CED Newsletters & Policy Alerts

Possible Swipe Fee Settlement

November 19, 2025

Action: On October 30, Visa and Mastercard (“the card networks”) and a group of merchants announced a preliminary settlement agreement that, if approved by a court, would resolve a 20-year-old lawsuit over the fees that the card networks charge merchants. Under the terms of the preliminary settlement, the card networks agreed to allow merchants to charge additional fees for – or refuse to accept – certain categories of cards and steer customers toward less costly cards. A judge will have to approve the settlement before it can take effect.

Trusted Insights for What's Ahead^®

• The lawsuit began in 2005 when a coalition of merchants and trade associations sued the card networks and major banks for allegedly using their market dominance to inflate the interchange (“swipe”) fees charged to merchants for processing card payments and prevent merchants from steering consumers toward lower cost options. The suit consolidated dozens of similar lawsuits in the Eastern District of New York.
• The parties initially reached a settlement agreement valued at $7.25 billion in 2012, but an appeals court vacated it in 2016. The court did approve a revised settlement addressing monetary, but not injunctive, relief valued at $5.5 billion in 2019. The most recent settlement addresses injunctive relief measures vacated when the court rejected the 2012 settlement.
• The Court rejected an earlier preliminary settlement for injunctive relief that would have offered an estimated $30 billion in concessions to merchants – including reduced swipe fees.
• It is unclear whether the court will approve the settlement. Following the announcement, a coalition of merchants again objected to the agreement, stating that it is “inadequate” and fails to address the reasons the court rejected the previous settlement. Some critics note that it only requires the card networks to temporarily reduce their fees by one-tenth of a point for five years, while fees typically amount to 2-3% of the transaction value. They also note that the card categories defined under the settlement – commercial, premium consumer, and standard consumer – are so broad that it is unlikely that merchants will choose to reject any category.
• Relatedly, the Court granted final approval of a plan for distributing part of the $5.5 billion in earlier settlement funds. In a separate case, Visa, Mastercard, American Express, and Discover agreed on October 16 to pay a combined $199.5 million to merchants for a shift in fraud liability implemented in 2015.
• What this means for business: If the court approves the settlement, merchants have several ways they may respond to the new rules. Some may choose to offer tiered pricing for products depending on what type of card a customer uses (and encourage customers to use debit cards instead), while others may avoid confusion and maintain one price for all credit card payment methods. However, analysts expect it is unlikely that merchants will refuse high-fee premium cards as a large share of cards fall into this category and premium card holders tend to be more affluent.