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Industry Statements on on Merchant, Payment Network Lawsuit Agreement

| Electronic Payments Coalition


WASHINGTON – Electronic Payments Coalition (EPC) Executive Chairman Richard Hunt issued the following statement regarding the impact the interchange lawsuit agreement between U.S. merchants, Visa, Mastercard and other financial institutions has on the Durbin-Marshall credit card legislation: The agreement between merchants, Visa, Mastercard and financial institutions has been decades in the making and treats businesses of all sizes equally without government mandates or jeopardizing consumers’ data security and rewards programs. Merchants will also receive a host of other technical benefits that could have never been reached with legislation drafted by individuals who simply do not understand the intricacies of our global payment networks. The Durbin-Marshall bill has had no debate, no legitimate hearing and continues to be unnecessary. Ultimately, the agreement helps small businesses more than a haphazard, experimental piece of legislation that only benefits the largest corporate mega-stores ever would. Congress should put an end to the ill-advised Durbin-Marshall mandates and let the agreement merchants reached stand on its own.”


SAN FRANCISCO–(BUSINESS WIRE)–Mar. 26, 2024– After nearly 20 years of litigation, Visa (NYSE: V) today announced it has agreed to a landmark settlement with U.S. merchants, more than 90 percent of which are small businesses, lowering credit interchange rates and capping those rates into 2030. The settlement also provides updates to several key network rules giving merchants more choice in how they accept digital payments.

The agreement’s multi-year benefits for businesses include:

  • Lower interchange rates. The settlement will reduce credit interchange rates for U.S. merchants, comprised largely of small businesses.
  • Interchange rates will not go up. The agreement will cap the reduced credit interchange rates for five years, providing an unprecedented level of cost certainty long sought by merchants.
  • New ways to manage costs. The settlement gives merchants greater flexibility at the point-of-sale, including the opportunity to steer to preferred payment methods and more optionality around surcharging. It also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.

“By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified,” said Kim Lawrence, President, North America, Visa. “Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”

Today’s settlement agreement with merchants resolves claims against Visa, Mastercard and other defendants brought by the injunctive relief class in the lawsuit entitled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. It is subject to approval by the court.


PURCHASE, N.Y.–(BUSINESS WIRE)– Mastercard (NYSE: MA) has reached an agreement to reduce its U.S. credit card interchange rates for at least a five-year period as part of a legal settlement with merchants.

The settlement, which also features a set of adjustments to Mastercard’s network rules, allows small businesses and all merchants to continue to benefit from accepting electronic payments while delivering consumers a simple and secure way to pay.

The agreement – agreed to by Mastercard, Visa and the court-appointed class counsel – provides all merchants with clarity and certainty on several areas related to their acceptance of payment cards, including:

  • Interchange rate reduction – Payment networks, including Mastercard, will reduce the published and effective interchange rate on U.S.-issued consumer credit and commercial credit transactions at U.S. merchant locations.
  • Five-year rate cap – The interchange reduction will effectively serve as a cap for a period of five years and will apply to all U.S.-issued credit programs, including new products required to be accepted under the Mastercard brand. The effort delivers merchants the certainty and visibility of their acceptance programs while supporting continued competition within the industry.
  • Simplified surcharging and discounting rules – As part of the settlement agreement, the networks will activate a simplified approach to credit card transaction surcharging, providing merchants more optionality. These rules will maintain core consumer protections and transparency, replacing standards that had been updated in 2012.

“This agreement brings closure to a long-standing dispute by delivering substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs,” said Rob Beard, Chief Legal Officer, General Counsel and Head of Global Policy at Mastercard. “As the court reviews the settlement, we will focus our energy on continuing to provide consumers, small businesses and all business owners what they expect from Mastercard – a better payments experience, strong value and peace of mind.”

The settlement is subject to final approval by the Eastern District Court of New York. Upon final approval of the class settlement by the court, Mastercard will have resolved the vast majority of all pending U.S. merchant litigations that are directed at seeking changes to the company’s interchange structure and merchant acceptance rules.

In agreeing to the settlement, Mastercard does not admit to any improper conduct with respect to the plaintiffs’ allegations. All rules practice changes will occur after approval of the settlement, most likely in late 2024 or early 2025.

This agreement follows a prior settlement with a damages class. That litigation and the impact to Mastercard are described in more detail in the company’s Annual Report on Form 10-K for the year-ended December 31, 2023.


NEW YORK, March 26, 2024 /PRNewswire/ — A landmark antitrust class action settlement has been reached between U.S. merchants and Visa Inc. (“Visa”) and Mastercard Incorporated (“Mastercard”) to resolve claims for injunctive relief in In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. The settlement, which is among the largest in U.S. antitrust history, is subject to approval by the U.S. District Court for the Eastern District of New York. The class includes all merchants who accepted Visa or Mastercard debit or credit cards in the United States at any time during the period between December 18, 2020 and the date of entry of final judgment by the court. The class is represented by Steve Shadowen of Hilliard Shadowen LLP; Robert Eisler of Grant & Eisenhofer PA; Michael Freed of Freed Kanner London & Millen LLC; and Linda Nussbaum of Nussbaum Law Group, P.C.

The settlement eliminates anti-competitive restraints that will deliver U.S. merchants billions of near- and long-term savings. At least $29.79 billion in savings will be realized in the five years following approval of the settlement from agreed upon caps and rollbacks on credit card processing fees, or “swipe fees.” Experts expect substantially greater additional savings as the agreed upon policy changes provide merchants of all sizes with new negotiating leverage against Visa and Mastercard. Under the proposed settlement terms, the amount of transactions eligible to be competitively priced by merchants will increase from less than 20% of transactions to 96%.

Steve Shadowen, co-lead counsel, said, “This settlement is the culmination of eight years of hard-fought litigation and detailed, painstaking negotiations. It provides comprehensive market-based solutions to too-high swipe fees, while providing immediate fee relief to merchants as they make these new competitive tools work for them.”

Robert Eisler, co-lead counsel, said, “This settlement achieves our goal of eliminating anti-competitive restraints and providing immediate and meaningful savings to all U.S. merchants, small and large.”

Michael Freed, co-lead counsel, said, “This is about securing policy changes that empower merchants over the long term, promote competition and restore balance to the market.”

Linda Nussbaum, co-lead counsel, said, “This settlement implements tools that will benefit merchants, big and small, while ensuring that the ecosystem remains conducive to the innovation that serves both merchants and consumers. In addition to rollbacks and caps, a merchant education program will facilitate merchant understanding of the rules changes and the benefits that can be achieved.”

“The Settlement Agreement opens competitive doors that have been closed for decades, while providing rate relief to every merchant that accepts Visa or Mastercard credit cards,” said Nobel laureate economist Dr. Joseph Stiglitz, who submitted a declaration on the settlement and its effects.

The settlement represents a major improvement upon the original agreement that was overturned by the Second Circuit in 2016. Key terms of the settlement include:

1) Applying three separate brakes to swipe fees, putting an end to their 25-year relentless upward spiral and delivering merchants at least $29.79 billion in savings over the next five years.

  • Brake 1: Visa and Mastercard will roll back the posted swipe fee of every merchant by at least four basis points for at least three years.
  • Brake 2For a period of five years, Visa and Mastercard will not raise the swipe fees of any merchant above the posted rates that existed as of December 31, 2023.
  • Brake 3: For a period of five years, the average effective systemwide swipe fee for Visa and Mastercard must be at least seven basis points below the current average rate. An independent auditor will verify the calculations.

2) Removing anti-steering restrictions and enabling competitive pricing. 

  • Merchants can charge for using a Visa or Mastercard credit card, regardless of whether they can charge for using American Express, whose rules for merchants were upheld by the Supreme Court in 2018.
  • Merchants can discount at the issuer level thereby steering consumers to more preferred cards and promoting increased competition among the networks and the numerous credit card issuers.
  • Merchants will be able to adjust prices based on the costs associated with accepting different credit cards, promoting efficient price signaling and enhancing transparency for consumers.
  • Merchants will be permitted to provide customers truthful information as to why they are applying a charge for credit card use.

3) Increasing small merchants’ ability to negotiate lower swipe fees from Visa and Mastercard.

  • Visa and Mastercard must negotiate swipe fees in good faith with merchant buying groups, and the agreement provides a streamlined process for resolving disputes.

4) Allocating $15 million for a merchant education program to advise and inform merchants on the settlement and effectively utilizing the rule changes. 

  • This will be the first independent merchant education program, available free of charge to all merchants of every size and category.

Importantly, the settlement prohibits Visa and Mastercard from circumventing the injunctive relief, providing strong anti-circumvention provisions and independent verification and calculations on swipe fees.

The settlement stems from a 2005 lawsuit which alleged that merchants paid excessive fees to accept Visa and Mastercard credit cards, and that Visa and Mastercard and their member banks acted in violation of antitrust laws. This injunctive relief follows the $5.54 billion financial settlement for all U.S. merchant class members which was finalized and approved by the Second Circuit Court of Appeals in March 2023.

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