Court grants preliminary approval to interchange lawsuit settlement

A district court judge granted preliminary approval Tuesday to a revised $38 million settlement between Visa, Mastercard, and merchants over credit card processing costs. The credit card companies negotiated the settlement to address the interchange fee issue as an industry compromise to counter attempted government mandates, including the Credit Card Competition Act.

First proposed in November 2025, the settlement:

• Would break credit cards into three groups: commercial, premium consumer (with rewards), and standard consumer;
• Caps posted U.S. credit interchange rates at 1.25%;
• Gives merchants more options to surcharge, including if they do not surcharge other credit networks;
• Allows merchants to choose whether to accept U.S. credit cards in the three distinct categories—commercial, premium consumer and standard consumer;
• Provides for a reduction of the U.S. combined average effective credit interchange rate by 10 bps for five years;
• Make available a new merchant education program about payment acceptance and cost management.

A previous settlement in the lawsuit was rejected in June 2024.