Judge Grants Preliminary Approval to $38 Billion Visa and Mastercard Settlement

A federal judge granted preliminary approval Tuesday to a $38 billion settlement between Visa, Mastercard and more than 12 million merchants. The agreement would end litigation that began in 2005 over allegations that the networks conspired to fix swipe fees.

U.S. District Judge Brian Cogan in Brooklyn, New York, ruled the revised deal fair, reasonable and adequate. He said final approval is likely. The decision comes nearly two years after a different judge rejected a prior $30 billion proposal.

Under the settlement, Visa and Mastercard will lower swipe fees by 0.1 percentage point for five years. Standard consumer card rates would be capped at 1.25 percent for eight years. Merchants could choose to accept or reject cards in three separate categories: commercial, premium consumer and standard consumer.

The new structure would end the long-standing "Honor All Cards" rule that required merchants to accept every Visa or Mastercard product. Merchants would also gain greater ability to impose surcharges on customers.

The National Retail Federation and the National Association of Convenience Stores said the settlement does not fix a broken credit card market. NACS General Counsel Doug Kantor predicted additional objections will be filed. Cogan acknowledged that some objections had merit but stated the settlement need not be perfect.

He noted that merchants would still pay to accept rewards cards and could not reject cards at the individual issuer level.

Visa shares rose 1.7 percent and Mastercard shares rose 2 percent on Tuesday. Swipe fees collected by the two networks reached $118.8 billion in the United States in 2025, according to the Merchants Payments Coalition. The Electronic Payments Coalition supported the settlement. Two experts retained by the plaintiffs estimated the changes could save merchants $38 billion by 2031.