Visa and Mastercard Fee Settlement: Reduced Interchange Fees and Increased Merchant Control

Photo of author
Written By Vikas Jangid

Lorem ipsum dolor sit amet consectetur pulvinar ligula augue . 

Visa, Mastercard Fee Settlement Faces Hurdle as Judge Expresses Disapproval

A federal judge has thrown a wrench into the proposed settlement of a long-standing lawsuit against Visa, Mastercard, and major U.S. credit card issuers.

The lawsuit centers on the fees merchants are charged for accepting credit cards, and the judge has indicated that the current settlement terms may not be sufficient.

Source: Twitter/WSJ

Judge Likely to Reject Proposed Visa, Mastercard Fee Settlement

According to a court filing on Thursday from a federal court in Brooklyn, Judge Margo K. Brodie informed the parties involved that she is "likely not approve the Settlement."

The judge cited concerns that the proposed changes in the settlement don't go far enough.

Both Visa and Mastercard expressed disappointment with the judge's stance, maintaining that the agreement was a fair resolution to the nearly two-decade-long legal battle.

Merchants Oppose Visa, Mastercard Fee Settlement Terms

The settlement, reached in March 2024, aimed to bring an end to the lawsuit between the card networks, banks, and merchants. However, the agreement faced criticism from attorneys and trade groups representing major merchants, who argued that the terms were inadequate.

"The proposed Visa, Mastercard fee settlement fails to address the core issue of how these companies collectively set swipe fees," stated Christopher Jones, an executive committee member of the Merchants Payments Coalition.

Judge Sides with Merchants in Visa, Mastercard Fee Settlement Dispute

If Judge Brodie ultimately rejects the settlement, Visa and Mastercard may be forced to negotiate a more favorable agreement for the merchants or prepare for a trial. During Thursday's court session, Judge Brodie appeared to side with the arguments presented by the large merchants' lawyers.

This suggests that a trial may be back on the table, as Judge Brodie had previously authorized preparations for trial before the settlement was proposed.

The Heart of the Visa, Mastercard Fee Settlement Dispute: Interchange Fees

The central issue in the lawsuit is the interchange fees that Visa and Mastercard set. These fees are collected by credit card issuers, such as banks and financial institutions, whenever a consumer uses their card to make a purchase.

Merchants are responsible for paying these fees with every transaction. In 2023 alone, issuers of Visa and Mastercard credit cards collected a staggering $72 billion in interchange fees, according to the Nilson Report, a trade publication.

It remains to be seen how this latest development will impact the future of the Visa, Mastercard fee settlement and the ongoing legal battle between the card networks, banks, and merchants.

Read more such news on techinsighttoday
Thank you so much for reading.

Leave a Comment