Visa and Mastercard have reportedly reached a USD 199.5 million settlement to resolve a class action over imposing fraud-related costs on merchants.
Following this announcement, both companies will pay a combined USD 199.5 million in order to settle a nearly decade-old class action that accused them of forcing merchants and businesses to swallow some of the costs of fraudulent transactions involving counterfeit, lost, or stolen cards.
According to Reuters, a proposed settlement was filed on the 10th of October 2025, in the federal court in Brooklyn, and currently it requires approval from the Chief U.S. District Judge.
More information on Visa and Mastercard’s settlement to resolve the merchant lawsuit
Merchants first sued the payment networks back in 2016, when several businesses were alleging they violated antitrust law by moving in lockstep in order to change rules on chargebacks, which are reversed payments triggered by customer disputes. The shift exposed businesses to greater costs without any reduction in transaction fees. With this in mind, under the new framework, merchants became liable for chargebacks if they had not upgraded point-of-sale systems to accept chip-enabled cards.
According to the settlement, Visa mentioned that it will pay USD 119.7 million, and Mastercard will pay USD 79.8 million. Two other defendants, Discover and American Express, also agreed to pay a combined USD 32.2 million in order to resolve the merchants’ claims against them. At the same time, all four companies denied any wrongdoing in agreeing to settle the class action.
In a statement, Mastercard mentioned that it welcomed the resolution and emphasised its overall efforts to promote the adoption of advanced technology to protect its purchases at every step. In addition, Visa and attorneys for the merchants did not immediately respond to requests for comment.
In a court filing, plaintiffs’ lawyers said the settlement represents about 13% of the plaintiffs’ best-case damages estimate, as well as more than 50% of a conservative benchmark provided by Visa and Mastercard’s experts. Furthermore, the proposed accord is separate from the USD 5 billion that Visa and Mastercard agreed to pay in 2019 to resolve merchant claims that they improperly fixed credit and debit card fees.
