Visa and Mastercard Settle $30 Billion Credit Card Fee Dispute

Visa and Mastercard Settle $30 Billion Credit Card Fee Dispute

Visa and Mastercard have settled an estimated $30 billion lawsuit, aiming to curb credit and debit card fees for merchants, potentially leading to lower consumer prices.

The antitrust settlement, considered one of the largest in U.S. history, could resolve most claims in nationwide litigation dating back to 2005. While the agreement includes fee reductions and caps for several years, critics argue it might not sufficiently address merchants’ concerns, particularly regarding the longevity of fee reductions.

The settlement, subject to court approval, mandates changes in swipe fees, including reductions by at least four basis points for three years and ensuring an average rate seven basis points below the current average for five years.

Moreover, anti-steering provisions will be removed, granting merchants more flexibility in offering discounts or imposing surcharges on high-fee cards. Despite Visa and Mastercard denying wrongdoing, some merchants may oppose the settlement, expressing concerns over binding agreements and the persistence of high swipe fees.

Approval of the settlement is pending from U.S. District Judge Margo Brodie, with potential appeals, while legislative efforts such as the Credit Card Competition Act aim to address ongoing concerns in the industry.

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