Visa, Mastercard, and the banks that issue their credit cards have settled an antitrust case that was brought against them by merchants. It’s a big win for retailers and customers alike!
Here’s Five Fast Facts About The Swipe Fee Settlement:
- 💵 Insert Card - The suit was filed by retailers in 2005 (!!!), accusing the credit card giants of charging inflated swipe fees when shoppers use their credit or debit cards and blocking them from directing customers toward cheaper methods of payment.
- 💸 Swipe - The settlement is for an estimated $30B and limits fees for merchants. It’s one of the largest settlements in U.S. History.
- 🤑 Or Tap- Visa and Mastercard must lower their fees by at least 0.04% for at least three years. For five years, they can’t raise those fees above 2023 levels and average fees must be 0.07% lower than the current average rate.
- 🫰🏻 Total Savings - Merchants could save $29.79B in the five years after the settlement is approved.
- 🧾 Reduce Prices - Merchants are not required to lower their prices as a result of the settlement. Store owners have claimed for years that they had to increase prices to cover the fees.
🔥Bottom line: If you’re a retailer, particularly a small business, this is great news. Will merchants pass the savings on to you? I’ll answer that with another question: did big box stores lower their prices when they replaced human cashiers with self checkout kiosks? You know the answer.
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