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The proposed resolution to decades-old swipe-fee litigation is under fire from merchant groups, intensifying pressure on lawmakers and regulators to intervene in the card-payments market.

On November 10, 2025,  and  published the settlement agreement they have reached with counsel representing a group of merchants known as the “injunctive rules relief class”.

This class represents merchants seeking changes to the card networks’ rules. It was established after the courts ruled in 2016 that the monetary and injunctive claims could not be resolved within a single class.

The next stage of the process will see the settlement agreement go to Judge Brian Cogan of the Eastern District of New York for approval.

The proposed settlement offers four key changes to the card networks’ fees and rules:

• Interchange rate reduction – Both networks would reduce the average systemwide effective interchange rate on US domestic credit card transactions by 10 basis points.
• Five-year rate cap – The 10 basis point interchange reduction would stay in place for five years.
• Acceptance flexibility – Merchants would be given new powers to accept or reject transactions from different categories of credit card (“standard consumer”, “premium consumer”, “commercial”), but would not be allowed to discriminate between the same card type issued by different financial institutions.
• Simplified surcharging and discounting rules – Merchants would be given more flexibility to surcharge and discount for credit card transactions. Merchants that apply these measures would continue to be subject to notification, disclosure and reporting requirements.

Neither Visa, Mastercard nor the bank defendants named in the lawsuit admit any wrongdoing or liability with respect to the plaintiffs’ allegations.

Negative reaction

The proposed settlement is designed to relieve pressure from retailers on the card networks and their bank partners, but has not been positively received so far.

,  are among the plaintiffs that have requested, and been granted, an extra 30 days to assess the proposed settlement and potentially file an opposition to its approval.

However, the  and the  have already voiced strong opposition to the settlement.

“Once again, this proposal is all window dressing and no substance,” said Stephanie Martz, chief administrator and general counsel of NRF.

“The reduction in swipe fees doesn’t begin to go far enough, and the change in the honor-all-cards rule would accomplish nothing.

“This is the third attempt to settle this case, and the card industry either just doesn’t get it or just doesn’t care.”

Interchange fees – a return to the status quo?

Both the NRF and MPC described the proposed interchange fee reduction as “inadequate”, noting that it would have no impact on how Visa and Mastercard set these fees in the future.

In 2024, according to data from the , the average interchange fee for US domestic credit card transactions was 2.35 percent.

Reducing this by 10 basis points would bring it to 2.25 percent, which is almost identical to the 2023 average of 2.26.

Martz pointed out that this would lock in the rise in interchange fees since 2010, when the average was 2.02 percent.

Moreover, the temporary reduction would not prevent Visa and Mastercard from “centrally setting” the interchange fees that issuing banks must charge in future.

In previous attempts to settle the lawsuit, this has been a key sticking point, given that the lawsuit argues that this practice constitutes “unlawful price fixing”.

Jennifer Hatcher, executive committee member at the MPC, added that the “miniscule” reduction in interchange fees would also have no effect on scheme fees.

“All of the supposed merchant and consumer savings could easily be canceled by Visa and Mastercard increasing their fees,” she said.

End of the ‘honor-all-cards’ rule

Under the current “honor-all-cards” rule, merchants that accept any Visa or Mastercard credit card must accept all such cards, regardless of their associated costs.

In the lawsuit, plaintiffs argue that this practice, combined with anti-steering restrictions violates antitrust law, forcing merchants to accept transactions from expensive rewards and commercial cards, whose interchange fees can be as high as 4 percent.

The proposed settlement would classify all Visa and Mastercard credit cards as “standard consumer”, “premium consumer” or “commercial”.

Merchants would then be free to accept or decline transactions from any of these categories.

However, Martz has argued that this new taxonomy is “meaningless”, given that 85 percent of cards in circulation are now rewards cards (per NRF data).

“Retailers have no choice but to accept them,” she said, adding that they will “effectively be required to continue to honor all cards”.

Time for Congress to step in?

If the settlement is approved in its current form, it is likely to face further legal challenges from dissatisfied plaintiffs.

An earlier proposed settlement, which combined monetary compensation with changes to Visa and Mastercard’s rules, followed a similar trajectory. It was given final approval in 2013 but was overturned by an appeals court in 2016.

After that ruling, the damages claims proceeded separately and were resolved in a 2018–19 settlement worth roughly $6.2bn, which is now final, although rules claims continue to be litigated.

If approved, the latest settlement is likely to galvanise support for the Credit Card Competition Act (CCCA).

In June 2023, the CCCA was read twice and referred to the Senate Banking Committee, but has made no further progress in Congress to date.

Nonetheless, key plaintiffs in the swipe fee lawsuit continue to look to the CCCA as a fallback option, should a settlement agreement fail to satisfy their claims.

As Martz has said: “If the courts can’t fix this, it’s time for Congress to take action.”

The NRF continues to call on Congress to pass the CCCA. Under the bill, the largest US banks would be required to enable credit card processing over at least one unaffiliated network (such as Star, NYCE or Shazam) in addition to Visa or Mastercard.

If the CCCA is enacted, global payments research firm CMSPI  that it will save $17bn in annual interchange fees.

For payments organisations, the outcome of this settlement process may have far-reaching implications. Changes to interchange structures, card-acceptance rules or network competition could alter issuer revenues, merchant-acquiring economics and the balance of power between networks and alternative payment rails.

Payments providers should therefore prepare for a period of heightened scrutiny, adapting their pricing and product strategies and engaging with merchants and policymakers as the next phase of US card-fee reform unfolds.