Understanding the Payment Card Interchange Fee Settlement

Understanding the Payment Card Interchange Fee Settlement

Recently, many business owners have faced increasing costs across various aspects of their operations. Among these costs are credit card interchange fees, also known as swipe fees, which major credit card companies impose for processing customer payments. These fees, intended to cover payment processing expenses, are often structured in a complex way, leading to confusion and potentially significant impacts on a company’s profits.

Visa and Mastercard have recently resolved a lawsuit alleging that they charged business owners excessively high fees. Following this Visa Mastercard interchange fee settlement, business owners now have the opportunity to claim their share of these excessive fees for transactions dated between January 1, 2004, and January 25, 2019.

The filing deadline for claims has been extended to August 30. To be eligible for the settlement, businesses should SUBMIT A CLAIM online before the deadline.

An Overview of the Payment Card Interchange Fee Settlement

In 2005, Visa and Mastercard were sued for allegedly imposing excessive fees on businesses for accepting their credit cards and were accused of violating antitrust laws. The lawsuit contended that businesses would have incurred lower interchange fees if Visa and Mastercard had not engaged in such practices.

Merchants have consistently criticized Visa and Mastercard for the high swipe fees or interchange fees they charge on transactions made with credit or debit cards. These fees generally consist of a small fixed amount plus a percentage of the total sale, typically ranging from 1.5% to 3.5% per transaction. Visa and Mastercard argue that these fees are justified as they cover the risks associated with extending credit to customers and the time taken to receive payment.

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In 2018, Visa and Mastercard initially agreed to a settlement of $6.2 billion, which didn’t go through. The finalized settlement amount was $5.54 billion in March 2023, with the process for filing claims starting in December. The settlement includes all persons, businesses, and entities that accepted Visa and Mastercard payments from January 1, 2004, to January 25, 2019. These parties will share the $5.54 billion settlement fund on a pro-rata basis, depending on the volume of claims filed. The exact amounts to be received will only be determined after all claims are processed.

What’s the Latest Update on the Payment Card Interchange Fee Settlement?

The District Court ultimately granted the Eastern District’s settlement. After hearing oral arguments, the Second Circuit Court of Appeals upheld the District Court’s final approval order, with one exception. The window for submitting an appeal has closed.

Claims are now being accepted. On a rolling basis, the distribution of Claim Forms to chosen Class Members started in December 2023 and is still going strong today. You can still file a claim even if you did not receive a Claim Form in the mail.

The deadline for submitting claims, which was set for May 31, 2024, has been moved to August 30, 2024. To ensure that you receive a fair portion of the settlement, you may simply submit a claim online right now.

What Did the Settlement Say?

Understanding the Payment Card Interchange Fee Settlement

Visa and Mastercard have denied any wrongdoing but have agreed to several significant changes as a part of the settlement agreement. These include:

  • Reduction in Interchange Fees:

The companies have committed to lowering the interchange rates, commonly known as swipe fees, by at least 4 basis points (0.04 percentage points). This reduction will be in effect for three years and is intended to lessen the financial burden on merchants when processing credit card payments.

  • Extended Rate Reductions:

Beyond the initial three-year period, swipe rates will remain at least 7 basis points below the current average for an additional five years. This extended relief aims to provide a longer-term cost reduction for merchants.

  • Increased Payment Flexibility for Merchants:

Merchants will gain more flexibility in directing customers toward alternative payment methods. They will also have the option to add surcharges to transactions made with premium credit cards, which typically incur higher swipe fees. This change is designed to give merchants more control over the costs associated with accepting various payment forms and incentivize the use of lower-cost options.

Plus, the settlement introduces a cap on credit card surcharges, which are extra fees charged for using a credit card at checkout. Previously, Mastercard had a maximum surcharge of 4%, and Visa had a cap of 3%. Under the new agreement, the surcharge limit for Visa and Mastercard payments will be set at 1%, regardless of the surcharges that merchants apply to cards from other networks like American Express and Discover. If a merchant does not accept cards from these other networks, the surcharge limit is 3%.

Additionally, merchants can encourage customers to use specific payment methods by offering lower surcharges for certain networks. Depending on the incentives provided by the merchant, this practice could influence customers’ payment choices.

What Will My Refund Amount Be?

The actual or expected interchange fees for Visa and Mastercard transactions from January 2004 to January 2019 will determine the payout from this settlement.

There is a limited amount of money used to manage this settlement. Payouts may be lowered proportionately since we anticipate that the entire value of claims will exceed the available cash. As a result of this modification, claimants will only get a percentage of their projected interchange costs for the given time frame. The precise amount of return that each claimant will get still needs to be ascertained.

For instance, if the settlement fund is $5.54 billion and the total value of valid claims is $125 billion, then the distribution will be calculated proportionally. Under these circumstances, for every $1.00 of valid claims submitted, a claimant would receive approximately $0.04.

There is potential for significant payouts, especially for major merchants like Amazon, Walmart, American Airlines, and Delta Airlines, which have either settled with the Defendants separately or opted out of the class settlement.

How Host Merchant Services Can Help?

Interchange Fee Settlement

Claim forms were made available starting December 1, 2023, in physical and online distribution. Suppose you are an HMS merchant who processed Visa and Mastercard payments between January 1, 2004, and January 25, 2019, and are interested in participating in the $5.54 billion Visa-Mastercard class action settlement. In that case, Host Merchant Services has collaborated with Certificate Clearing Corporation (CCC) to assist you through the claims process. Please complete our inquiry form, and our team will contact you within a few business days to provide further instructions.

Host Merchant Services and CCC offer several services to assist you with your claim. If you have not received a notice from the claims administrator, we can help locate your claim information. We can also estimate the value of your claim, enhance it if the Visa/Mastercard data provided needs to be corrected or completed, and file your claim. Throughout the process, we’ll keep you informed about the status of your claim.


The Payment Card Interchange Fee Settlement represents a significant milestone for business owners affected by high credit card swipe fees imposed by Visa and Mastercard. This settlement, resulting from a lengthy legal battle, allows merchants to claim their share of the $5.54 billion settlement fund. The extended filing deadline until August 30 offers businesses more time to submit their claims online and potentially recoup excessive fees paid between January 1, 2004, and January 25, 2019.

Despite Visa and Mastercard’s denial of wrongdoing, the agreement includes substantial changes aimed at reducing interchange rates, enhancing payment flexibility for merchants, and introducing caps on credit card surcharges. While the exact refund amounts remain to be determined based on claim submissions, businesses, especially major retailers, stand to benefit from this settlement. With assistance from services like Host Merchant Services and Certificate Clearing Corporation, merchants can navigate the claims process efficiently and potentially accelerate their refunds.

Frequently Asked Questions

  1. What is the Payment Card Interchange Fee Settlement?

    The settlement addresses Visa and Mastercard’s alleged antitrust violations by imposing high interchange fees on U.S. merchants from 2004 to 2019. It compensates eligible merchants affected by these fees due to anti-competitive practices​.

  2. Who is eligible to participate in the Settlement?

    Eligibility includes U.S. persons and businesses that accepted Visa or Mastercard payments from 2004 to 2019, excluding specific groups like dismissed plaintiffs and financial institutions issuing these cards​.

  3. How can eligible merchants submit a claim?

    Merchants can submit a claim online with their taxpayer identification number or using the claimant ID from the mailed form. The deadline for claim submission is August 30, 2024​.

  4. What is the deadlines for the settlement claim submission?

    The claim submission deadline set on 31 May has been extended to August 30, 2024. Settlement funds will be distributed to claimants​after the claims are processed.

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