A US judge has rejected a $30 billion settlement between Visa, Mastercard, and retailers concerning credit card interchange fees.
US District Judge Margo Brodie had previously indicated doubts about approving the settlement and has now formally denied the plaintiffs’ motion for preliminary approval, stating that “the court finds that it is not likely to grant final approval to the settlement.”
This ruling prolongs a two-decade legal battle between the credit card giants and merchants. In March, Visa and Mastercard had reached a settlement with several mainly small US merchants, aimed at lowering and capping credit card interchange rates. This agreement was expected to save merchants $30 billion over five years and intended to reduce interchange fees while capping them until 2030. It would also allow merchants to charge different prices based on the credit cards used by customers.
However, the settlement faced opposition from various trade groups, who argued that the fees would remain excessively high and that Visa and Mastercard would retain too much control over card transaction processes. Christopher Jones, a member of the Merchant Payments Coalition executive committee, expressed relief, stating, “Thankfully, the judge made the right call in recognising what a bad deal this would have been for Main Street merchants and their customers.”
In response to the ruling, Mastercard expressed disappointment, asserting that the settlement would have provided a fair resolution. The company indicated its intention to explore options for a proper resolution of the dispute.
Judge Brodie will provide a written opinion explaining her rationale after allowing the involved parties to propose any redactions. Following this, the parties have the option to negotiate a new settlement or move towards a trial.