TLDR Tech / Crypto
Visa and Mastercard Settle 20-Year Swipe Fee Lawsuit for $38 Billion
A Brooklyn federal judge gave preliminary approval to a $38 billion settlement between Visa, Mastercard, and roughly 12 million merchants, resolving a swipe-fee dispute that began in 2005. Under the deal, the networks will cut interchange fees by 0.1 percentage point for five years and cap standard consumer rates at 1.25% for eight years. The more structurally significant change is that "Honor All Cards", the rule requiring merchants to accept every card tier from a network at the same rate, has been weakened. Merchants can now refuse entire tiers (commercial, premium consumer, standard consumer), though not individual issuers within a tier. Granted, since nearly 90% of credit card spend runs through rewards cards, no merchant will actually turn away their best customers.
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