Mastercard and Visa agree to lower credit interchange rates in the US

Visa Mastercard

Global payments giants Mastercard and Visa have reached an agreement to lower the US credit card interchange rates for at least five years, as part of a legal settlement with US merchants.

The settlement, which follows after nearly two decades of litigation, allows small businesses and merchants to not only benefit from reduced interchange rates, but also having those reduced rates capped for a period of five years, applying to all US-issued credit programs. Additionally, the networks will also simplify their approach to surcharging and provide merchants with more options in how they accept digital payments.

It also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs. These discounting rules will maintain core consumer protections and transparency, replacing standards that had been updated in 2012.

“This agreement brings closure to a long-standing dispute by delivering substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs,” said Rob Beard, chief legal officer, general counsel and head of global policy at Mastercard.

“By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified,” said Kim Lawrence, president, North America, Visa. “Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”

The settlement is subject to final approval by the court, with all changes set to occur after approval of the settlement, which is most likely in late 2024 or early 2025.

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