What the $38 billion Visa, Mastercard swipe fee settlement means for credit card users

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A $38 billion Visa and Mastercard settlement with merchants accusing the credit card networks of charging excessive processing fees has been approved by a U.S. district judge. While the decision does not grant final approval, it is another step in a legal battle that has lasted for more than 20 years.

A previous $30 billion settlement of the case was rejected two years ago in a different court.

The dispute centers on "swipe fees," the charges merchants pay when customers use a credit card. A class-action suit filed by more than 12 million merchants in 2005 accused Visa and Mastercard of charging excessive processing fees. In 2025, the credit card network charged merchants almost $119 billion in swipe fees.

Many merchants, particularly small businesses, either absorb the cost or pass the processing fees of 3% to 4% on to customers as surcharges, or offer similar discounts for cash payments.

If granted final approval, what will the settlement mean for consumers?

Under the proposed settlement, Visa and Mastercard have agreed to lower swipe fees (also known as interchange fees) by 0.1 percentage point for five years. The standard consumer card fee would be capped at 1.25% for eight years. In 2024, merchants paid an average of 2.35% in processing fees.

Whether any savings would be passed along to consumers remains uncertain.