Judge Preliminarily Approves Visa, Mastercard $38B Swipe Fee Settlement

A U.S. federal judge has preliminarily approved a $38 billion settlement between Visa (V) and Mastercard (MA) and a group of merchants over swipe fees. U.S. District Judge Brian Cogan called the revised accord "fair, reasonable, and adequate," though major retail groups plan further challenges.

Details of the Action

The proposed settlement covers a class-action lawsuit filed by merchants accusing Visa and Mastercard of illegally fixing interchange fees. Judge Cogan granted preliminary approval after reviewing the revised agreement, which includes fee reductions and increased transparency. The legal process is expected to take several months before final approval.

Company Position

Visa and Mastercard welcomed the preliminary approval, viewing it as a positive step toward resolving the dispute. However, they did not comment on potential appeals by merchants.

Precedents and Context

This case is part of a long-running dispute between credit card companies and merchants over interchange fees paid by stores for each transaction. In 2018, a previous $6.2 billion settlement was rejected by the same court as insufficient.

Potential Financial Impact

If finally approved, the settlement would be one of the largest in U.S. antitrust history. It could lead to changes in the interchange fee structure, affecting Visa and Mastercard's revenues in the long term. In the near term, however, the agreement removes some legal uncertainty.