FOR IMMEDIATE RELEASE
Contact:
J. Craig Shearman (202) 257-3678 craig@shearmancommunications.com
WASHINGTON, Sept. 14, 2026 — The Merchant Payments Coalition said today that nearly 1,000 businesses and trade associations have called on a federal judge to reject the proposed settlement of merchants’ lawsuit over Visa and Mastercard credit card swipe fees that drive up consumer prices, saying the deal fails to provide adequate relief.
“We object to this proposed settlement because it would grant Visa, Mastercard and giant card-issuing banks sweeping liability immunity for their anticompetitive system of card fees and rules while providing merchants with temporary and meager relief that is riddled with loopholes that will make the relief largely ineffective,” the businesses and associations said. “This is the third attempt by the credit card industry to push a settlement in this litigation that protects and preserves their anticompetitive business model for years to come. The courts have rejected these efforts twice before and should do so again.”
The comments came in an objection letter filed Thursday with U.S. District Judge Brian Cogan, who is considering whether to give final approval to a proposed settlement that received preliminary approval in June. The 978 signers of the letter include merchant trade associations along with small, medium and large retailers, restaurants, supermarkets, convenience stores, gas stations and other businesses from all 50 states plus the District of Columbia and Puerto Rico. They said they “had no part in negotiating” the proposal, which instead has been reached between Visa, Mastercard and a handful of lawyers without the involvement of most retailers or any major industry associations.
“The proposed settlement is subterfuge for approving the bad practices of the credit card industry, and the large number and wide range of merchants of all categories and sizes signing this letter show it,” MPC Executive Committee member Doug Kantor said. “The vast majority of merchants and other businesses that accept credit cards oppose the proposal. This is the third time that the credit card industry has tried to abuse the court process to protect its anticompetitive business practices. It should be rejected just like it has been in the past.”
Merchants said the proposal “entrenches Visa and Mastercard’s anticompetitive system of fees and rules” and “would cause more harm than good to businesses like ours and our members and to consumers across the nation.” Under the proposal, merchants “will continue to be charged excessively high fees that inflate retail prices paid by consumers.”
The proposed settlement comes in a 2005 class-action lawsuit alleging that Visa and Mastercard, which control 85% of the card network market, violate federal antitrust law by centrally price-fixing swipe fees charged by all banks that issue cards under their brands.
An earlier settlement was overturned by the 2nd U.S. Circuit Court of Appeals in 2016 after merchants said it would do nothing to change the cartel-like pricing practice. In 2024, a proposed settlement similar to the current proposal was rejected by Judge Margo Brodie, who said it did not adequately address the price-setting structure and expressed concern that Visa and Mastercard’s “honor all cards” rule makes merchants accept all cards from all banks regardless of swipe fee rates charged and the banks’ refusal to compete on the fees.
The current proposal, released in November 2025, is the third proposed settlement. But while it is “revised somewhat” from the 2024 proposal, “its provisions still do not provide meaningful relief” and it would lower swipe fees only a “miniscule” one-tenth of a percentage point, merchants said. They called that a “small fraction” of the 2.36% average merchants paid in 2025 and said it would “would merely return the average Visa/Mastercard rate to its 2023 level — nearly 20 years after this litigation started.”
The reduction, which would apply only to interchange fees that go to card-issuing banks and let network fees that go to Visa and Mastercard themselves continue to rise, would last only five years. But the duration for which merchants would be banned from future lawsuits is “alarmingly uncertain” and the ban would apply not only to issues raised in the current litigation but issues that “could have” been raised, “any” merchant fees and future claims over “new conduct and new injuries” in violation of due process rights.
A provision modifying the honor all cards rule by allowing merchants to reject premium cards with high swipe fees and accept only “standard” cards with lower rates “does not provide us with a real choice and will have no effect in practice” because more than 90% of credit card spending takes place on rewards cards, the letter said. The move is “unrealistic” because rejecting premium cards would mean rejecting nearly all cards.
The proposal would also limit swipe fees for standard cards to 1.25% but standard cards “represent a small and shrinking fraction of the market” and nothing in the settlement would prevent issuers from recategorizing those cards as premium cards or creating a third category to avoid the cap.
Another provision would allow merchants to surcharge up to 3% for credit card use, but surcharges “make consumers angry at merchants” and a combination of “varying and complicated” state laws and card network rules “make surcharging effectively unworkable.” In addition, Visa and Mastercard would be allowed to set higher fees for merchants who surcharge, “wiping out any benefit of this provision.”
Credit and debit card swipe fees have increased 80% since the pandemic, reaching a record $198.25 billion in 2025. They are most merchants’ highest operating cost after labor and too much to absorb, driving up prices more than $1,200 a year for the average family. Besides setting swipe fees, Visa and Mastercard block credit card transactions from being processed over other networks that have lower fees and better security.
Action on the litigation comes as Congress is considering the Credit Card Competition Act. Under the CCCA, banks with at least $100 billion in assets would enable credit cards they issue to be processed over at least two unaffiliated networks — Visa or Mastercard plus a competitor like NYCE, Star or Shazam. The measure would result in competition over fees, security and service that would save merchants and consumers $17 billion a year.
About MPC
The Merchants Payments Coalition represents retailers, supermarkets, convenience stores, gasoline stations, online merchants and others fighting for a more competitive and transparent card system that is fair to consumers and merchants. Follow MPC on Twitter, Facebook or LinkedIn for the latest on swipe fees.
