BusinessMar 26, 2024
Payment giants will cap transaction fees as part of massive settlement
Antitrust Regulation
Noah Weidner
Visa and Mastercard raked in over $100B from credit card swipe fees last year, but their banner revenue has been repeatedly jeopardized by legal battles. In 2019, both companies shelled out $6B following a class-action lawsuit claiming their networks were anti-competitive — and today, rather than fighting another case against merchants, they’ve decided to settle.
- After two decades of legal theater, both companies agreed on Tuesday to limit credit card swipe fees — a deal that could save US retailers “at least $30B over five years.”
- This agreement allows retailers to charge a surcharge at checkout for customers using Visa or Mastercard credit cards, or they could steer them toward cheaper alternatives.
Banks, take this L: This settlement is one of the largest antitrust settlements ever, but it won’t only impact the payment giants — it’s also likely to dent the revenues of issuing banks like JPMorgan Chase, Bank of America, and Citigroup. These banks could see billions less due to the reduced swipe fees at checkout.
