MasterCard confirms U.S. credit card interchange rate settlement with merchants

Mastercard (MA) announced it has reached an agreement to reduce its U.S. credit card interchange rates for at least a five-year period as part of a legal settlement with merchants. “The settlement, which also features a set of adjustments to Mastercard’s network rules, allows small businesses and all merchants to continue to benefit from accepting electronic payments while delivering consumers a simple and secure way to pay,” the company stated. The agreement – agreed to by Mastercard, Visa (V) and the court-appointed class counsel – provides all merchants with clarity and certainty on several areas related to their acceptance of payment cards, the company added. “The settlement is subject to final approval by the Eastern District Court of New York. Upon final approval of the class settlement by the court, Mastercard will have resolved the vast majority of all pending U.S. merchant litigations that are directed at seeking changes to the company’s interchange structure and merchant acceptance rules. In agreeing to the settlement, Mastercard does not admit to any improper conduct with respect to the plaintiffs’ allegations. All rules practice changes will occur after approval of the settlement, most likely in late 2024 or early 2025. This agreement follows a prior settlement with a damages class,” MasterCard stated. “This agreement brings closure to a long-standing dispute by delivering substantial certainty and value to business owners, including flexibility in how they manage acceptance of card programs. As the court reviews the settlement, we will focus our energy on continuing to provide consumers, small businesses and all business owners what they expect from Mastercard – a better payments experience, strong value and peace of mind,” said Rob Beard, Chief Legal Officer, General Counsel and Head of Global Policy at Mastercard.