Visa Mastercard Swipe Fee Settlement: $38 Billion, 21 Years of Litigation, and a Brooklyn Judge Who Just Gave Preliminary Approval

On June 10, 2026, U.S. District Judge Brian Cogan of the Eastern District of New York granted preliminary approval to the $38 billion settlement between Visa, Mastercard, and about 12 million U.S. merchants in a Brooklyn courtroom. He described the agreement as “fair, reasonable, and adequate” and hinted that he was likely to grant final approval. The merchants have been pursuing this case since 2005. This comes after twenty-one years of litigation, numerous settlement attempts, and a previous agreement that was ultimately rejected by a different judge.

With $38 billion in settlement value, $118.8 billion in swipe fees collected by Visa and Mastercard in 2025 alone, 12 million merchants, and a 0.1 percentage point fee reduction that both the settlement’s supporters and detractors view as a true structural improvement, the numbers involved are substantial enough to be somewhat abstract. All of these statements are true at the same time, and determining which one is most important will depend on whether you run a tiny restaurant or a major chain of stores, as well as whether you pay with a regular bank card or a premium rewards card.

U.S. District Judge Margo Brodie rejected the previous settlement in June of 2024. Her reasoning was straightforward: the “Honor All Cards” rule, which has required merchants to accept all Visa and Mastercard cards or none at all, would have remained in place, and the fees that would have remained after the settlement were still higher than they would have been in the absence of the antitrust violations. The main change in the revised settlement is that rule.

The new deal will provide shops the option of accepting only normal consumer cards, commercial cards, or premium consumer cards, such as rewards cards, which have higher interchange fees. In theory, it represents a substantial structural change. In reality, it’s probable that the majority of retailers will continue to accept all cards in order to prevent the friction that rejection causes with customers. However, the choice is now available.

Swipe fees have increased from $25.6 billion in 2009 to $118.8 billion in 2025. The charge reduction parameters, which are 0.1 percentage points for five years and normal consumer rates capped at 1.25 percent for eight years, are set against this backdrop. 2.36 percent on average. Even after the preliminary permission was granted, the National Retail Federation and other significant trade associations continued to strongly oppose the 0.1 point cut, which in that perspective represents a tiny portion of the overall cost.

They make the simple claim that the fundamental fee structure, which they describe as the result of price-fixing and market concentration, is essentially unchanged. Walmart and other major retailers have objected individually, arguing that merchants would still be required to take all cards from all issuers within a certain network. This means that they could not, for instance, refuse JPMorgan Chase Visa cards while taking Bank of America Visa cards. The settlement does not include the inter-issuer discrimination that the objectors sought.

If the agreement is approved, it is important to consider how it will affect consumers. Merchants who wish to use them can now pass the cost of processing premium cards straight to the consumers who make payments using those cards thanks to the enhanced surcharging powers. When a customer uses a point-heavy credit card at a restaurant or hardware store, they could notice a fee line at the register that wasn’t there before.

On the other hand, the same client may receive a discount from the same merchant if they use a regular debit card. This could annoy consumers who believe they are being penalized for using cards they explicitly selected for their benefits, but it also makes the hidden subsidy of interchange fees more apparent, something transparency supporters typically embrace.

As this dispute finally approaches what may be its resolution after more than 20 years, there’s a sense that the settlement represents the best outcome that Visa and Mastercard were ready to offer rather than the best one that the merchant community feels they are legally entitled to.

It is still really uncertain if Judge Cogan believes the settlement’s improvements over the rejected 2024 pact adequate to earn final approval, or if he concurs with the National Retail Federation’s last objections. The 21-year legal battle is still ongoing. However, it is coming to an end for the first time in a long time.