A US judge has granted preliminary approval to a revised $38 billion settlement between Visa, Mastercard and more than 12 million merchants, provisionally ending two decades of litigation over credit card processing fees.

US District Judge Brian Cogan, sitting in Brooklyn, described the agreement as "fair, reasonable, and adequate" and indicated he was likely to grant final approval. The ruling came nearly two years after a separate judge rejected an earlier $30 billion proposal as insufficient.

The settlement, announced in November, covers interchange fees – commonly called swipe fees – that totalled $118.8 billion across Visa and Mastercard in the United States in 2025, up from $25.6 billion in 2009, according to the Merchants Payments Coalition. Under the revised terms, swipe fees would fall by 0.1 percentage points for five years, with standard consumer rates capped at no more than 1.25 per cent for eight years.

Merchants also gained the ability to choose whether to accept cards in distinct categories – commercial, premium consumer and standard – effectively dismantling the longstanding "Honor All Cards" rule, which had required merchants to accept all Visa and Mastercard cards or none.

Cogan acknowledged objections from retailers but said the settlement did not need to be perfect. "The question is not whether the amended settlement constitutes the best possible recovery, end stop – it's whether the amended settlement constitutes the best possible recovery in light of what can be gained and lost through trial," he said.

The National Retail Federation and the National Association of Convenience Stores said in separate statements that the deal failed to address what they called a "broken" credit card market. NACS general counsel Doug Kantor predicted "many more objections" would follow, with critics arguing merchants would still pay excessive rates on rewards cards and remain unable to reject individual card issuers within a network. Walmart and the Merchants Payments Coalition also objected but declined to comment.

Richard Hunt, executive chairman of the Electronic Payments Coalition, whose members include Bank of America, Capital One, Chase and Citibank, said the agreement was "a guaranteed win for Main Street," adding that opponents were seeking "untested, unworkable mandates that only further pad their profits."

Two experts engaged by the plaintiffs, Nobel Prize-winning economist Joseph Stiglitz and University of Washington professor Keith Leffler, estimated the changes could save merchants $38 billion by 2031 and deliver $224 billion in total benefits, including to consumers. Visa described the settlement as giving merchants greater flexibility in accepting payments, while Mastercard said it "balances the interests of all parties."

---