A $38 billion settlement between Visa, Mastercard, and millions of merchants got preliminary court approval Tuesday, June 9 — the clearest sign yet that a 20-year legal fight over interchange fees may finally be closing.
Judge Brian Cogan of the Eastern District of New York said the settlement was “fair, reasonable, and adequate.” That’s the legal threshold, not a ringing endorsement, but it moves the case toward final approval.
The case began in 2005 under MDL 1720, when businesses accused Visa, Mastercard, and large issuing banks of colluding to fix swipe fees in violation of U.S. antitrust law. Key terms: a 0.1 percentage point reduction in interchange rates for five years, a 1.25% cap on standard consumer credit card rates, and broader merchant rights to surcharge and selectively accept card categories.
The Electronic Payments Coalition put the total value at more than $200 billion over eight years. That framing is doing a lot of work. The $38B figure is projected savings, not a cash payment, and the 0.1pp fee cut merely rolls rates back to 2023 levels.
Large retailers don’t agree the terms are meaningful. The National Retail Federation called it “all window dressing”, and the National Association of Convenience Stores filed formal objections in December. A prior settlement was rejected in 2024; Cogan is the second judge on this case.
The structural issue is this: the settlement freezes rates temporarily but doesn’t address the mechanism that allows networks to centrally set interchange rates across all issuing banks. That’s the core antitrust allegation, and it’s still intact. Worth reading the full settlement terms before you draft your Q3 surcharge policy.
— Rebecca Lauren