Reuters: Visa and Mastercard Near Settlement with Merchants to Cut Fees and Expand Their Flexibility
U.S. payment giants Visa and Mastercard are reportedly close to reaching a settlement with U.S. merchants that would reduce the fees stores pay for card transactions and grant them greater control over which credit cards to accept, according to The Wall Street Journal, citing people familiar with the matter.
Under the proposed deal, Visa and Mastercard would lower interchange fees—typically between 2% and 2.5% per transaction—by an average of about one-tenth of a percentage point over several years. The companies would also loosen existing rules that currently require merchants who accept one type of card from a network to accept all card types from that same network.
The settlement is expected to divide credit card acceptance into categories, such as rewards cards, non-rewards cards, and commercial cards, reflecting ongoing talks between the parties.
This agreement aims to resolve a long-running legal dispute dating back to 2005, in which merchants accused Visa and Mastercard of imposing excessive swipe fees (also known as interchange fees) and enforcing “anti-steering” rules that prevented merchants from encouraging customers to use cheaper payment methods.
Last year, both companies agreed to a settlement estimated at $30 billion to cap merchant card fees, which included a minimum 0.04 percentage point reduction in swipe rates for three years, and a commitment to keep average rates seven basis points below current levels for five years.
Although Visa and Mastercard denied any wrongdoing in agreeing to that settlement, the new deal reportedly includes provisions related to surcharging, giving merchants more flexibility to manage payment costs.
The formal announcement of the settlement is expected soon, marking a significant shift in the U.S. credit card fee landscape and potentially setting a precedent for greater transparency and competition in the global payments industry.
