Visa, Mastercard announce settlement with US merchants

As per the information detailed in the press release, the deal is set to decrease and cap the fees charged by Visa and Mastercard, enabling small and medium-sized enterprises (SMEs) to collectively bargain for rates with the payment processor similarly to how large merchants do on their own.

US-based Visa and Mastercard have announced their legal settlement with US merchants, aiming to minimise and cap their credit card interchange rates.

Visa and Mastercard’s deal capabilities

As stated by Mastercard, the settlement, which also includes a set of adjustments to the company’s network rules, is set to enable SMEs and merchants to continue to benefit from accepting electronic payments while also offering consumers a simplified and secure manner of payment. The deal, agreed by both Mastercard and Visa, as well as the court-appointed class counsel, aims to provide merchants with clarity on multiple areas related to their acceptance of payment cards, including:

Interchange rate minimisation, with payment networks decreasing the published and effective rate on S-issued consumer credit and commercial credit transactions at US merchant locations;
Five-year rate cap, with the agreement applying to all US-issued credit programs, including new products required to be accepted under the Mastercard brand. Through this, it aims to deliver merchants the certainty and visibility of their acceptance programs while assisting continued competition within the industry;
Improved methods to manage costs with simplified surcharging and discounting rules, while maintaining core consumer protections and transparency, replacing standards that were updated in 2012.

According to Mastercard’s officials, the agreement aims to deliver substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs. During the review process conducted by the court, the company is set to focus on continuing to offer consumers, SMEs, and all business owners its product suite and an improved experience. Representatives from Visa underlined that by negotiating directly with merchants, the company reached an agreement that can address the difficulties faced by small businesses. Visa aims to make these concessions while also maintaining the safety, security, protection, and access to credit to US consumers.

Furthermore, the settlement is subject to final approval by the Eastern District Court of New York and, upon final consent of the class settlement by the court, Mastercard intends to have resolved the majority of all pending US merchant litigations that request modifications to the company’s interchange structure and acceptance rules. The current agreement with merchants resolves claims against Visa, Mastercard, and other defendants brought by the injunctive relief class in the lawsuit entitled ‘In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation’.

Visa, Mastercard announce US merchant settlement

Visa and Mastercard’s deal capabilities