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What the Visa-Mastercard Swipe Fee Settlement Means for Cardholders

Visa and Mastercard have made a deal with U.S. merchants, which could affect consumers if it’s approved. The deal would reduce the fees that merchants pay to process credit card transactions and keep them lower for several years. It would also limit the extra charges that merchants can add for customers who pay with credit cards.

This deal is separate from a proposed law called the Credit Card Competition Act, which aims to lower these fees by increasing competition among credit card companies.

The court still needs to approve the deal. If it does, here’s what could happen:

How it Could Change Things:

  1. Lower Costs for Merchants: Visa and Mastercard would have to reduce their fees by at least a small amount for at least three years. This could save merchants nearly $30 billion in five years.
  2. Payment Options: The deal would limit the extra charges merchants can add for using credit cards. This might influence how you choose to pay for things, as merchants might offer lower fees for certain payment methods.
What the Visa-Mastercard Swipe Fee Settlement Means for Cardholders

Visa and Mastercard have made a deal which could affect consumers if it’s approved

What Won’t Change:

  1. Credit Card Access and Rewards: According to Visa, this deal won’t affect your ability to get a credit card or the rewards programs they offer.
  2. The Credit Card Competition Act: This deal isn’t connected to the proposed law. Some groups think this deal means the law isn’t necessary, but others say it doesn’t go far enough.

What Happens Next:

The court still needs to approve the deal, and changes won’t happen right away. If approved, the new rules could start in late 2024 or early 2025.

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