Visa, Mastercard reach $30bn settlement over credit card fees

Merchants have long accused the payment network of charging inflated ‘swipe fees’ when shoppers use their cards.

Visa and Mastercard have reached an estimated $30bn antitrust settlement to limit credit and debit card fees for merchants in the United States, with some savings likely to be passed on to consumers through lower prices.

If it receives court approval, it would resolve most claims in nationwide litigation that began in 2005. However, some opponents believe it may not go far enough.

Merchants have long accused Visa and Mastercard of charging inflated swipe fees or interchange fees when shoppers use credit or debit cards and barring them, through “anti-steering” rules, from directing customers toward cheaper means of payment.

According to Bankrate.com, swipe fees typically include small fixed fees plus a percentage of total sale amounts and average about 1.5 percent to 3.5 percent per transaction.

Under the settlement, Visa and Mastercard would reduce swipe rates by at least four basis points (0.04 percentage points) for three years and ensure an average rate that is seven basis points below the current average for five years.