Visa and Mastercard Settlement on Swipe Fees

SOURCE npr.org
Visa and Mastercard settle with U.S. merchants on swipe fees, potentially saving consumers billions. The deal lowers and caps fees, allowing small businesses to collectively bargain for rates. However, industry groups believe more needs to be done for long-term relief.

Key Points

  • Swipe fees paid to credit card companies ultimately passed on to consumers
  • Visa and Mastercard to cap credit interchange fees until 2030
  • Settlement stems from a 2005 lawsuit alleging excessive fees and antitrust violations

Pros

  • Lowering and capping fees charged by Visa and Mastercard
  • Allowing small businesses to collectively bargain for rates
  • Potential savings of close to $30 billion in swipe fees

Cons

  • Short-term relief for small businesses as fees will return to current levels after 3-5 years
  • The settlement may not address the root issue of anti-competitive rate-setting practices