The deal ends the “Honor All Cards” rule and cuts interchange fees for five years, but retailer groups say it doesn’t fix a “broken” market and plan further challenges
A US judge has granted preliminary approval to Visa and Mastercard’s revised $38 billion settlement with merchants over interchange fees, calling the deal covering more than 12 million merchants “fair, reasonable, and adequate.”
US District Judge Brian Cogan’s ruling comes nearly two years after a different judge rejected an earlier $30 billion settlement as inadequate. That earlier deal would have cut swipe fees by just 0.07 percentage points over five years; the revised settlement cuts fees by 0.1 percentage points over the same period, while capping standard consumer rates at 1.25% for eight years.
The more significant change is structural. Merchants will be able to choose whether to accept cards in three separate categories: commercial cards, premium consumer cards (including the rewards cards that dominate the market), and standard consumer cards. That effectively ends the long-standing “Honor All Cards” rule, which required merchants to accept all of a network’s cards or none. Merchants also gain more flexibility to impose surcharges.
Swipe fees totalled $118.8 billion for Visa and Mastercard in the US in 2025, up from $25.6 billion in 2009, according to the Merchants Payments Coalition, with an average rate of 2.36%.
Not everyone is satisfied. The National Retail Federation and the National Association of Convenience Stores said the settlement still fails to address what they call a broken credit card market, with NACS General Counsel Doug Kantor predicting further objections. Their core complaint: merchants still cannot reject cards at the issuer level, and in practice few will choose to reject premium rewards cards given consumer demand for them.
Cogan acknowledged the objections had merit but said the settlement didn’t need to be perfect. “The question is not whether the amended settlement constitutes the best possible recovery, end stop, it’s whether the amended settlement constitutes the best possible recovery in light of what can be gained and lost through trial,” he said.
Two economists hired by the plaintiffs, including Nobel laureate Joseph Stiglitz, estimated the changes could save merchants $38 billion by 2031 and deliver $224 billion in total benefits, including to consumers.
Visa shares rose 1.7% and Mastercard shares rose 2% following the ruling. Visa said the settlement gives merchants more flexibility, while Mastercard described it as balancing the interests of all parties. The Electronic Payments Coalition, whose members include major card issuers such as Bank of America, Capital One, Chase and Citibank, supported the deal.