U.S. Judge Rejects $30 Billion Interchange Fee Settlement

A major settlement agreement involving Visa, Mastercard, and US merchants has hit a significant roadblock. US District Judge Margo Brodie has officially denied preliminary approval of the settlement, indicating her doubts about the fairness and adequacy of the proposed terms. This decision prolongs the two-decade-long legal battle between the credit card giants and merchants.


In March, Visa and Mastercard reached a settlement with several US merchants, primarily smaller businesses. The deal aimed to lower and cap credit card interchange rates, potentially saving these merchants $30 billion over five years. This settlement would have also allowed merchants to charge different prices based on the credit cards used by customers.

Settlement Details

The proposed settlement had several key components:

  • Reduced Interchange Fees: Lowering the fees merchants pay for credit card transactions.
  • Capped Rates: Keeping these reduced rates steady until 2030.
  • Differential Pricing: Allowing merchants to set different prices depending on the credit card used by the shopper.


Despite these provisions, several trade groups opposed the settlement. Their primary concerns were:

  • High Fees: The fees would still be too high, impacting merchants’ profitability.
  • Control Over Transactions: Visa and Mastercard would retain excessive control over how transactions are handled, limiting competition and innovation.

Christopher Jones, a member of the Merchant Payments Coalition executive committee, welcomed the judge’s decision, stating it recognized the settlement as unfavorable for Main Street merchants and their customers.

Visa and Mastercard’s Response

Mastercard expressed disappointment with the ruling. They believed the settlement offered a fair resolution by providing business owners with more flexibility in managing card acceptance. Mastercard indicated their intent to explore further options to resolve the dispute adequately.

Next Steps

Judge Brodie will issue a detailed written opinion after allowing the involved parties to propose redactions. The options now include negotiating a new settlement or proceeding to trial.


This decision underscores the complexity of resolving long-standing disputes between major financial institutions and the merchants who rely on their services. The prolonged litigation reflects the broader challenges within the payment processing industry, where fee structures and control dynamics are hotly contested.

Merchants, especially smaller ones, continue to seek fairer terms that reduce costs and enhance their ability to compete. Meanwhile, Visa and Mastercard aim to balance these demands with their business models and market strategies.

For now, the legal saga continues, and the involved parties will need to return to the negotiation table or prepare for trial. This ongoing dispute highlights the need for transparent, equitable solutions that serve both merchants and consumers in the ever-evolving landscape of payment processing.

This case will be closely watched by industry stakeholders, policymakers, and consumer advocates as it progresses. The outcome could set important precedents for future negotiations and regulations within the credit card industry.


What was the proposed settlement about?

It aimed to lower and cap credit card interchange fees for merchants.

Why did Judge Brodie deny the settlement?

She found it unlikely to be fair or adequate for final approval.

How much could merchants have saved with the settlement?

They could have saved $30 billion over five years.

What were merchants’ main concerns?

High fees and excessive control by Visa and Mastercard.

What are the next possible steps in the case?

Negotiating a new settlement or going to trial.

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