A federal judge is once again deciding whether to approve a settlement between Visa, Mastercard and the merchants who sue them over swipe fees. It is the third time in two decades that side has tried to close this case, and the third time nearly a thousand of the businesses the deal is supposed to compensate have told the court to reject it. The pattern by now is the story: a category of antitrust settlement that structurally cannot satisfy the class it is meant to serve, no matter how many times the same two networks redraw the numbers.
The Same Deal, Three Times
The underlying case, In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, dates to 2005. A first settlement reached in 2012 was thrown out by the Second Circuit Court of Appeals in 2016 for failing to represent merchants adequately. A second attempt, worth roughly $30 billion, was rejected in June 2024 when U.S. District Judge Margo Brodie issued an 88 page opinion finding it did not treat all merchants equitably and left the card networks’ “Honor All Cards” rule, which forces any merchant that accepts one network card to accept all of them, untouched.
Visa and Mastercard came back with a superseding, amended settlement agreement on November 10, 2025, according to a Visa filing with the Securities and Exchange Commission. Visa deposited $500 million into a litigation escrow account on December 23, 2025 against the deal. U.S. District Judge Brian Cogan granted preliminary approval on June 9, 2026. Then, on September 14, 2026, 978 merchants and trade associations from all 50 states, Washington D.C. and Puerto Rico filed an objection letter with Judge Cogan asking him to reject it anyway.
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“The vast majority of merchants and other businesses that accept credit cards oppose the proposal,” said Doug Kantor, a Merchants Payments Coalition Executive Committee member, in the coalition’s account of the filing. The letter itself frames the current proposal as part of a pattern: this is the third time, the signers wrote, that the credit card industry has tried to push a deal through the court process.
Why Merchants Keep Saying No
The current terms cut posted credit interchange rates by 10 basis points for five years and cap standard consumer card rates at 1.25 percent for eight years, with a 3 percent ceiling on premium card surcharging. Objectors call the rate cut marginal against a fee base that has grown fast: swipe fees paid by U.S. merchants hit a record $198.25 billion in 2025, an increase objectors put at 80 percent since the pandemic, while the average effective rate reached 2.36 percent.
The more consistent objection is not the size of the discount but its shape. The deal would grant Visa, Mastercard and the major card issuing banks a broad release from further liability over the pricing and rules system the merchants sued over in the first place, in exchange for relief that objectors say expires and is full of carve outs. Retail Industry Leaders Association General Counsel Monica Welt, responding to the June preliminary approval, put it plainly: “While disappointing, this decision is merely preliminary approval. It is not the final word in this case.”
Neither the 2024 rejection nor the 2025 rewrite touched Honor All Cards, the rule Judge Brodie singled out as the actual leverage point. Merchants that want to steer customers toward lower cost payment methods still cannot decline a network’s more expensive cards while keeping its cheaper ones. A temporary rate cut without a change to that rule is, in the objectors’ reading, a discount on a system whose structure stays exactly as it was.
The Money Is Already Moving
None of this has stopped payouts. The settlement class covers roughly 12 million merchants who accepted Visa or Mastercard during the relevant period, and the court approved a second initial distribution of settlement funds in June 2026, expected to go out in September 2026, even while the fairness of the underlying deal is still being litigated. That split matters for how finance teams should read this story: a merchant can be receiving a settlement check tied to past overcharges in the same month its trade association is telling a federal judge the forward looking terms of the same settlement are inadequate.
Austen Jensen, RILA’s Senior Executive Vice President of Public Affairs, made the forward looking objection specific in December 2025, when the current terms first circulated: “the plan to limit interchange fees by only a small fraction does not offset the increases that have occurred over the past several years.” The distinction the objectors keep drawing is between compensation for the past, which the settlement pays out on a fixed schedule, and reform of the pricing system going forward, which each version of the deal has left largely intact.
What Visa and Mastercard Are Defending
The networks’ own disclosures show why they keep returning to the table instead of letting the case go to trial. Visa told the SEC that the estimated interchange reimbursement fees at issue in unresolved U.S. damages claims stood at $17.4 billion as of May 11, 2026, a figure the company said would keep rising as more claims are litigated, and one that excludes indirect purchaser claims and opt outs entirely. That exposure, not the five year rate cut, is the number driving settlement math on the networks’ side: an open ended trial verdict is a materially larger and less predictable risk than a capped, time limited concession.
Visa and Mastercard together process roughly 84 percent of general purpose credit card volume in the United States, a scale that also means any structural change to interchange pricing or Honor All Cards would move billions of dollars a year between the networks, card issuing banks and merchants. That is the tension a settlement of this size has to resolve: the networks will trade money for legal certainty, but resist trading away the rules that make their volume valuable to issuing banks in the first place. Merchants, meanwhile, have shown three times now that they will not accept the trade on those terms.
A Fight That Keeps Widening, Not Narrowing
Each round of this litigation has produced a settlement that is broader in scope than the one before it, not narrower, because neither side has been willing to concede the core structural point. Visa and Mastercard have offered larger and more elaborate packages of rate caps, surcharging flexibility and cash, while merchants have kept the objection constant: none of it touches Honor All Cards or the networks’ authority to set default pricing unilaterally. A settlement built to buy legal peace without ceding that authority will keep drawing the same objection regardless of how many additional concessions get layered on top, because the concession being asked for is not on the table.
That dynamic is why the case has outlasted two settlement rejections, a change in the presiding judge’s approach, and now a third full objection cycle, without either side going to trial. Trial carries the networks’ own $17.4 billion exposure figure as a floor, not a ceiling, since that number specifically excludes indirect purchaser claims. For merchants, a verdict is the only path to forcing a change to Honor All Cards that a negotiated settlement has shown, three times now, it will not deliver voluntarily. Both sides have more to lose at trial than at the table, which is exactly why they keep coming back to the table with a deal the other side keeps rejecting.
The Regulatory Alternative Nobody Passes
Litigation has moved further than legislation. The bipartisan Credit Card Competition Act, which would require the largest card issuing banks to route transactions over at least two unaffiliated networks, has been introduced in Congress repeatedly without passing. U.S. Senate Democratic Whip Dick Durbin, the bill’s leading sponsor, called the settlement’s relief insufficient when the November 2025 agreement emerged: “This deal provides only temporary concessions and the ability for Visa and Mastercard to change the rules as they go.”
Durbin’s office estimates the routing mandate would save merchants and consumers $17 billion a year, against the roughly $1,200 in extra annual costs it says swipe fees add to a typical American household. The bill would attack interchange pricing structurally, by forcing network competition on every transaction, rather than through a settlement that expires. It has not moved because the same concentrated economics that make Visa and Mastercard resist the courtroom outcome make them and their issuing bank partners a well resourced opponent in Congress too.
What It Means for the Finance Leader
Treat any relief from this settlement as temporary and partial, not as a reset of interchange economics. The current terms run five to eight years and leave Honor All Cards in place, so a finance team modeling payment acceptance costs should plan around today’s structure persisting well past 2026, with a modest, time boxed discount layered on top rather than a durable reduction.
Watch the surcharging language specifically. The settlement’s flexibility on surcharging and card acceptance rules, capped at 3 percent on premium cards, is the part most likely to survive appeal intact even if the broader deal keeps getting contested, and it is the lever merchants can act on directly without waiting for a court. Finance and payments teams that have not modeled a differentiated surcharge or discount strategy by card tier are leaving a negotiated concession unused.
Expect the timeline to keep slipping. Analysts at Keefe, Bruyette and Woods have projected final approval could land in late 2026 or early 2027, followed by a lengthy appeals process likely driven by larger merchants, which could push full implementation to 2029. A finance leader budgeting on this settlement delivering savings inside the current fiscal year is budgeting on a history that has not happened yet, twice.
What to Watch Next
Judge Cogan’s ruling on final approval, expected after the formal objection period closes, is the next checkpoint, as covered in FinTech’s report on merchants’ earlier escalation against the deal. If he follows Judge Brodie’s 2024 reasoning and finds the relief inadequate relative to Honor All Cards, expect a fourth negotiation rather than a trial, since neither side has shown appetite for the alternative. The pattern connects to a wider run of card network disputes working through the courts and regulators at once, including the rulemaking fight that recently turned into a federal lawsuit of its own. For now, the settlement’s own history is the best predictor of its future: every version of this deal that has reached a judge for a real look has come back for revision.
Source: Merchants Payments Coalition
