Visa and Mastercard Reach Historic Settlement with Merchants to Lower Swipe Fees, Cutting $30 Billion in Costs over Five Years

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

In a major development, Visa and Mastercard have reached a settlement with merchants to lower merchant fees. This agreement, which only applies to US merchants, is expected to reduce swipe fees paid by merchants when customers use Visa or Mastercard by $30 billion over a five-year period. 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 would lower these fees by at least 0.04 percentage points for a minimum of three years. Usually, swipe fees cost merchants around 2% of the total transaction, but for premium rewards cards, it can go up to 4%. 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 a related development, 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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