Lawsuit: Mastercard And Visa Reach A Settlement With Merchants

March 27, 2024

Visa and Mastercard recently reached a class action settlement with merchants based in the US, in a deal that will lower credit interchange rates and cap them for five years, as well as giving merchants a wider range of ways to accept digital payments.

(…) including allowing them to steer their customers to the merchants’ preferred payment methods and placing a surcharge on purchases made with credit cards

The rules should go into effect in late 2024 to early 2025, once approved by the court.

By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small merchants have identified (…) Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.

As the court reviews the settlement, we will focus our energy on continuing to provide consumers, small businesses and all business owners what they expect from Mastercard — a better payment experience, strong value and peace of mind.

For years, Visa and Mastercard have seen lawsuits against them by merchants who claim overcharging on interchange fees, as well as blocking them from providing their customers with other payment options that require no extra fees, making it impossible to avoid them.

To put this in perspective, the caps on swipe fees and rollbacks will spell at least $29.79 billion in savings for merchants – in only five years following the approval by the court. This settlement will also provide merchants with leverage when negotiating with Mastercard and Visa, meaning more savings for businesses.

This settlement has been 8 years in the making; according to Steve Shadowen of Hilliard Shadowen LLP, co-lead counsel, it’s been eight years of “hard-fought litigation and detailed, painstaking negotiations”

 

Want to learn more? Check out PYMNT’s full write-up here.

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