Visa and Mastercard agree to $30 billion settlement that will lower merchant fees
Last edited Tue Mar 26, 2024, 03:43 PM - Edit history (1)
Source: CNN Business
Updated 1:49 PM EDT, Tue March 26, 2024
New York CNN -- Two of the world's largest credit card networks, Visa and Mastercard, as well as the banks that issue cards with them, have agreed to settle a decadeslong antitrust case brought upon by merchants. The settlement is set to lower swipe fees merchants pay when customers make purchases using their Visa or Mastercard by $30 billion over five years, according to a press release announcing the settlement Tuesday morning.
The settlement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, nothing is considered finalized until it receives approval from the US District Court for the Eastern District of New York. Even then, the case can also be appealed in what could be a lengthy battle.
Typically, swipe fees cost merchants 2% of the total transaction a customer makes -- but can be as much as 4% for some premium rewards cards, according to the National Retail Federation. The settlement would lower those fees by at least 0.04 percentage point for a minimum of three years.
Additionally, the settlement would require Visa and Mastercard to maintain the swipe fee rates that existed as of December 31, 2023 for five years. NRF, a trade group representing retailers, told CNN it has "some very real concerns" with the settlement.
Read more: https://www.cnn.com/2024/03/26/economy/visa-mastercard-swipe-fee-settlement/index.html
Link to Mastercard PRESS RELEASE - Mastercard Commits to Lowering U.S. Interchange for Small Businesses and Broader Merchant Community
Link to Visa PRESS RELEASE - Visa Agrees to Landmark Settlement with U.S. Merchants Reducing Rates and Guaranteeing No Increases for at Least Five Years
Article updated.
Previous article -
New York CNN -- Two of the world's largest credit card networks, Visa and Mastercard, as well as the banks that issue cards with them, agreed to settle a decadeslong antitrust case brought upon by merchants. The settlement is set to lower swipe fees merchants pay when customers make purchases using their Visa or Mastercard by $30 billion over five years, according to a press release announcing the settlement Tuesday morning.
The settlement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, nothing is considered finalized until it receives approval from the US District Court for the Eastern District of New York. Even then, the case can also be appealed in what could be a lengthy battle.
Typically swipe fees cost merchants 2% of the total transaction a customer makes but can be as much as 4% for some premium rewards cards, according to the National Retail Federation. The settlement would lower those fees by at least 0.04 percentage point for a minimum of three years.
The rewards Visa cardholders currently receive won't be impacted, Kim Lawrence, Visa's North America President, said in a statement Tuesday morning. Additionally, Americans' access to credit won't be more restricted as a result of the settlement, she said. Seth Eisen, a spokesman for Mastercard, told CNN that rewards and credit access also would not be impacted by the settlement.
Original article -
New York CNN -- Two of the world's largest credit card networks, Visa and Mastercard, as well as the banks that issue cards with them, agreed to settle a decadeslong antitrust case brought upon by merchants.
The settlement is set to lower swipe fees merchants pay when customers make purchases using their Visa or Mastercard by $30 billion over five years, according to a press release announcing the settlement Tuesday morning.
The settlement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, nothing is considered finalized until it receives approval from the US District Court for the Eastern District of New York. Even then, the case can also be appealed in what could be a lengthy battle.
Visa and Mastercard did not directly respond to CNN's request for comment. The rewards Visa cardholders currently receive won't be impacted, Kim Lawrence, Visa's North America President, said in a statement Tuesday morning. Additionally, Americans' access to credit won't be more restricted as a result of the settlement, she said.
This is a developing story and will be updated.
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