The decision marks a significant milestone in one of the largest antitrust cases ever brought against the card networks, with the proposed agreement promising lower interchange fees, greater flexibility for merchants, and potentially billions of dollars in savings over the coming years.
While business groups and some of the country's largest retailers remain opposed to the deal, the court indicated that the revised settlement offers meaningful improvements over previous proposals and may represent the most practical path toward ending the long-running dispute.
Judge Signals Support for Revised Agreement
U.S. District Judge Brian Cogan approved the settlement on a preliminary basis in a ruling issued in Brooklyn, New York, stating that the agreement appeared fair and reasonable.
Cogan indicated he is likely to grant final approval after additional proceedings, bringing the case closer to a conclusion after more than 20 years of litigation.
The lawsuit dates back to 2005, when merchants accused Visa and Mastercard of violating U.S. antitrust laws by coordinating payment-processing practices with major banks and charging excessive interchange fees, commonly known as swipe fees.
These fees are paid by merchants whenever consumers use credit cards for purchases and have long been a source of tension between retailers and card networks.
What the Settlement Would Change
Under the revised agreement announced last November, Visa and Mastercard would reduce swipe fees by 0.1 percentage point for five years.
In addition, standard consumer card interchange rates would be capped at no more than 1.25% for eight years.
The settlement also introduces new flexibility for merchants, allowing them greater discretion in how they accept card payments and apply surcharges.
One of the most significant changes involves the longstanding "Honor All Cards" rule.
For decades, merchants accepting Visa or Mastercard products were generally required to accept every card issued within those networks.
The revised settlement would allow businesses to distinguish between different card categories, including commercial cards, premium consumer cards, and standard consumer cards.
This means merchants could potentially choose not to accept certain premium cards that often carry higher processing costs.
Industry observers view this provision as one of the most consequential elements of the agreement because it gives retailers more negotiating leverage than they have historically enjoyed.
Retail Groups Remain Unconvinced
Despite the court's favorable initial assessment, several major retail organizations continue to oppose the deal.
Among the objectors are the National Retail Federation, the Merchants Payments Coalition, and the National Association of Convenience Stores.
These groups argue that the settlement does not go far enough in addressing the market power of Visa and Mastercard.
According to critics, merchants would still face a difficult choice: either absorb the high costs associated with premium rewards cards or risk losing customers by refusing to accept them.
They also contend that merchants would remain unable to reject cards issued by specific banks while accepting others within the same payment network.
Retail giant Walmart joined the opposition, arguing that the settlement effectively preserves anticompetitive practices that have existed for more than three decades.
However, Judge Cogan concluded that while many of the objections raised legitimate concerns, perfection was not the legal standard for approval.
"The objectors identify several things that they want to do but can't (e.g., rejecting cards at the issuer-level, surcharging at the issuer-level) and that they theoretically can do but won't (e.g., rejecting premium cards)," Cogan wrote.
"But 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."
His comments suggest the court believes the settlement offers meaningful benefits while avoiding the risks and uncertainties of continued litigation.
Visa and Mastercard Welcome the Ruling
Both payment networks welcomed the court's decision.
Visa described the settlement as an important step toward providing merchants with greater flexibility in payment acceptance.
Mastercard similarly praised the agreement, stating that it "balances the interests of all parties."
Investors also reacted positively to the development.
Shares of Visa rose approximately 1.7% following the ruling, while Mastercard gained about 2%, reflecting market confidence that the companies are moving closer to resolving a major legal overhang.
Swipe Fees Continue to Grow
The settlement arrives against a backdrop of rapidly increasing card payment volumes and growing merchant concerns about processing costs.
According to data cited by the Merchants Payments Coalition, Visa and Mastercard swipe fees reached $118.8 billion in the United States during 2025.
That figure represented a significant increase from $111.2 billion in 2024 and more than quadruple the $25.6 billion recorded in 2009.
The average swipe fee reportedly stood at 2.36% in 2025.
For many retailers, particularly small businesses operating on thin margins, those costs have become an increasingly important issue as digital payments continue to replace cash transactions.
Economists See Potential Benefits
Supporters of the settlement argue that its impact could extend beyond merchants and ultimately benefit consumers as well.
Among those backing the agreement are members of the Electronic Payments Coalition, whose supporters include Visa, Mastercard, and major card issuers such as , , , and .
Two experts retained by the plaintiffs, Nobel Prize-winning economist Joseph Stiglitz and University of Washington professor Keith Leffler, concluded that the revised agreement could save merchants approximately $38 billion by 2031.
Their analysis further estimated total economic benefits of around $224 billion when broader consumer impacts are included.
Those projections helped strengthen the case for approval by demonstrating that the revised terms offer substantially greater value than previous proposals.
How the New Deal Differs From the Rejected Settlement
The current agreement emerged after an earlier settlement worth approximately $30 billion was rejected by the court in 2024.
At the time, U.S. District Judge Margo Brodie concluded that the proposed fee reductions were insufficient and that merchants remained constrained by the Honor All Cards requirement.
The earlier deal would have lowered swipe fees by only 0.07 percentage point over five years.
Judge Brodie ruled that merchants would still be paying fees above competitive levels and would gain too little flexibility in payment acceptance.
The revised settlement attempts to address those concerns by increasing fee reductions and loosening restrictions on card acceptance.
A Landmark Case Nears Its End
The litigation has become one of the most closely watched antitrust battles in the financial services industry, highlighting tensions between retailers seeking lower costs and payment networks defending the economics of the card ecosystem.
For merchants, the case represents a rare opportunity to challenge a fee structure that has become deeply embedded in modern commerce.
For Visa and Mastercard, resolving the dispute would remove a longstanding legal challenge while preserving much of the payment infrastructure that underpins their business models.
With preliminary approval now secured, attention will shift toward the final approval process.
If ultimately approved, the settlement could reshape merchant-card network relationships for years to come and stand as one of the largest antitrust settlements in U.S. corporate history.
While critics continue to argue that the agreement falls short of fundamental reform, supporters maintain that it delivers meaningful concessions that would have been difficult to guarantee through a prolonged courtroom battle.
The final outcome will determine whether a legal fight that began two decades ago finally reaches its conclusion—or faces another round of challenges before becoming law.