On June 9, 2026, U.S. District Judge Brian Cogan granted preliminary approval to a $38 billion Visa and Mastercard swipe fee settlement covering more than 12 million U.S. merchants. The deal cuts interchange rates, loosens the networks’ card-acceptance rules, and expands merchants’ ability to surcharge or steer customers toward cheaper payment methods. It replaces a $30 billion proposal that a different judge rejected in June 2024.1Reuters. US Judge OKs Visa Mastercard $38 Billion Swipe Fee Settlement
Judge Cogan, sitting in the Eastern District of New York, called the revised agreement “fair, reasonable, and adequate” and said he is “likely to eventually grant final approval.” The case, which centers on the interchange fees Visa and Mastercard charge every time a customer pays with a credit card, dates to 2005. Total swipe fees across the two networks reached $118.8 billion in 2025.2Journal Record. US Judge Approves Visa Mastercard $38 Billion Settlement
What the Settlement Changes for Merchants
Three concrete changes matter most.
Rates go down. Visa and Mastercard will cut interchange fees by 0.1 percentage point (10 basis points) for five years, and standard consumer card rates will be capped at 1.25% for eight years.1Reuters. US Judge OKs Visa Mastercard $38 Billion Swipe Fee Settlement
“Honor all cards” is loosened. Under the old rules, a merchant that accepted any Visa card had to accept every Visa card. The settlement lets merchants pick among categories, so a store could accept standard consumer cards but turn away premium rewards cards or commercial cards.3Payments Dive. Court Approves Visa Mastercard Settlement
Surcharges and discounts get easier. Merchants gain expanded rights to add surcharges on higher-cost cards or offer discounts to steer customers toward cheaper payment methods.3Payments Dive. Court Approves Visa Mastercard Settlement
Plaintiffs’ experts estimated the deal could save merchants $38 billion by 2031 and deliver $224 billion in total benefits over the life of the agreement.2Journal Record. US Judge Approves Visa Mastercard $38 Billion Settlement
Why Major Retailers Are Objecting
The National Retail Federation, the Merchants Payments Coalition, the National Association of Convenience Stores (NACS), and Walmart all opposed the deal, arguing it fails to fix what they call a broken credit card market. The Retail Industry Leaders Association filed preliminary objections in December 2025, calling the relief “illusory.”4RILA. Retailers Object to Credit Card Settlement
A central complaint: the settlement still requires merchants to “honor all issuers” within a network, so a shop that accepts Visa can’t pick and choose between banks issuing those cards. Judge Cogan acknowledged the limitation and noted that objectors want to reject or surcharge cards at the issuer level. He conceded that many of the objections “had merit” but concluded the settlement represents the “best possible recovery in light of what can be gained and lost through trial.”1Reuters. US Judge OKs Visa Mastercard $38 Billion Swipe Fee Settlement
Opposition continues. On June 10, 2026, RILA General Counsel Monica Welt said the group “intends to continue to advocate on behalf of retailers to obtain a different resolution” and looks forward to “presenting our arguments at the next stage in this litigation.”5RILA. RILA Disappointed With Preliminary Approval of Visa and Mastercard Swipe Fee Settlement NACS General Counsel Doug Kantor predicted “many more objections” and said the group plans to appeal to the Second Circuit if the court grants final approval.3Payments Dive. Court Approves Visa Mastercard Settlement
What Happens Next
Preliminary approval opens a notice-and-comment period during which the roughly 12 million merchants in the class can file objections or opt out. Judge Cogan will then decide whether to grant final approval. The date for that hearing has not been set. If the settlement survives final approval and the expected Second Circuit appeal, it would close out litigation that began in mid-2005.3Payments Dive. Court Approves Visa Mastercard Settlement
This Is Not the $5.54 Billion Damages Fund
The $38 billion deal deals with fee rules and future practices. It is separate from an earlier $5.54 billion damages fund that resolved a related piece of the same litigation and covers merchants who accepted Visa or Mastercard between January 1, 2004, and January 25, 2019. That fund received final approval from Judge Margo K. Brodie in December 2019 and was upheld by the Second Circuit in March 2023.6Payment Card Settlement. Payment Card Interchange Fee Settlement7Robbins Geller Rudman & Dowd. In Re Payment Card Interchange Fee
The claims deadline for that older fund passed on February 4, 2025. The court approved an initial partial distribution on October 30, 2025, and payments began going out in February 2026 on a rolling basis. Nearly $5 billion remained in the fund after that first round. Each merchant’s share is calculated as a percentage of its actual or estimated interchange fees during the class period, and claims under $5.00 are excluded. Additional distributions are expected once remaining legal issues and final claim reviews are completed.8Payment Card Settlement FAQ. Payment Card Interchange Fee Settlement FAQ