June 16, 2024

Visa and Mastercard Reach Historic Settlement with Merchants to Lower Swipe Fees

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

In recent news, Visa and Mastercard have reached a settlement with merchants aimed at lowering merchant fees. The case has been ongoing for decades, involving not only the credit card networks but also the banks that issue cards with them. The settlement is expected to reduce swipe fees paid by merchants when customers use Visa or Mastercard by $30 billion over a five-year period. This agreement, which only applies to US merchants, is the result of a lawsuit filed in 2005. However, it must still receive approval from the US District Court for the Eastern District of New York.

The settlement would lower swipe fees paid by merchants for premium rewards cards by at least 0.04 percentage points for a minimum of three years. This move is sure to benefit both consumers and merchants alike. 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.

In related news, Discover and Capital One recently announced a merger that, upon approval by regulators and shareholders, will create the largest credit card company in the country. 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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