by Envisant

A federal judge has granted preliminary approval to a revised settlement between Visa and Mastercard and a class of more than 12 million merchants, marking a notable step forward in a long-running antitrust case over credit card interchange, or “swipe,” fees. The litigation, ongoing since 2005, centers on claims that merchants were charged excessive fees to accept card payments.

Under the proposed settlement, Visa and Mastercard would reduce swipe fees by 0.1 percentage point for five years and cap standard consumer card interchange rates at 1.25% for eight years. The agreement also would give merchants greater flexibility in deciding which categories of cards they accept, modifying the longstanding “Honor All Cards” requirement. In addition, merchants would gain expanded flexibility to apply surcharges to card transactions.

From a credit union perspective, these changes underscore the need to carefully evaluate how shifts in interchange policy may affect the sustainability of member-focused financial services. Interchange income helps credit unions fund essential offerings—like free or low-cost checking accounts, fraud protection, rewards programs, and financial education—while also supporting community investments, scholarships, and hardship assistance programs rooted in the “people helping people” philosophy.

It’s also important to note that this settlement is separate from ongoing litigation challenging Illinois’ Interchange Fee Prohibition Act (IFPA). Credit unions continue to engage in those conversations to ensure policymakers understand the unique role they play in strengthening local communities and supporting financial well-being for individuals and small businesses.

ICUL and Envisant will continue monitoring developments and sharing updates as more details become available.