Visa and Mastercard’s $38 Billion Merchant Settlement Gets Preliminary Approval in New York

A U.S. District Judge in New York has given preliminary approval to the latest Visa and Mastercard merchant settlement, raising the value to $38 billion after a previous $30 billion version stalled. For PSPs and merchants, the part to watch is not just the money: the deal also touches interchange fees and the long-running “Honor All Cards” rule.

1. The settlement applies to over 12 million merchants, and the judge said it was “fair, reasonable, and adequate.” The earlier attempt collapsed two years ago after the court said the proposed $30 billion deal did not go far enough to compensate merchants for credit card transaction fees.
2. Under the new agreement, Visa and Mastercard would lower interchange fees by 0.1 percentage points for five years. The Merchants Payments Coalition said the average swipe fee was 2.36% last year, and total fees increased year over year.
3. The deal would also let merchants choose whether to accept certain types of cards. That is a direct change to the old “Honor All Cards” setup, where a merchant generally had to accept all cards in a network or none at all, including higher-fee rewards cards alongside standard cards.
4. Visa and Mastercard have backed the settlement, but merchant pushback is already there. After the proposal was floated in November, a Walmart-led group said it still did not do enough to compensate merchants.
5. There is a catch for operations: selective acceptance may look like relief on paper, but it can also create fragmented payment policies at checkout. Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, said a store saying, “We accept some Visa cards, here’s a list of Visa cards we do and do not accept,” would be “ridiculous.”

For high-risk payment stacks, the practical question is whether card network rule changes like this reduce costs without creating a mess at the point of sale. If a merchant starts filtering card types, the risk is not just customer friction; it is also added complexity for routing, acceptance logic, and support.