U.S. District Judge Brian Cogan in Brooklyn gave preliminary approval on November 6 to a revised interchange settlement between Visa, Mastercard, and more than 12 million merchants, putting a twenty-year swipe-fee case on a path toward final closure while major retailer groups promise a fresh round of court objections.
What changed in the deal
The agreement, disclosed in November after an earlier $30 billion proposal failed judicial scrutiny, covers the interchange or swipe fees merchants pay when customers dip, tap, or swipe. The Merchants Payments Coalition has said Visa and Mastercard collected a combined $118.8 billion in U.S. interchange in 2025, up from $25.6 billion in 2009, a climb that fueled grocer, convenience-store, and e-commerce complaints that rewards-rich premium cards silently raise acceptance costs.
Under the revised terms, swipe fees would fall by 0.10 percentage point for five years, and standard consumer rates would not exceed 1.25 percent for eight years, according to court filings summarized by trade press. Merchants also gained a break from the networks' historic Honor All Cards rule: they may now choose whether to accept commercial, premium consumer, or standard Visa and Mastercard products separately rather than taking the entire portfolio.
Why Cogan signed off — for now
Cogan called the pact fair, reasonable, and adequate, and signaled he is likely to grant final approval after a notice period for dissenting retailers. He told objectors the question is not whether the deal is perfect but whether it beats the risks of trial. Expert economists retained by the merchant class, including Joseph Stiglitz and Keith Leffler, estimated the fee tweaks could save merchants $38 billion by 2031, with broader consumer benefits modeled at $224 billion, figures issuers dispute as speculative pass-through.
Visa said the settlement offers merchants flexibility; Mastercard described it as balancing stakeholder interests. The Electronic Payments Coalition, whose members include Bank of America, Capital One, Chase, and Citibank, called the outcome a win for Main Street acceptance.
Who still hates it
The National Retail Federation and the National Association of Convenience Stores said in separate statements that the deal leaves a broken market intact. NACS general counsel Doug Kantor predicted additional objections, arguing merchants would still subsidize lavish rewards cards and could not reject individual issuers within a network even after the tiering change. Walmart and the Merchants Payments Coalition objected publicly while declining comment to reporters.
For households, the fight is indirect but real. When interchange stays high, small merchants often nudge shoppers toward debit or cash, bake fees into sticker prices, or tighten minimum purchase rules. A categorization option may help gas stations and quick-service restaurants steer customers away from ultra-premium products, but it does not guarantee checkout discounts.
What happens next
Merchants who accept Visa and Mastercard do not need to file claims immediately, but they should watch the objection window and any fairness hearing dates Cogan sets in the Eastern District of New York. Issuers will keep marketing rewards cards as usual while the legal tail runs; your annual-fee card terms are unchanged by this ruling.
If final approval survives retailer appeals, expect state attorney generals and congressional Democrats who campaigned on credit-card rate caps to argue the judicial fix did not replace legislative ceilings. For now, the most concrete change on paper is the 1.25 percent cap and the right to reject premium tiers — tools large chains will trial first, with independent stores watching whether processors actually code transactions cleanly enough to make selective acceptance workable at the register.