After nearly 20 years of litigation, Visa (NYSE:V) announced today that it has agreed to a landmark settlement with U.S. merchants, lowering credit interchange rates and capping those rates through 2030.
The settlement also provides updates to several key network rules giving merchants more choice in how they accept digital payments.
The multi-year benefits of the agreement for businesses include:
- Lower exchange rates. The settlement will lower credit swap rates for U.S. merchants, which are mostly small businesses.
- Exchange rates will not rise. The agreement will cap reduced credit swap rates for five years, providing an unprecedented level of cost certainty that merchants have long sought.
- New ways of managing costs. The arrangement gives merchants more flexibility at the point of sale, including the opportunity to direct to preferred payment methods and more optionality around the surcharge. It also provides funding for new programs to educate small businesses about payment acceptance options and how to better manage costs.
“By negotiating directly with merchants, we reached a settlement with meaningful concessions that address real pain points that small businesses have identified,” said Kim Lawrence, President, North America, Visa. “It’s important that we make these concessions while maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”
Today’s settlement agreement with merchants resolves claims against Visa, Mastercard and other defendants brought by the injunctive class action in the In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. Subject to court approval.