By Jonathan Stempel
NEW YORK, June 9 (Reuters) - A U.S. judge on Tuesday granted preliminary approval to Visa's and Mastercard's revised $38 billion settlement with merchants who accused the card networks of charging too much to process payments on their credit cards.
U.S. District Judge Brian Cogan in Brooklyn, New York ruled nearly two years after a different judge rejected a proposed $30 billion settlement as too small.
The settlement announced last November was intended to end litigation that began
in 2005, when merchants accused Visa, Mastercard and banks of conspiring to violate U.S. antitrust laws, including through the collection of "swipe fees."
Some trade groups including the National Retail Federation, the Merchants Payments Coalition, and the National Association of Convenience Stores objected to the revised settlement as well.
They said it would leave merchants with the unwelcome choice of paying too much to accept the popular rewards cards that dominate the card market, or lose revenue by not accepting those cards.
Objectors included Walmart, which called the settlement a "gift" to Visa and Mastercard because it let them lock in anticompetitive conduct that has persisted for more than 30 years "without fear of being challenged by large national merchants."
Supporters included the Electronic Payments Coalition, whose members include the card networks and large issuers such as Bank of America, Capital One, Chase and Citibank.
Swipe fees, also known as interchange fees, totaled $118.8 billion for Visa and Mastercard in the United States in 2025, up from $111.2 billion in 2024 and $25.6 billion in 2009, the Merchants Payments Coalition said. The average fee was 2.36%.
SETTLEMENT PROPOSES FIVE-YEAR FEE CUT
The latest settlement called for Visa and Mastercard to lower swipe fees by 0.1 percentage point for five years, while standard consumer rates would be lowered to no more than 1.25% for eight years.
Merchants would get more options to impose surcharges on customers and could choose whether to accept categories of cards. These categories included commercial cards, premium consumer cards - including many rewards cards - and standard consumer cards.
Supporters of the settlement said that provision would end the "Honor All Cards" rule, which required merchants to accept all Visa and Mastercard cards or none.
Two experts hired by the plaintiffs, Nobel Prize-winning economist Joseph Stiglitz and University of Washington professor Keith Leffler, said the changes could save merchants $38 billion by 2031 and provide $224 billion of benefits overall, including to consumers.
The $30 billion settlement would have lowered swipe fees by 0.07 percentage points over five years and also allowed more surcharges.
In rejecting that accord in June 2024, U.S. District Judge Margo Brodie said fees would have still been above where they were absent any antitrust violations.
She also said the earlier settlement improperly stuck merchants with the "Honor All Cards" rule.
Walmart and other objectors called the changes illusory because merchants would still have to "honor all issuers" in a given network - meaning, for example, they could not accept cards from one bank and reject cards from another.
(Reporting by Jonathan Stempel in New York)
