After nearly 20 years of litigation, Visa and Mastercard have reached a settlement with US merchants lowering and capping credit card interchange rates in a deal that could save the merchants $30 billion over five years.
The settlement, one of the largest in US antitrust history, will reduce credit interchange fees and then cap those rates into 2030. Visa says that more than 90% of those firms benefitting will be small businesses.
Under the deal, merchants will also be free to charge different prices to shoppers based on which credit cards they pay with.
The card firms have been battling merchants over swipe fees since 2005. In 2012, Visa and Mastercard agreeing to pay up $7.25 billion to retailers over claims they had improperly fixed credit and debit fees.
While the parties resolved the damages component of the suit, an injunctive relief aspect has rumbled on.
Robert Eisler, co-lead counsel acting for merchants, says: "This settlement achieves our goal of eliminating anti-competitive restraints and providing immediate and meaningful savings to all US merchants, small and large."
Kim Lawrence, president, North America, Visa, adds: “By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified.”
The deal is still subject to court approval.