Visa and Mastercard have agreed to cap the so-called swipe fees they charge to merchants that accept their credit cards, as part of a class-action settlement that could save merchants an estimated $30 billion over five years — the latest development in a nearly 20-year legal battle.
Each time a customer uses one of its credit cards, Visa or Mastercard collects a swipe fee — also called an interchange fee — for processing the transaction, which it shares with banks issuing the cards.
The settlement, which was announced on Tuesday and is subject to court approval, can be traced back to a 2005 lawsuit by merchants arguing that they paid excessive fees to accept Visa and Mastercard credit cards.
As more consumer spending has shifted to credit cards over the years, processing fees have also risen.
To accept Visa and Mastercard, U.S. merchants paid $101 billion in total fees in 2023, including $72 billion in interchange fees, according to the Nilson Report, which tracks the payments industry.
Persons:
Nilson
Organizations:
Visa, Mastercard