A US district court judge has dismissed a proposed $30 billion settlement regarding swipe fees between Visa, Mastercard, and US merchants, citing that both card schemes have the financial capacity to offer “substantially” more.
After nearly two decades of legal battles, Visa and Mastercard reached a settlement in March that aimed to reduce and cap credit card interchange rates, potentially saving merchants $30 billion over five years. This settlement was one of the largest in US antitrust history, intending to lower interchange fees and set a cap on those rates through 2030. Additionally, it would have allowed merchants to charge different prices based on the credit card used.
However, US District Judge Margo Brodie has now rejected this deal. In court filings revealed by Bloomberg News, Brodie noted that while the settlement proposed $30 billion, the estimated annual savings of $6 billion for merchants was minimal compared to the $100 billion that merchants paid in interchange fees in 2023. She stated that both companies could withstand a significantly larger judgment. Brodie also indicated that the proposed agreement favored larger retailers over smaller, local merchants.
Both Visa and Mastercard have expressed disappointment over the ruling, with Visa asserting that a direct resolution with merchants is the preferred path forward. In April, the National Retail Federation (NRF) urged the court to oppose the settlement, making a trial likely in the near future.