Visa and Mastercard to Pay $5.54 Billion in Landmark Antitrust Settlement

In a landmark ruling, Visa and Mastercard have agreed to a $5.54 billion settlement in one of the largest class-action lawsuits in U.S. history. The settlement, stemming from antitrust violations, offers relief to millions of American businesses that were subject to inflated card processing fees between January 1, 2004, and January 25, 2019.

The lawsuit, known as In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (Case number 05-md-1720), concluded that Visa, Mastercard, and their member banks conspired to fix excessively high swipe fees and enforce anti-competitive rules that restricted alternative payment methods. This practice significantly increased the cost of doing business for merchants across the country.

Eligible businesses now have the opportunity to recoup up to 1-1.5% of their total gross processing volume from the settlement period. This could provide substantial financial relief for companies that have long been burdened by these excessive fees. However, the actual recovery amount will depend on various factors, including the total number of valid claims submitted.

The implications of this settlement are far-reaching for the business community and the payment processing industry. It not only provides immediate financial recompense but also signals a shift towards more transparent and fair practices in the credit card processing sector. This outcome may encourage further scrutiny of payment processing fees and practices, potentially leading to more competitive pricing and increased options for merchants in the future.

For small and medium-sized businesses, in particular, this settlement could represent a significant windfall, offering an opportunity to reinvest in their operations or offset other costs. The settlement also serves as a reminder of the power of collective action in addressing systemic issues within industries.

Merchants interested in claiming their share of the settlement must act before the February 4, 2025 deadline. While third-party services are available to assist with the claims process, businesses should be aware that they can file claims directly through the official settlement website without incurring additional costs.

This historic settlement underscores the importance of fair competition and transparency in the financial services sector, potentially setting a precedent for future cases involving large financial institutions and their business practices. As the business world continues to evolve, this case may serve as a catalyst for further reforms in payment processing and merchant services.