Visa and Mastercard Near Agreement with Merchants to Reduce Fees and Allow Selective Card Acceptance

Visa and Mastercard are zeroing in on a settlement with merchants over a legal dispute that stretches back to 2005.

The potential deal would lower the interchange fees merchants pay when they accept credit card payments and allow businesses to refuse to accept certain cards from customers, according to a new report from The Wall Street Journal.

Merchants expecting immediate savings from the interchange-fee portion of the reported deal may be disappointed to learn that the agreement’s terms, as reported by the WSJ, would decrease interchange charges by approximately 0.1 percentage point, on average, over a span of several years.

But giving merchants the flexibility to refuse to accept certain cards may carry additional cost savings for businesses. Interchange rates can vary according to the type of card a shopper uses to complete a transaction and whether the card and cardholder are physically present at the point of purchase.

Credit cards that allow cardholders to earn rewards continue to be popular with consumers. And credit card issuers such as American Express and Chase have rolled out new rewards programs in 2025 to keep pace with market demand.

The proposed deal aims to allow merchants to refuse to accept payments from credit cards that expose them to higher fees.

Merchants can face higher interchange fees when cardholders pay for purchases with rewards cards. But if the proposed deal between Visa, Mastercard, and merchants moves ahead, rules stipulating that merchants must accept every one of a network’s cards if they accept one of them may come to an end.

Merchants may then refuse to accept payment from cards that charge higher interchange fees, though businesses should consider the potential impact that practice could have on their overall sales figures.

The card networks and merchants are nearing an agreement that stands to impact nearly every participant in the credit card industry to some degree, but that doesn’t mean the deal couldn’t still fall apart.

The Wall Street Journal said that any arrangement the two sides come up with won’t take effect without court approval.

And not every stakeholder is convinced that the deal is in the best interest of both parties. 

The National Retail Federation, a trade association representing the interests of retailers in the U.S., issued a press release in response to the report of a settlement. 

In the release, Stephanie Martz, Chief Administrative Officer and General Counsel at the National Retail Federation, didn’t pull any punches in the criticism she levied at the potential settlement, saying that it lacks substance.

“This is the third attempt to settle this case, and the card industry either just doesn’t get it or just doesn’t care,” Martz said. “The reduction in swipe fees doesn’t begin to go far enough, and the change in the honor-all-cards rule would accomplish nothing. If the courts can’t fix this, it’s time for Congress to take action.”

If Martz has her way, merchants that have been waiting for this case to come to a conclusion may have to wait a little longer. CardRates will continue to track this developing story.