Visa, Mastercard reach $30B settlement in card fees case

Visa and Mastercard reached a historic settlement after ~20 years totaling $30 billion on Tuesday to reduce fees they typically charge merchants—potentially leading to lower prices for consumers.

The deal, applicable only to US merchants, stems from a 2005 case. Post announcement, shares of Visa and Mastercard experienced a slight rise.

Under the agreement, pending court approval, the two credit card behemoths have committed to reducing swipe rates by at least 0.04 percentage points for three years and capping rates for five years. The current swipe fee is around 2%.

While the settlement won’t alter cardholders’ rewards or access to credit, it could impact small banks and credit unions.

Some view the settlement as a step forward, while others believe it falls short of addressing long-standing issues in the credit card industry.