Interchange Fee Settlement Receives Preliminary Court Nod
On Tuesday, a federal judge signed off on a deal struck by Visa and Mastercard with merchants who brought suit against the card networks more than 20 years ago. The settlement is aimed at resolving claims that the networks and related parties unlawfully worked together to set the interchange fees merchants pay when customers use Visa or Mastercard credit and debit cards, and it is designed to provide relief primarily through payments to eligible merchants under a court-supervised claims process.
Impact on Merchant Class
In Brooklyn, Brian Cogan, a U.S. district judge, said the accord offers broader relief than a proposal the court rejected in June 2024 and granted preliminary approval. Approximately 12 million merchants in the class action would be covered, generally meaning businesses that accepted Visa or Mastercard during the period covered by the case as defined in the settlement and court-approved notices. Eligibility can also depend on settlement-specific rules, and some merchants may be excluded if they previously opted out or otherwise fall within defined exclusions, so merchants typically determine inclusion by reviewing the official notice and checking the settlement administrator’s merchant portal.
Cogan explained that the court’s task is not to decide whether the compromise satisfies every class member’s preferences, but to determine if it meets the standard for fairness and adequacy, which he concluded it does.
For merchants who qualify, how much any one business receives is not a fixed amount and is typically based on a formula tied to factors such as card transaction volume and the value of eligible interchange fees during the covered period, along with whether a valid claim is submitted and how many total claims are approved. Individual payment estimates are generally not final until the administrator processes claims and the settlement becomes effective under the court’s schedule.
For small business owners, the settlement may offer a way to recover some portion of past card-acceptance costs if they are eligible and file on time, but it may also come with limitations: payment amounts can be modest for lower-volume sellers, participation usually requires completing a claim form, and the timing of any distribution depends on court approval and administrative processing.
Case History and Pushback
The interchange-fee accord is intended to conclude a 21-year legal fight over card interchange, backed by Visa and Mastercard as well as counsel for the plaintiff class; the dispute traces back to mid-2005 and stems from antitrust allegations. Interchange fees are per-transaction charges that flow through the card system when a customer pays with a card, and merchants typically experience them as part of the overall processing costs deducted from each sale. The lawsuit’s core contention is that rules and practices tied to Visa and Mastercard resulted in interchange fees being set and maintained in a way merchants say reduced competition and left them paying higher costs than they otherwise would.
Interchange fees can look like a small percentage on a receipt, but across thousands of transactions they become a meaningful operating cost that directly affects a merchant’s margins and pricing decisions.
- April 27 hearing.
- Objections from major retailers.
- Walmart attorney’s opposition.
Merchants seeking to file a claim generally must use the court-approved claim form and follow the instructions issued by the settlement administrator, including any deadlines and documentation requirements described in the official notice. The merchant portal is typically accessed through the official settlement website identified in that notice, where merchants can log in or look up their business and complete submission steps as directed.
Merchants who receive a settlement check or payment notice should verify legitimacy by matching the case name and administrator information to the details on the official settlement website listed in the court-approved notice, and by using contact information from that official source rather than any email, text, or postcard that seems unsolicited. It is also prudent to watch for scams that ask for bank credentials, login codes, or upfront fees to “release” funds, and to avoid sharing sensitive information unless the request is confirmed through the administrator channels disclosed in the official notice.