Reduced Swipe Fees for US Merchants: Visa and Mastercard Announce Landmark Settlement to Boost Small Businesses

Visa and Mastercard Reach $30 Billion Settlement to Reduce Merchant Fees

In a landmark settlement, Visa and Mastercard have agreed to reduce merchant fees paid by US merchants when customers use their cards. The case, which has been ongoing for decades and involves credit card networks and banks that issue them, is expected to save merchants $30 billion over a five-year period. The agreement was the result of a lawsuit filed in 2005 and must still receive approval from the US District Court for the Eastern District of New York.

Swipe fees typically cost merchants around 2% of the total transaction, but for premium rewards cards, it can go up to 4%. Under this settlement, these fees would be reduced by at least 0.04 percentage points for a minimum of three years. Visa and Mastercard have assured that the rewards received by cardholders will not be impacted by the settlement, and Americans’ access to credit will not be restricted as a result either.

Mastercard spokesman Seth Eisen confirmed that the settlement would not affect rewards or credit access for cardholders. In related news, Discover and Capital One recently announced a merger that will create the largest credit card company in the country upon approval by regulators and shareholders. Following the announcement of the settlement, shares of Visa and Mastercard slightly increased. This story is still unfolding and will be updated as more information becomes available.

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