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

Breakthrough Settlement: Visa, Mastercard to Lower Merchant Fees in Landmark Agreement

In a landmark agreement, Visa and Mastercard have reached a settlement with merchants to lower merchant fees. The case, which has been ongoing for decades, involves 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 will lower swipe fees paid by merchants when customers use premium rewards cards 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, 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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