A proposed settlement between Visa, Mastercard, and U.S. merchants could change what happens at the register, letting stores refuse certain high-cost cards if a federal judge signs off. The deal, part of a long-running lawsuit in New York, aims to ease the bite of “swipe fees” and give retailers more control over how customers pay. Supporters call it overdue flexibility. Critics warn of new headaches for shoppers and staff.
What the Deal Would Change
“If approved by a court, a proposed settlement from Visa and Mastercard would, among other things, allow merchants to decline specific kinds of cards at checkout.”
The plan would loosen network rules and expand steering options. Stores could nudge customers toward cheaper payment methods and, in some cases, say no to costlier card types tied to premium rewards. Industry lawyers say the proposal also includes multi-year limits on average fees and more freedom to offer discounts by card brand or product tier.
For consumers, the checkout script may shift. Instead of “credit or debit,” some will hear, “this card is accepted, that one isn’t—do you have another?”
Why Merchants Pressed the Case
Merchants have complained for years that interchange fees—paid to card issuers and set by networks—keep climbing. According to the Nilson Report, U.S. merchants paid about $101 billion in credit card interchange fees in 2023, with total card processing costs near $172 billion. Small retailers say they lack leverage to negotiate, while large chains say costs still feed into prices.
This lawsuit is the injunctive piece of a two-track legal fight that dates back almost two decades. A separate damages settlement worth more than $6 billion was approved in 2019. The new deal targets rules and practices, not just money.
How It Could Affect Shoppers
Consumers enjoy rich rewards on premium cards, but those perks aren’t free. Higher interchange usually funds them, and merchants pay the bill. If stores start declining specific products, shoppers may need a backup card—or switch to debit, which often carries lower fees.
- Some stores may post signs showing which cards or tiers they accept.
- Discounts could appear for lower-cost cards or for debit.
- Premium rewards cards may face more pushback at smaller retailers.
Consumer advocates caution that checkout could get confusing. Clerks will need training, and signage must be clear to avoid surprises at the terminal.
Industry Response and Fault Lines
Retail groups have split reactions. Some say any steering freedom is a win. Others argue the changes are too narrow and too temporary. The National Retail Federation has argued that fee relief should be broader and supported by law, not just settlement terms.
Visa and Mastercard, for their part, have said the agreement offers stability and preserves the card benefits consumers expect, while giving merchants more choice. Banks that issue cards worry that restricting acceptance of premium products could hit rewards programs that customers value.
Policy Backdrop and What’s Next
Congress is also circling the issue. The Credit Card Competition Act would require larger banks to offer a second routing network, potentially adding pricing pressure. Supporters say it could lower fees. Opponents warn it could weaken security and rewards. The settlement does not replace that policy debate; it lands right in the middle of it.
Approval is not automatic. The federal judge overseeing the case in the Eastern District of New York will consider objections and decide whether the terms are fair. If the court approves, changes could phase in over several months, with fee limits and rule adjustments lasting for a set period.
What to Watch
Three questions now loom large. First, how many merchants will actually decline certain cards, and in which sectors? Second, will card issuers tweak rewards if premium acceptance dips? Third, does Congress intervene with broader rules or wait to see the market response?
For now, the proposed settlement signals a shift in checkout power. If the court signs off, stores may finally get more room to steer the cost of payments. Shoppers might keep a second card handy. And the long fight over swipe fees will move from the courtroom to the point of sale.
