Visa, Mastercard can likely handle swipe-fee settlement bigger than $30 billion: judge
How might Visa and Mastercard's financial stability affect future settlements?
Visa and Mastercard's financial stability could allow them to withstand substantially greater settlements with merchants who argue they overpaid swipe fees1. However, the court would need evidence of their profitability to be certain. This financial strength could enable the card issuers to negotiate settlements that satisfy both parties while maintaining the security, innovation, and rewards associated with their payment networks.
Why did Judge Brodie deem $6 billion savings for merchants "paltry"?
Judge Brodie considered the $6 billion savings for merchants "paltry" because it was a small amount compared to the estimated $100 billion in swipe fees they paid to Visa and Mastercard in 2023. She believed the proposed settlement did not provide substantial relief to merchants and kept fees significantly above where they would be without the alleged antitrust violations.
What is the "Honor All Cards" rule mentioned by Judge Brodie?
The "Honor All Cards" rule, mentioned by Judge Brodie, is a requirement that merchants who accept Visa and Mastercard must accept all cards from those networks, regardless of the issuing bank. Merchants cannot discriminate among cards by accepting some and not others. This rule has been controversial, as it prevents merchants from negotiating better terms with certain issuers or rejecting cards with higher fees.