewards cards —  and standard consumer cards.

But opponents called that change illusory because merchants would still have to "honor all issuers" in a given network — meaning they could not accept cards from one bank and reject cards from another.

"They know this is a deeply unpopular settlement, and they're hoping this court will bind those merchants," said Debra Greenberger, a lawyer for the National Retail Federation.

Steve Shadowen, a lawyer for merchants supporting the settlement, disagreed. "The settlement delivers nearly every significant bit of relief that the class sought," he said.

Cogan expressed concern about changing too much.

He told a lawyer for Walmart that if merchants prevailed at trial and he had to decide remedies, "it seems to me I'd start looking at it from the perspective of carving away parts of the honor all cards rule, not junking the whole rule ... or going after it with a meat cleaver."

The $30 billion settlement would have lowered swipe fees by 0.07 percentage point over five years and also allowed more surcharges.

In rejecting that accord in June 2024, U.S. District Judge Margo Brodie said fees would still have been above where they were absent any antitrust violations, and improperly stuck merchants with the "Honor All Cards" rule.

Supporters of the latest settlement included the Electronic Payments Coalition, whose members include the card networks and large issuers such as Bank of America BAC.N, Capital One COF.N, Chase JPM.N and Citibank C.N.

(Reporting by Jonathan Stempel in New York)