Swipe fees are charges imposed by credit card companies like Visa and Mastercard on merchants for processing credit card payments.

What is the value of the settlement between Visa, Mastercard, and retailers?

The revised settlement is valued at $38 billion.

Has the settlement received final approval?

No, only preliminary approval has been granted; it still requires final court approval.

How will the settlement affect Visa and Mastercard stocks?

The settlement may have a short-term impact on earnings due to the large payment, but it could remove legal uncertainty.

Visa and Mastercard Get Preliminary Approval for $38B Swipe Fee Settlement

US District Judge Brian Cogan granted preliminary approval to a revised $38 billion settlement involving Visa (V), Mastercard (MA), and retailers in a long-running lawsuit over swipe fees.

Preliminary Approval for Visa and Mastercard Settlement with Retailers

According to reports, US District Judge Brian Cogan of the Eastern District of New York has granted preliminary approval to a revised $38 billion settlement between Visa (V), Mastercard (MA), and retailers in the long-running litigation over swipe fees.

Details of the Action

The revised settlement comes after a previous judge rejected an earlier agreement between the parties. The settlement aims to end class-action lawsuits filed by retailers who accused Visa and Mastercard of illegally fixing swipe fees. The total value of the settlement is $38 billion, but detailed distribution terms have not yet been disclosed.

Company Position

Visa and Mastercard have not yet issued an official comment on the preliminary approval. However, both companies are expected to welcome the settlement to avoid continued litigation and legal costs.

Precedents and Context

The lawsuit was first filed over a decade ago and concerns interchange fees charged by credit card companies to merchants for processing payments. Visa and Mastercard have faced repeated criticism from merchants over the high level of these fees.

Potential Financial Impact

If final approval is granted, Visa and Mastercard will be required to pay $38 billion, which could impact their short-term earnings. However, the settlement may remove legal uncertainty and allow both companies to focus on their core businesses.