A US federal court has given preliminary approval to a multibillion-dollar settlement in the long-running case over Visa and Mastercard “swipe fees”, but major retailers have reacted with concern, arguing that the agreement will do little to ease payment costs in the US card market.
The decision marks an important step in a legal dispute that has lasted for more than two decades and involves millions of merchants across the United States.
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The case centres on claims that card networks and issuing banks kept interchange fees artificially high, increasing costs for businesses that accept card payments.
Court moves settlement forward
The preliminary approval was issued by Judge Brian Cogan in the Eastern District of New York, allowing the proposed $38 billion settlement to proceed to the next stage of review.
The underlying lawsuit dates back to 2005 and alleges that Visa and Mastercard, together with banks, coordinated practices that kept “swipe fees” higher than they should have been, while limiting merchants’ ability to steer customers towards cheaper payment methods.
Under the proposed agreement, card fees would see modest reductions over several years, alongside temporary caps on certain rates. The deal would also change card acceptance rules, giving retailers more flexibility to refuse specific categories of credit cards rather than being required to accept all Visa and Mastercard products.
The judge described the settlement as “fair, reasonable, and adequate,” while noting that objections from some merchant groups remain unresolved.
Retailers question impact
The retail sector has responded cautiously, with industry groups arguing that the settlement does not address the structural issues driving high payment costs in the US.
The National Retail Federation (NRF), which represents major US retailers, has consistently argued that merchants face limited leverage in negotiations over interchange fees and continue to absorb significant transaction costs.
While the NRF’s detailed written response to the ruling stresses concern about the adequacy of the settlement, it argues that the changes are not sufficient to deliver meaningful long-term relief for retailers or consumers, who ultimately bear much of the cost through pricing.
Retailers also point to the continued lack of competition in setting interchange rates, saying the proposed framework leaves the core system largely unchanged.
Next stage of review
If the settlement is ultimately approved, it would rank among the largest antitrust resolutions in US history, affecting a wide range of businesses from small retailers to large chains across sectors such as grocery, hospitality, fuel, and e-commerce.
However, the deal is not yet final. The court must still consider objections and decide whether the agreement is sufficient or whether further litigation is required.
For retailers, the central issue remains whether the settlement will meaningfully reduce the cost of accepting card payments in a market where digital transactions dominate everyday commerce.
