The proposed $30 billion antitrust settlement by Visa and Mastercard, aimed at reducing credit and debit card fees for merchants, is in jeopardy. A New York judge has indicated she is likely to

reject the accord.

U.S. District Judge Margo Brodie in Brooklyn informed lawyers for the card networks and the objectors at a Thursday hearing that she will "likely not approve the settlement," according to court records. Judge Brodie plans to write an opinion detailing her decision and reasoning.

Both Visa and Mastercard expressed disappointment. Mastercard described the settlement as a "fair resolution" offering businesses more flexibility in managing card transactions, while Visa called it an "appropriate resolution" to the nearly 19-year-old litigation.

The settlement, announced on March 26, aimed to resolve most claims in the nationwide lawsuit, with over 90% of the settling merchants being small businesses.

Merchants have long criticized Visa and Mastercard for charging excessive swipe fees, or interchange fees, for processing card payments and for allegedly barring them from directing customers to cheaper payment methods.

In 2023, swipe fees totaled $172 billion, having more than doubled over the past decade, according to the Merchants Payments Coalition, which represents various retailers, grocers, convenience stores, and gas stations.

The settlement proposed reducing the average swipe fee of 1.5% to 3.5% by at least 0.04 percentage points for three years. Additionally, Visa and Mastercard agreed to cap rates for five years and eliminate anti-steering provisions.

However, objectors, including the National Retail Federation, the world's largest retail trade group, criticized the settlement as "manifestly insufficient" and its benefits as "meager and temporary." They argued that it would still allow Visa and Mastercard to control swipe fees and impose a "virtually limitless" ban on future claims by merchants. Photo by Petr Kratochvil, Wikimedia commons.