Visa and MasterCard reached an estimated $30 billion settlement to limit credit and debit card fees for merchants, with some savings expected to be passed on to consumers through lower prices.
The antitrust settlement announced on Tuesday is one of the largest in US history.
And if approved by the court, it will resolve the majority of claims in the nationwide litigation that began in 2005.
Merchants have long accused Visa and MasterCard of charging inflated swipe fees, or interchange fees, when customers used credit or debit cards, and of preventing them from directing customers to cheaper payment methods via “anti-steering” rules.
Swipe fees typically consist of small fixed fees plus a percentage of total sale amounts, with an average of 1.5% to 3.5% per transaction.
Under the settlement, Visa and Mastercard would reduce swipe rates by at least four basis points (0.04%) for three years and maintain an average rate seven basis points lower than the current average for five years.
Both card networks agreed to limit rates for five years and eliminate anti-steering provisions.
Merchants will have greater freedom to offer discounts or impose surcharges on cards with higher interchange fees.
Many stores already warn customers at the checkout that using credit cards instead of cash will cost more.
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