The settlement agreement between Visa and Mastercard may have a slight impact on the issuing bank's revenue, but it is expected that the bank will absorb these revenue losses by adjusting reward fees to maintain a stable source of income.

Settlement Agreement: Visa and Mastercard have reached a $30 billion settlement agreement aimed at resolving most of the claims in nationwide litigation over the past 20 years, making it one of the largest antitrust settlements in US history. Visa and Mastercard have agreed to reduce card swiping rates by at least 4 basis points within 3 years and ensure that the average rate within 5 years is 7 basis points lower than the current average.

The impact of reduced transaction fees on banks: Merchants typically pay card swiping fees of approximately 1.5% to 3.5% per transaction. Lowering and limiting transaction fees may have an impact on issuing bank revenue, but it will not have a significant financial impact on Visa and Mastercard.

Analysts expect that banks will absorb most of their revenue losses by sharing the impact with credit card networks and reducing reward fees. The settlement may pose potential risks to Capital One's acquisition of Discover Financial.