Visa and Mastercard have reached a revised credit card settlement with U.S. merchants, receiving preliminary court approval in June 2026. The core benefit is a 10-basis-point reduction in the combined average effective interchange rate on eligible U.S. credit card transactions for five years. For many merchants, the greater long-term value will come from new rights around product-level surcharging, selective card and wallet acceptance, and the ability to form buying groups to negotiate directly with the networks.
After more than two decades of litigation, Visa and Mastercard have reached a revised settlement with U.S. merchants. Preliminary court approval was granted on June 9, 2026.
The original 2024 settlement was rejected by the court for providing insufficient merchant benefits, which led to additional mediation and the current agreement. There is no monetary payment to class members. Benefits come exclusively through rate reductions and rule changes, including product-level surcharging, selective card and wallet acceptance, and the ability to form merchant buying groups to negotiate directly with Visa and Mastercard.
Which Merchants Does the Visa Mastercard Settlement Apply To?
The settlement covers U.S. credit cards accepted since December 18, 2020 — debit, prepaid, and foreign cards are excluded
If you have accepted Visa or Mastercard credit cards issued in the U.S. since December 18, 2020, this settlement applies to you.
The settlement does not apply to:
- Debit cards
- PIN debit transactions
- Prepaid cards
- Foreign-issued cards
This distinction matters more than it might seem. A merchant whose volume skews heavily toward debit or international cards will see significantly less benefit than one with a credit-heavy mix, so the first step is understanding what portion of your annual volume actually falls within scope.
How Much Can Merchants Save from the Visa Mastercard Interchange Settlement?
The headline is a 10-basis-point rate reduction — but actual savings depend on your card mix and industry
The headline benefit is a 10-basis point (0.10%) reduction in the combined average effective interchange rate on eligible U.S. credit card transactions for five years. As a directional estimate, assuming your industry receives the full 10 bps:
| Annual U.S. Credit Card Volume | Estimated Annual Savings |
|---|---|
| $100 Million | $100,000 |
| $500 Million | $500,000 |
| $1 Billion | $1 Million |
| $5 Billion | $5 Million |
| $10 Billion | $10 Million |
Actual savings will likely differ for two reasons.
The 10 bps is a weighted average, not a flat reduction. Visa may decide to reduce rates for Grocery and Fuel by 20 bps and Telcos by only 5 bps, while Mastercard may do the opposite or pick a different allocation altogether. Neither network has published detailed guidance on how the reduction will be allocated across industries, merchant categories, or card products. Use the table above as a directional guide only.
The 1.25% cap applies to a smaller proportion of issued cards. The settlement caps standard consumer credit cards (Visa Traditional and Traditional Rewards, and Mastercard Core and Enhanced Value) at 1.25% for eight years. Only 10–15% of U.S. credit cards fall in these categories, and some industries are already paying below the cap. Mastercard Telco rates, for example, are already 115 bps + 5 cents.
Bottom line: The biggest opportunity may not be the rate reduction. For many merchants, the new flexibility around surcharging, selective card and wallet acceptance, and merchant buying groups will produce more value than the 10-bps reduction itself.
When Will the Visa Mastercard Settlement Interchange Reduction Take Effect?
Final court approval is still pending — budget for April 2027 until the networks publish implementation guidance
There is no claim form, no monetary payment to class members, and no action required to receive the interchange reduction. If you are eligible, the savings flow through automatically once the networks implement the changes.
The 10-basis point interchange reduction will coincide with Visa and Mastercard's regular semi-annual interchange update cycles, which occur each April and October. That said, final court approval is still pending, and appeals or other procedural steps could push the timeline out further.
2027
How Is the 10-Basis-Point Interchange Reduction Measured?
The baseline period ends March 31, 2025 — but methodology details are still pending final approval
Per the initial settlement agreed upon in November 2025, the 10-bps reduction will be measured against the 12-month period ending March 31, 2025, as calculated by an independent third-party auditor. Posted rates for commercial, premium, and standard consumer credit cards cannot exceed those March 2025 levels for five years.
However, the settlement is still pending appeal, and it remains unclear whether the final agreement will officially use March 2025 as the baseline. If it does, this would exclude Visa's newer heightened CEDP commercial rates from being factored into the reduction calculation.
Note: The March 2025 baseline is based on currently published settlement terms. Final methodology and audit procedures may evolve. Optimized Payments will continue to monitor for updates.What Can Merchants Do Now to Benefit from the Visa Mastercard Credit Card Settlement?
Surcharging, selective card acceptance, and merchant buying groups may create more long-term value than the rate reduction
The interchange reduction is the most discussed provision, but the long-term value of the settlement may come from three new capabilities that most merchants have never had.
1. Product-Level Surcharging
Surcharging used to be a blunt tool — merchants could either surcharge an entire brand (for example, all Visa credit) or not at all. The settlement changes that. Merchants may now surcharge at either the brand level or the product level (but not both for the same network). A merchant could choose to surcharge only Visa Infinite and Visa Signature cards while accepting standard Visa credit cards without any surcharge.
The Rules
- Maximum surcharge: 3% of the transaction or the card's cost of acceptance, whichever is lower.
- 30 days' advance written notice to your acquirer is required before surcharging begins.
- Clear customer disclosure is required at the point of interaction or sale, and the surcharge amount must appear on the receipt.
- State-level surcharging restrictions still apply. The settlement does not preempt them.
What This Means
Premium consumer cards make up approximately 85% of overall Visa/Mastercard consumer credit volume and carry the highest interchange rates. Product-level surcharging gives merchants a precise cost-recovery tool without disrupting acceptance for lower-cost standard cards.
2. Selective Card and Wallet Acceptance
The settlement weakens the long-standing Honor All Cards rule, giving merchants the ability to choose whether to accept any combination of commercial credit cards, premium consumer credit cards, standard consumer credit cards, or specific digital wallets.
The Rules
- 30 days' advance written notice to your acquirer is required, identifying the product category being declined.
- No retaliation. Visa and Mastercard cannot penalize merchants with higher default interchange rates for declining a specific category.
- Visual identifiers. Within 90 days of settlement approval, both networks must add clear visual identifiers to newly issued commercial and premium consumer cards.
What This Means
This is the first time merchants have had the ability to make truly category-level acceptance decisions without risking their entire Visa or Mastercard relationship. For many merchants, the practical play is using selective acceptance as leverage in negotiations rather than as a permanent policy.
3. Merchant Buying Groups
Visa and Mastercard must remove restrictions on merchants' rights to form not-for-profit buying groups for the express purpose of negotiating directly with the networks. Buying groups can negotiate interchange rates, rate categories, network rules and fees, and other operational matters affecting merchants.
What This Means
Until now, only a handful of the largest national retailers have had real negotiating leverage with Visa or Mastercard. Trade associations, franchise systems, and merchant consortiums may now be able to aggregate volume in ways that produce meaningful concessions. Merchants who organize early are likely to benefit most.
Visa Mastercard Settlement Action Plan for Merchants
Five steps to capture the interchange savings and new acceptance rights before April 2027
| Action | Why It Matters |
|---|---|
| Quantify your eligible U.S. credit card volume | Scope determines the size of the prize. Debit, prepaid, and foreign cards are excluded. |
| Understand your card mix | Premium consumer and commercial card exposure determines surcharging and selective acceptance opportunity. |
| Evaluate product-level surcharging | May produce more value than the rate reduction for merchants where surcharging is operationally viable. |
| Consider selective card and wallet acceptance | Use as negotiating leverage or a permanent cost-recovery strategy depending on your customer mix. |
| Monitor merchant buying group developments | Industries with strong trade infrastructure — grocery, restaurants, hospitality, healthcare — are most likely to move first. |
How Optimized Payments Can Help
Determining the actual impact of the settlement on your business requires a detailed understanding of your card mix, interchange costs, and payment acceptance strategy. Optimized Payments can help you:
- Quantify the expected savings from the 10-basis point interchange reduction across your actual transaction data
- Analyze your premium consumer and commercial card exposure to size the surcharging and selective acceptance opportunity
- Evaluate product-level surcharging and selective card acceptance strategies for your specific volume mix
- Identify additional cost-saving initiatives beyond the settlement itself
Whether you process $100 million or $10 billion in annual credit card volume, our team can help you understand what the settlement is worth to your organization and develop a practical roadmap to maximize the benefits.
Find out what the settlement is worth to your business
Harmonize can quantify your eligible credit card volume, break out your premium consumer and commercial card exposure, and model the interchange impact across your actual transaction data.
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