Visa and Mastercard Could Lower Fees in $38 Billion Settlement-Here’s What It Means for You

Visa and Mastercard could lower some of the fees they charge retailers in the U.S. as part of a possible $38 billion settlement. Here’s what that could mean for you.

The companies announced the settlement on Monday, after 20 years of litigation over Visa, Mastercard, and banks allegedly conspiring too violate U.S. antitrust laws, according to Reuters.

Visa and Mastercard have not admitted to wrongdoing in agreeing to settle.

Newsweek has contacted Visa and Mastercard, via email, for comment.

Why It Matters

The agreement, pending court approval, ends two decades of litigation involving antitrust allegations over how these fees are set.

Swipe fees are a key cost driver for both businesses and consumers, influencing product pricing and the availability of credit card rewards.

The debate highlights broader issues over consumer costs, competition in the financial sector, and the future of credit card processing in the United States.

What To Know

Monday’s settlement woudl call for the following:

• Visa and Mastercard would lower swipe fees, also called interchange fees, by 0.1 percentage point for five years-they averaged 2.35 percent last year,according to Reuters.
• Standard consumer rates would be reduced by more than 25 percent and capped at 1.25 percent for eight years.