Visa and Mastercard have struck a deal with retailers that would lower fees for merchants, potentially lowering prices but threatening prized consumer rewards.
Retailers have long chafed at the fees credit card companies charge to merchants. Fees charged to retailers when customers swipe their cards have increased nearly 70% since the onset of the Covid-19 pandemic, according to the National Association of Convenience Stores, which cited data from Nilson.
The deal, which is still subject to court approval, could mean big changes for businesses and consumers. Merchants would be able to choose which categories of credit cards they accept under the terms of the deal. Visa and Mastercard, which have long dominated the American credit card market, would lower their interchange fees over 5 years.
“After more than 20 years of litigation, Visa and Mastercard have reached a proposed settlement with U.S. merchants of all sizes that would provide meaningful relief, more flexibility and options to control how they accept payments from their customers,” Visa told CNN.
Mastercard said that “smaller merchants will gain in this settlement – more acceptance choices, reduced costs and simplified rules.”
This is a developing story and will be updated.
