Key takeaway: Merchants and payments providers should treat the settlement’s terms as unsettled, not final. Final approval isn’t guaranteed given the scale of organized opposition. The objection also raises specific structural issues, including honor-all-cards exposure on premium cards and surcharge complexity. Those issues would matter to how merchants plan card-acceptance costs, even if the settlement is ultimately approved.
The Merchant Payments Coalition filed a letter with a federal judge last week. It asked the judge to deny final approval of the proposed $38 billion Visa/Mastercard interchange settlement. The coalition was joined by the National Association of Convenience Stores (NACS). Together, they cited the support of 978 retailers and retail trade associations.
The settlement resolves litigation over card-network swipe fees dating back to 2005. It received preliminary approval from U.S. District Judge Brian Cogan in the Eastern District of New York in June 2026. Payments were expected to begin as soon as this month.
In last week’s filing, the coalition argued the deal was reached without substantial retailer input. It said the settlement does not provide adequate relief. It argued it would grant Visa, Mastercard, and card-issuing banks broad liability immunity. In exchange, merchants would get only temporary, loophole-riddled relief. Doug Kantor, a member of the coalition’s executive committee, called the settlement “a subterfuge for approving the bad practices of the credit card industry.”
The objection centers on the size of the fee cut and the scope of merchants’ new options. The settlement lowers swipe fees by roughly a tenth of a percentage point. According to the coalition, a small fraction of the 2.36% average rate merchants paid in 2025. It would also let merchants reject “premium” rewards cards. The coalition also argues that carve-out does little in practice, since those cards represent about 90% of credit card spending.
A separate provision would let merchants surcharge credit card use by up to 3%. The coalition criticized this as too complicated to implement, given varying state laws and card-network rules. A Mastercard spokesperson told Supermarket News the company is “pleased the court granted preliminary approval.” The spokesperson said Mastercard looks forward to final closure. A Visa spokesperson could not be reached for comment.
Why it matters: This is already the third time card networks have tried to settle this litigation. Courts rejected a $7.25 billion deal in 2016 and a $30 billion offer in 2024. This objection is backed by nearly 1,000 merchants and trade groups. Its scale signals the fight over swipe fees is far from over, even with preliminary court approval in hand. Credit and debit swipe fees have risen 80% since the pandemic. They reached a record $198.25 billion last year, according to the coalition. That makes this settlement one of the largest cost levers merchants have pending in court right now.
Source: Supermarket News