• Wed. May 29th, 2024

Visa and Mastercard Reach Settlement with Merchants to Reduce Swipe Fees: What You Need to Know

BySamantha Jones

Mar 27, 2024
Visa and Mastercard Reach $30 Billion Settlement to Reduce Merchant Fees

Visa and Mastercard have reached a settlement with merchants to reduce swipe fees paid by merchants for credit card transactions. The agreement is expected to lower the fees by $30 billion over a five-year period, following a lengthy antitrust case initiated by merchants against the credit card giants. Despite this reduction, cardholders will not see changes in their rewards programs, according to statements made by the companies.

The case, filed in 2005, focused on reducing swipe fees paid by merchants during credit card transactions. Merchants pay about 2% of the total transaction amount, with costs possibly rising to 4% for certain premium rewards cards. The settlement aims to reduce these fees by at least 0.04 percentage points for a minimum of three years. However, it’s worth noting that this is not the finalized amount and is still awaiting approval from the US District Court for the Eastern District of New York. The case could also be subject to appeal, extending an already long legal process.

In response to the settlement, credit card companies like Visa and Mastercard confirmed that rewards programs and credit access will remain the same for cardholders. Additionally, recent news of a potential merger between Discover and Capital One suggests ongoing changes in the credit card industry. Visa and Mastercard stock prices experienced slight increases following the announcement of the settlement, indicating investor confidence in the deal.

It’s important for consumers to understand that this settlement does not affect their ability to use their Visa or Mastercard cards or their rewards programs. However, if approved, it could lead to lower swipe fees for merchants which may result in lower prices for consumers in some cases. This story is still developing and updates will be provided as more information becomes available.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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