• Mon. May 20th, 2024

Visa, Mastercard and Banks to Reduce Merchant Fees in Historic Antitrust Settlement

BySamantha Nguyen

Mar 27, 2024
Visa and Mastercard Reach $30 Billion Settlement to Reduce Merchant Fees

A settlement has been reached between Visa, Mastercard and banks that issue cards using these networks, aimed at reducing merchant fees. This follows a long antitrust case initiated by merchants against the credit card giants. Under the agreement, swipe fees that merchants pay for Visa or Mastercard purchases are projected to decrease by $30 billion over a five-year period.

The case, which was filed in 2005, centered on lowering swipe fees that merchants incur during credit card transactions. Normally, merchants pay about 2% of the total transaction amount, with costs possibly rising to 4% for certain premium rewards cards. The settlement aims to reduce these fees by at least 0.04 percentage points for a minimum of three years. Despite this reduction, Visa and Mastercard cardholders will not see changes in their rewards programs or credit access according to statements made by the companies.

In response to the settlement, credit card companies like Visa and Mastercard confirmed that their rewards programs and credit access will remain the same for cardholders. However, recent news of a potential merger between Discover and Capital One signals ongoing changes in the credit card industry. Visa and Mastercard stock prices experienced slight increases following the announcement of the settlement, indicating investor confidence in the deal.

It is important to note that the settlement has not been finalized yet and is awaiting approval from the US District Court for the Eastern District of New York. The case could also be subject to appeal, extending an already long legal process. This story is still developing and updates will be provided as more information becomes available.

By Samantha Nguyen

As a content writer at newsskio.com, I weave words to craft compelling narratives that captivate readers and bring stories to life. With a keen eye for detail and a passion for storytelling, I strive to create engaging and informative content that resonates with our audience. Whether I'm delving into the latest news trends or exploring unique angles on various topics, my goal is to deliver quality content that informs, entertains, and inspires. Join me on this journey as we uncover the news stories that matter most.

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