US Merchants Set to Receive $30 Billion Reduction in Swipe Fees from Visa and Mastercard: What You Need to Know

Visa and Mastercard Reach $30 Billion Settlement to Reduce Merchant Fees

Merchants in the US are set to receive a $30 billion reduction in swipe fees paid when customers use Visa or Mastercard, following a settlement reached with the credit card networks and banks that issue them. The case has been ongoing for decades and involved various parties, including the credit card networks and banks. This agreement only applies to US merchants and must still be approved by the US District Court for the Eastern District of New York.

Swipe fees typically cost merchants around 2% of the total transaction, but for premium rewards cards, it can go up to 4%. The settlement would lower these fees by at least 0.04 percentage points for a minimum of three years. Visa and Mastercard have assured that the rewards received by cardholders will not be impacted by the settlement, and Americans’ access to credit will not be restricted as a result either.

In related news, Discover and Capital One have recently announced a merger that, upon approval by regulators and shareholders, will create the largest credit card company in the country. Following the announcement of the settlement, shares of Visa and Mastercard slightly increased. This story is still unfolding and will be updated as more information becomes available.

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