Visa, Mastercard Could Handle Bigger Swipe-Fee Deal, Judge Says

The federal judge who rejected Visa Inc. and Mastercard Inc.’s $30 billion settlement with retailers this week said the payment networks appear capable of stomaching a “substantially” costlier deal.

The accord proposed in March, estimated to save retailers that much over five years, would have “disproportionately and inequitably” benefited small, local merchants over larger companies such as Walmart Inc. or Target Corp., US District Judge Margo Brodie in Brooklyn wrote in an 88-page opinion Friday.

The filing offers more insights into Brodie’s reasons for rejecting Visa and Mastercard’s effort to resolve two decades of legal battles over credit-card swipe fees. The agreement would have permitted retailers to charge consumers extra in transactions involving Visa or Mastercard credit cards, and allowed the merchants to adopt pricing tactics that steer consumers to lower-cost cards.

The “cost” of the settlement is the estimated $30 billion figure, the judge noted.

“As the Merchant Trade Groups point out, however, the estimated $6 billion in annual savings to merchants is paltry compared to the $100 billion that merchants paid in interchange fees on Visa and Mastercard transactions in 2023,” she wrote. The two firms could “withstand a substantially greater judgment,” she said.

To contact the reporter on this story:
Paige Smith in New York at psmith494@bloomberg.net

To contact the editors responsible for this story:
Hannah Levitt at hlevitt@bloomberg.net

David Scheer

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