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Why Swipe Fees Aren't Dropping Yet: Inside the Visa and Mastercard Settlement Fight

By Yan Payments

Are swipe fees actually coming down soon?

Not by much, and not yet. A federal judge in Brooklyn is set to rule on November 16, 2026 on whether to grant final approval to a new Visa and Mastercard interchange settlement, and hundreds of merchants and trade groups are fighting to stop it, arguing the relief on offer is too small, too temporary, and comes at too high a price.

What’s actually in the proposed settlement?

The case is In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, a two-decade-old antitrust fight over the fees merchants pay every time a card gets swiped, tapped, or keyed in. Judge Brian Cogan, in the Eastern District of New York, gave this version of the settlement preliminary approval on June 9, 2026, calling it “fair, reasonable and adequate.”

Here’s what’s actually on the table:

Today Proposed settlement
Average credit interchange rate current levels cut by 0.1 percentage points, for 5 years
Standard consumer card rate no cap capped at 1.25%, for 8 years
Network fees (separate from interchange) unchanged unchanged
Future lawsuits over this conduct open released, for Visa, Mastercard, and issuing banks

Some financial press coverage puts the overall value of the deal at around $38 billion over its term. That figure comes from news reporting rather than a court filing, so treat it as an estimate, not a number to build a forecast on.

Who’s objecting, and why?

By the Merchant Payments Coalition’s own count, 978 businesses and trade associations have filed formal objections, including Walmart, Circle K, and the convenience-store trade group NACS. The objections cluster around three points.

First, the relief is temporary. The rate cut expires after five years and the rate cap after eight, so merchants could end up right back where they started once the clock runs out. Second, the release is broad. In exchange for that temporary cut, Visa, Mastercard, and the major issuing banks get protected from future interchange lawsuits over this same conduct, a wide shield for a narrow concession. Third, it doesn’t touch the real driver of cost growth for a lot of merchants: network fees, the separate charges Visa and Mastercard bill directly on top of interchange, are left completely alone.

This also isn’t the first settlement in this case to collapse under merchant pressure. The Second Circuit threw out a $7.25 billion deal in 2016, and Judge Margo Brodie rejected a roughly $30 billion injunctive-relief proposal in June 2024. A third attempt facing this much pushback fits the pattern of this litigation rather than breaking it.

When does this actually get decided?

The final fairness hearing, where Judge Cogan rules on whether the settlement gets final approval, is scheduled for November 16, 2026. Objectors get to make their case there in person. Given that the two prior settlements in this same MDL didn’t survive, a further delay, a modified deal, or an outright rejection are all realistic outcomes, not just a formality on the way to a rubber stamp.

Does this change what you can charge customers at checkout?

No. This settlement is about the wholesale interchange rates baked into every transaction before your processor even adds its markup. It has nothing to do with surcharging, which is a separate, state-specific legal question with its own compliance risks, including here in California. Confusing the two is a common mistake: a lower interchange rate someday wouldn’t give you new legal room to add a card fee at checkout today, and a settlement delay doesn’t change what you’re currently allowed to charge either.

What should you actually do about this right now?

Nothing changes yet, and nothing is guaranteed to change even after the hearing happens. If you’re building a 2027 budget, don’t pencil in interchange savings based on a settlement that hasn’t been finalized, and that in the best case only moves the average rate by a tenth of a percentage point for five years.

The more useful exercise, with or without this settlement, is figuring out what you’re actually paying today, split between interchange (set by the card networks, not something you negotiate merchant to merchant) and your processor’s markup on top of it (which usually is negotiable). If you want a second set of eyes on your statement, reach out and we’ll walk through it with you.

This is general information about pending litigation, not legal advice.

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