Visa and Mastercard to Slash Fees by $30 Billion
Visa and Mastercard announced today that they have reached an agreement to settle e long lasting lawsuit. The two companies will lower and limit credit card interchange rates as part of the settlement with U.S. merchants. The settlement comes after almost two decades of litigation.
US Merchants are estimated to save $30 billion over five years on swipe fees they pay when customers make purchases using their Visa or Mastercard.
Under the settlement announced today, Visa and Mastercard will reduce interchange rates by four basis points (0.04 percentage points) in the United States for three years, and maintain the swipe fee rates that existed as of December 31, 2023 for five years.
Typically swipe fees cost merchants 2% of the total transaction a customer makes but can go as high as 4% for some premium rewards cards.
Both credit card networks have also agreed to remove anti-steering provisions. That means that merchants will have more discretion to offer discounts, or impose surcharges on cards with higher interchange fees.
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