Visa Inc. (NYSE:V) and Mastercard Inc. (NYSE:MA) are reportedly close to settling with merchants that could reduce credit card fees and give retailers more flexibility in deciding which cards to accept.
Visa And Mastercard To Lower Interchange Fees For Merchants
The potential deal aims to resolve a 20-year-old legal dispute over interchange fees, the charges merchants pay to banks when customers use credit cards, and acceptance rules, reported The Wall Street Journal.
Under the proposed terms, interchange fees, which typically range from 2% to 2.5% per transaction, could be lowered by an average of about 0.1 percentage point over several years.
Merchants Could Refuse High-Fee Rewards Cards
Merchants would also gain the ability to reject certain types of cards, including premium rewards cards that cost them more.
"Merchants have long argued that the current system forces them to accept cards that cost more, particularly premium rewards cards," said one person familiar with the negotiations.
"This settlement would give them more control while slightly lowering the fees they pay."
The case dates back to 2005, when merchants sued the card networks and large banks, alleging anticompetitive behavior.
A previous attempt at settlement in 2024 was rejected by a judge, but discussions resumed earlier this year, including provisions for surcharging, where stores pass on card fees to customers.
Visa Posts Strong Q4 Growth While Mastercard Eyes $2Billion Crypto Acquisition
Last month, Visa reported robust fourth-quarter results, with U.S. payment volumes rising 7.6%, global volumes up 8.8%, and cross-border payments surging 12%.
Revenue reached $10.7 billion, exceeding estimates, and adjusted EPS grew 10% to $2.98.
JPMorgan Chase & Co. (NYSE:JPM) analyst Tien-Tsin Huang said the results reflected Visa's ongoing momentum, supported by stable margins and a rebound in commercial volumes, while Mastercard faced steeper year-over-year comparisons that could compress its growth.
At the same time, Mastercard was reported to be in advanced talks to acquire cryptocurrency startup Zerohash for $1.5 billion to $2 billion.
The acquisition, if completed, would mark one of Mastercard's largest investments in the stablecoin sector, providing infrastructure for financial institutions to integrate cryptocurrencies and stablecoins into their offerings.
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