Visa Int’l Base II Settlement and Interchange Fee Litigation

The Visa and Mastercard interchange fee settlement is actually two settlements that grew out of the same antitrust case: a $5.54 billion cash fund now being distributed to merchants who accepted the cards between January 1, 2004, and January 25, 2019, and a separate rules-and-rates deal, preliminarily approved on June 9, 2026, that would cut credit interchange rates and expand merchants’ ability to surcharge. Both come out of In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, a case consolidated in the Eastern District of New York in 2006 and involving more than 12 million merchants.¹

Who Is Covered by the Cash Settlement

The damages class includes every merchant in the United States that accepted Visa or Mastercard credit or debit cards from January 1, 2004, through January 25, 2019. Payment facilitators such as PayPal are not in the class, though the merchants who sold through them are.²

Claim forms went out to roughly 18.6 million merchants, and the deadline to file was February 4, 2025. Epiq is the claims administrator.³ If you missed the filing deadline, you are not eligible for a payment from this fund.

Each merchant’s payment is a pro rata share of the fund based on the Visa interchange fees that merchant paid compared with total fees paid by everyone participating. Claims estimated at less than $5.00 are excluded from payment.⁴

The fund started at approximately $5.54 billion, then was reduced by roughly $700 million to account for merchants who opted out of the class.¹ Chief Judge Margo Brodie granted final approval on December 13, 2019, and approved attorneys’ fees of about $523 million, or 9.31% of the fund. Robbins Geller Rudman & Dowd LLP served as lead counsel.⁵ The Second Circuit affirmed the settlement on March 15, 2023, upholding the fee award but ordering the district court to trim lead-plaintiff service awards to remove time spent on lobbying that would not benefit the class.

Where Payments Stand Now

The court approved an initial partial distribution on October 30, 2025, and checks began going out in February 2026. As of mid-2026, about $414 million has been paid to roughly 598,000 merchants.³

A second round of at least $182 million has been proposed for about 84,000 additional claimants. That group breaks into two categories: roughly 75,000 merchants whose claims were initially held because of name mismatches in the underlying data (about $125 million), and about 8,400 merchants with questions on their tax identification numbers (about $56.2 million).³

Nearly $5 billion of the fund is still undistributed. About $3.35 billion of that is being held in reserve pending the outcome of appeals brought by subsets of the class. Retired Magistrate Judge James Orenstein has been reappointed as special master, and more than 500,000 merchant claims remain in the dispute process.³ If your claim is caught in one of those categories, payment depends on how those disputes and appeals resolve.

The Separate Rules Settlement

The cash fund only compensates for past overcharges. A second track of the litigation, filed under Barry’s Cut Rate Stores, Inc. v. Visa, Inc., seeks to change how Visa and Mastercard operate going forward. Two proposals in this track were rejected. A March 2024 deal, valued at roughly $30 billion over five years with a seven basis point rate cut, was turned down by Judge Brodie in June 2024 for failing to treat large and small merchants equitably on surcharging.⁶

A revised proposal announced November 10, 2025, is now before U.S. District Judge Brian Cogan, who granted preliminary approval on June 9, 2026. In his order, Cogan wrote that the amended agreement “provides more extensive relief” than the rejected version and that none of the objectors had persuaded the court they could obtain more through trial.⁷ Final approval is expected in late 2026 or early 2027.⁶

The revised deal is valued at approximately $38 billion through 2031. Its main terms:⁸⁹

A 10 basis point reduction in the combined average effective credit interchange rate for five years.
All posted credit interchange rates frozen at March 31, 2025 levels for five years, with standard consumer credit card rates capped at 1.25% for eight years.
A rewritten honor-all-cards rule. Credit cards are split into three tiers: standard consumer, premium consumer, and commercial. Merchants may decline an entire tier but must accept every card within any tier they do accept.
Surcharging up to 3%, at the brand level or product level, regardless of whether the merchant also accepts American Express. The previous 1% cap for Amex-accepting merchants is gone.
A $21 million merchant education program on the new rules.

The Electronic Payments Coalition, which represents major issuing banks including Bank of America, Capital One, Chase, and Citibank, supports the deal alongside Visa and Mastercard.⁹

Why Major Retailers Are Fighting It

The National Retail Federation, the National Association of Convenience Stores, the National Grocers Association, and Walmart have all objected. Their argument is that the honor-all-cards changes are largely illusory: an estimated 85% of cards fall into the premium and commercial tiers that most merchants would not risk declining, and rate reductions are offset by base fee increases since 2024.⁹

In December 2025, Walmart and several trade associations filed a motion asking Judge Cogan to split the plaintiff class. Walmart argues that the five small businesses serving as class representatives, including a hair salon, a pharmacy, and a dentist, cannot adequately represent large national retailers with fundamentally different bargaining needs. Walmart wants the ability to negotiate interchange rates directly with issuing banks rather than only through the card networks. The motion asks the court either to decertify the class, carve out large merchants, or provide an opt-out from the mandatory class. That motion is still pending.¹⁰

Why There Are Two Settlements

The split between damages and injunctive relief exists because of a 2016 Second Circuit ruling. The parties first reached a global settlement in 2012, roughly $5.3 billion in damages plus rule changes going forward. On June 30, 2016, the appeals court threw it out for violating the Due Process Clause and Rule 23.¹

The problem was structural. Two groups of merchants with different interests, one focused on cash for past harm and one focused on future rule changes, shared the same lawyers and lead plaintiffs, which let counsel trade away the value of future relief for a bigger cash number. The injunctive relief class was also mandatory, meaning merchants stuck in states where surcharging was illegal, merchants bound by American Express no-surcharge contracts, and businesses that did not yet exist all had their claims released without being able to opt out. Concurring Judge Leval wrote: “This is not a settlement; it is a confiscation.”¹¹ After that ruling, the district court appointed independent counsel for the injunctive relief class and the two tracks were negotiated separately. That is why merchants today deal with one settlement that pays money for the past and a second, still unfinalized settlement that changes rules for the future.

The underlying claims, in both tracks, focused on two sets of network rules. Honor-all-cards required a merchant that accepted any Visa or Mastercard credit card to accept every credit card in that brand, regardless of the fee attached. Anti-steering rules, including no-surcharge and no-discount provisions, blocked merchants from encouraging customers to use cheaper payment methods or charging different prices based on how a customer paid. Plaintiffs argued those rules, together with the networks’ centralized fee-setting, kept interchange fees artificially high in violation of the Sherman Act and California’s Cartwright Act.¹

What Could Still Change the Picture

Even if Judge Cogan grants final approval, the rules settlement is a five- to eight-year fix on rate levels, not a structural change to how interchange is set. Major merchant groups including the National Federation of Independent Business argue that no court settlement can fully solve the problem while Visa and Mastercard retain centralized control over rates.¹²

Their preferred fix is the Credit Card Competition Act, modeled on the 2010 Durbin Amendment for debit cards. The CCCA would require card issuers with more than $100 billion in assets to enable at least two unaffiliated payment networks on each credit card, letting merchants route transactions over whichever network is cheaper. The bill was reintroduced in both chambers on January 13, 2026, with bipartisan sponsorship from Senators Durbin and Marshall and Representatives Lofgren and Gooden, and has been endorsed by President Trump. An attempt to attach it to the Digital Commodity Intermediaries Act failed in late January 2026, and sponsors are looking for another vehicle.¹³ If it passes, it would go beyond anything either settlement provides.

1
Justia. In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, No. 20-339
2
MGM Law. Visa Mastercard Settlement
3
Payments Dive. Visa Mastercard Swipe Fee Fund Has Paid $414M
4
Payment Card Settlement. Frequently Asked Questions
5
Robbins Geller Rudman & Dowd LLP. Court Approval of Record-Setting $5 Billion Settlement
6
Payments Dive. Visa Mastercard Reach Legal Pact With Merchants
7
Payments Dive. Court Approves Visa Mastercard Settlement
8
U.S. Securities and Exchange Commission. Visa Inc. Form 8-K, November 2025
9
American Bar Association. In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation
10
Yahoo Finance. Walmart Wants Card Class Split
11
Quinn Emanuel Urquhart & Sullivan. Second Circuit Rejects Massive Class Action Settlement
12
NFIB. Credit Card Anti-Trust Settlement a Step in the Right Direction for Small Business
13
KTS Law. Credit Card Competition Act of 2026