The long-standing lawsuit against Visa and Mastercard has finally resulted in a settlement that aims to lower merchant fees. This case, which involves not only the credit card networks but also the banks that issue cards with them, will see US merchants paying $30 billion less in swipe fees over a five-year period. The settlement is expected to reduce these fees by at least 0.04 percentage points for a minimum of three years.
The usual cost of swipe fees for merchants is around 2% of the total transaction, but this can go up to 4% for premium rewards cards. However, under the new agreement, these fees will be reduced by at least 0.04 percentage points for a minimum of three years. It’s important to note that the rewards received by cardholders will not be impacted by this settlement, and Americans’ access to credit will not be restricted either.
Mastercard spokesman Seth Eisen confirmed that this settlement would have no effect on rewards or credit access for cardholders. Meanwhile, Discover and Capital One recently announced their merger, which upon approval by regulators and shareholders will create the largest credit card company in the country. Following the announcement of the settlement, shares of Visa and Mastercard slightly increased.
This story is still unfolding and will be updated as more information becomes available.
