After nearly two decades of legal disputes, Visa reached a settlement with American merchants, lowering credit card interchange fees and setting a cap on rates until 2030. According to a press release, this reduction in fees has increased the market competitiveness for merchants, especially small businesses, saving them a significant amount of expenses.

Lowering credit interchange fees

In addition, the payment giant also assured merchants that interchange fees would not be raised for at least five years. This move aims to enhance stability, allowing merchants to plan their finances accordingly.

Kimberly Lawrence, President of Visa North America, mentioned, "Through direct negotiations with merchants, we have reached a settlement agreement, made meaningful concessions, and addressed the real pain points identified by small businesses. Importantly, while making these concessions, we have also maintained opportunities for millions of Americans and our economy for crucial security, protection, innovation, rewards, and access to credit."

Apart from lowering fees and setting caps, the agreement also allows merchants to steer customers towards preferred payment methods. The settlement agreement is pending court approval.

Merchants Target Payment Giants

Recently, American Express faced a collective lawsuit filed by ten American merchants in the Rhode Island federal court. The lawsuit alleges that American Express overcharged thousands of merchants nationwide for consumer transactions on credit and debit cards.

Specifically, the lawsuit claims that American Express stifles competition through its rules, which inhibit merchants from offering discounts, surcharges, or other incentive measures to guide customers towards cheaper payment methods.

While Visa and Mastercard abandoned restrictive provisions by the end of 2013, American Express differs in this regard, continuing to enforce policies suspected of stifling competition in the payment card market. Meanwhile, similar lawsuits involving Mastercard are also underway.