After two decades of litigation, Visa and Mastercard have a proposed equitable-relief settlement with U.S. merchants that a federal judge has preliminarily approved. It is separate from the earlier monetary settlement in the case. Headlines describe it as a cut in "swipe fees". For a business owner the real question is simpler: will my processing bill go down, and how would I know?
This article covers:
- what the settlement would change;
- where approval stands as of October 20, 2026;
- why the answer for your business depends mostly on your pricing model.
This is general information, not legal or financial advice. The settlement is not final and its terms could change.
Key takeaways
- The settlement would cut the average Visa and Mastercard credit interchange rate by 0.10 percentage points for five years. Standard consumer credit cards would be capped at 1.25% for eight years.
- Merchants would get more freedom to decline certain card categories and to surcharge credit cards up to 3%, subject to state law.
- It received preliminary approval on June 9, 2026. A fairness hearing is scheduled for November 16, 2026, at 11:00 a.m.; final approval is still pending.
- It covers Visa and Mastercard credit only. Your processor's markup and fees aren't part of it.
- On interchange-plus pricing, a lower interchange rate should pass straight through. On flat-rate or tiered pricing, your price changes only if your processor changes it.
What is the Visa–Mastercard settlement?
The case dates back to 2005, when merchants sued Visa and Mastercard over interchange, the fees paid to card-issuing banks on every card transaction, and over the rules that came with accepting their cards. An earlier proposed settlement was rejected by the court in June 2024.
Visa and Mastercard announced a revised settlement in November 2025. On June 9, 2026, U.S. District Judge Brian Cogan of the Eastern District of New York granted it preliminary approval, calling it "fair, reasonable and adequate" (Payments Dive). The class covers roughly 12 million merchants. The official settlement site lists a fairness hearing for November 16, 2026, at 11:00 a.m. The hearing is a step toward a final decision, not final approval itself.
What the settlement would change
1. A 0.10% cut in average credit interchange, for five years
Both networks agreed to a 10-basis-point (0.10 percentage point) reduction in the average systemwide effective interchange rate on U.S.-issued consumer and commercial credit transactions. The reduction is designed to work as a cap for five years (Mastercard Form 8-K).
Note the word average. The cut applies across the whole system, not as 0.10% off every rate on your statement. How much of it shows up for your business depends on your card mix.
2. A 1.25% cap on standard consumer credit cards, for eight years
Interchange on standard (non-premium) consumer credit cards would be capped at 1.25% for eight years (American Banker). Premium rewards and commercial cards aren't covered by the cap, and they make up much of what most businesses accept.
3. More choice about which cards to accept
Today, the "honor all cards" rules mean that if you accept one Visa or Mastercard credit card, you accept them all. The settlement would let merchants decide separately on consumer credit and commercial credit cards, and on standard and premium cards. Merchants still could not treat the same level of card differently depending on which bank issued it (Mastercard Form 8-K).
4. Simpler credit card surcharging
The networks would adopt a simplified approach to surcharging credit cards, with a cap of 3% of the transaction (Arnall Golden Gregory). Today Mastercard's cap is 4% and Visa's is 3%. State laws on surcharging still apply, and surcharging debit cards remains prohibited under network rules.
What the settlement does not cover
- Debit cards. The interchange cut and the 1.25% cap apply to credit. Debit interchange for large issuers is regulated separately by the Federal Reserve.
- American Express and Discover. They aren't parties to this settlement.
- Your processor's markup and fees. Monthly fees, per-transaction markups, PCI fees, tiered rates and everything else your processor charges are set by your agreement, not by Visa or Mastercard.
When would it take effect?
The official settlement site lists a fairness hearing for November 16, 2026, at 11:00 a.m. Final approval has not yet been granted. Any later implementation depends on the court's decision, subsequent network rules, and any further proceedings. Check the official settlement site and notices for updates rather than treating a projected implementation date as certain.
In other words, nothing changes on your statement because of this settlement today. Be wary of any notice or sales pitch that says otherwise.
Will your processing fees actually drop?
This is the part the headlines skip. Interchange is only one layer of your bill. Whether a lower interchange rate reaches you depends on how your processor prices you.
| Your pricing model | What happens when interchange goes down |
|---|---|
| Interchange-plus (cost-plus, pass-through) | Interchange is billed at cost, so a lower published rate should flow straight through, provided your processor bills the actual published rate. |
| Subscription / membership | Usually the same as interchange-plus: interchange passes through at cost. |
| Tiered (qualified / mid / non-qualified) | Your rates are set by your processor. A lower cost underneath doesn't change them unless your processor lowers them. |
| Flat rate | Same as tiered. One rate covers everything, so a lower interchange cost is absorbed unless the rate changes. |
Even on interchange-plus, "should flow through" is not the same as "did." If a processor keeps billing an old rate after the published rate falls, the difference becomes markup inside a line labeled as cost. The only way to know is to compare the billed interchange lines with the networks' published schedules after the change takes effect.
How big is 0.10%?
It's simple arithmetic. Ten basis points on $50,000 a month of credit card sales is $50 a month. That's the scale of the average cut, not a promise for any one business: your actual change could be larger or smaller depending on your card mix. It also depends on whether anything else on your statement moves at the same time. Processors sometimes announce their own increases alongside network changes.
Before you decline cards or add a surcharge
The new acceptance and surcharging options could be valuable, but they come with trade-offs:
- Customers notice. Turning away a customer's preferred card, or adding a fee at checkout, can cost sales. Know which cards make up your volume before you decide.
- State law still applies. Surcharging rules vary by state, and some states restrict it.
- Notice and disclosure rules apply. Surcharging already requires advance notice to your processor and clear disclosure to customers. Expect similar requirements under the new rules.
- Know your cost of acceptance first. A surcharge is meant to offset what cards cost you. Without knowing that cost, you can't set one sensibly.
What to do now
- Find out which pricing model you're on. It determines whether a settlement cut can reach you at all. Our guide to reading a credit card processing statement shows how to tell.
- Keep a baseline. Save a recent statement and know your current effective rate (total fees ÷ total card sales). When changes arrive, you'll have something to compare against.
- Read the message box. Watch for notices that cite "card brand changes" or "network updates", and ask for specifics in writing.
- Check the interchange lines when the change lands. On interchange-plus pricing, compare billed rates with the networks' published schedules for that month.
- If you're on flat-rate or tiered pricing, ask directly. Ask your processor in writing whether it will lower your rates when interchange falls.
How Statement Forensics can help
Statement Forensics reads your statement independently and separates the card networks' published costs from your processor's own price, in plain English. Visa and Mastercard charges are compared with the networks' published schedules, and every figure is checked against the statement's own printed totals. That gives you a baseline today and a way to confirm later whether the settlement's cut actually reached you.
We don't sell processing, have no processor or ISO affiliation, and take no residuals or referral fees. Statements sent for an audit are used to produce the reports and deleted when they're delivered. US statements only.
Email a recent statement to audit@statementforensics.com to get started.
Frequently asked questions
Is the Visa–Mastercard settlement final?
No. The court granted preliminary approval on June 9, 2026, but final approval has not been granted. The official settlement site lists a fairness hearing for November 16, 2026, at 11:00 a.m. Check that site for notices and updates.
How much will the settlement lower credit card fees?
It would lower the average Visa and Mastercard credit interchange rate by 0.10 percentage points for five years, and cap standard consumer credit cards at 1.25% for eight years. Your own change depends on your card mix and, above all, on your pricing model.
Does the settlement lower debit card fees?
The interchange cut and the 1.25% cap apply to credit cards. Debit interchange for large banks is regulated separately by the Federal Reserve.
Will my processor automatically pass the savings on to me?
On interchange-plus or subscription pricing, interchange is billed at cost, so a lower rate should pass through. Confirm it by comparing billed interchange with the published rates. On flat-rate or tiered pricing, your rates change only if your processor lowers them.
Can I refuse premium rewards cards after the settlement?
If the settlement is approved as proposed, merchants could choose separately whether to accept standard and premium consumer credit cards, and commercial credit cards. They still couldn't treat the same level of card differently depending on the issuing bank. The details and timing depend on final approval and the networks' new rules.
Can I surcharge credit cards under the settlement?
The settlement would simplify credit card surcharging, with a cap of 3% of the transaction. State laws still apply, surcharging debit cards remains prohibited under network rules, and notice and disclosure requirements apply.