US' NRF urges rejection of reported Visa, Mastercard swipe fee deal

The National Retail Federation (NRF) has called for the rejection of a proposed settlement in the long-running class-action antitrust lawsuit against Visa and Mastercard over ‘swipe’ fees charged to retailers for credit card transactions.

The swipe fee reduction is insufficient, NRF chief administrative officer and general counsel Stephanie Martz said noting that it represents only a small rollback from the 2024 average swipe fee of 2.35 per cent, equivalent to 2023 levels of 2.26 per cent. Swipe fees have tripled since 2010, when they averaged 2.02 per cent.

The proposal does not reportedly address Visa and Mastercard’s centralised rate-setting practices, which NRF argues violate US antitrust law. The small fee cut would only apply to interchange, the portion paid to card-issuing banks, without restricting the share retained by Visa and Mastercard. This could allow the companies to raise their own portion, effectively cancelling any savings for merchants or consumers.

The lawsuit also challenges the ‘honor-all-cards’ rule, which compels retailers to accept all cards, including high-fee rewards and commercial cards that can charge up to 4 per cent. The reported settlement would allow merchants to choose between categories, non-reward, reward, or commercial cards, but NRF dismissed this measure as meaningless, noting that about 85 per cent of credit cards issued today are rewards cards, leaving merchants little real choice.

Filed in 2005, this is the third settlement attempt in the case. The first was overturned in 2016 by the 2nd US Circuit Court of Appeals, and a second was rejected in 2024 after NRF argued it failed to end the fee-setting and card-acceptance mandates, the federation said in a release.

“This is the third attempt to settle this case, and the card industry either just doesn’t get it or just doesn’t care. Once again, this proposal is all window dressing and no substance. 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,” Martz said.

Swipe fees for Visa and Mastercard credit cards alone reached $111.2 billion in 2024, with total credit and debit card fees at a record $187.2 billion, making them retailers’ second-highest operating cost after labour. These fees inflate consumer prices by nearly $1,200 annually.

With litigation offering little relief, NRF continues to push for the Credit Card Competition Act, which would require major banks to enable card processing on at least one unaffiliated network, such as Star, NYCE, or Shazam, in addition to Visa or Mastercard. The federation estimates this would inject competition and save merchants and consumers $17 billion annually.

NRF has led efforts for over two decades to reform swipe fees, urging meaningful competition in credit card processing to curb costs for both retailers and consumers.

ALCHEMPro News Desk (HU)