The Visa-Mastercard Settlement Has Preliminary Approval. Nothing Changes Yet, and Most of What Will Change Runs Through the Acquirer.

A merchant is going to ask when their interchange goes down, and a sales rep is going to ask whether the settlement can go in a pitch deck. The honest answer to both, as of September 2026, is that nothing has changed yet. On 9 June 2026 U.S. District Judge Brian Cogan in Brooklyn granted preliminary approval to the amended settlement between Visa, Mastercard and a class of every U.S. merchant that accepts their cards. Preliminary approval starts a notice and objection process; it does not change a network rule. What it does is give the industry a text to plan against, and that text puts most of the work on the acquiring side.

How the Case Got Here

In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation was filed in 2005 in the Eastern District of New York. It has produced two settlements. The first, for damages, was approved in December 2019 at roughly $5.54 billion and upheld by the Second Circuit in March 2023; its claims deadline passed on 4 February 2025 and the court-authorised administrator says a second distribution is anticipated in September 2026. The second is about rules rather than money, and it is the one that just got preliminary approval.

A version of that rules settlement was announced in March 2024 and rejected in June 2024 by Judge Margo Brodie, who found among other things that the fee relief was inadequate, that the settlement kept the Honor All Cards rule intact, and that a merchant accepting American Express was effectively limited to a 1% surcharge. The case was reassigned to Judge Cogan after Judge Brodie's retirement. The parties announced the amended agreement on 10 November 2025; Mastercard attached its text to a Form 8-K dated the same day, and the descriptions below are drawn from it.

Who Is Bound

The class is every person, business and entity that accepted Visa- or Mastercard-branded cards in the United States at any time between 18 December 2020 and the date of preliminary approval, and the agreement says no exclusions are permitted. There is no fund, no claim form and no opt-out. A merchant who calls to ask how to file a claim on this settlement is thinking of the 2019 damages case, and that window closed in February 2025.

What the Agreement Says, Term by Term

Interchange: an average, not a rate

Visa and Mastercard each commit that the system-wide, volume-weighted average effective interchange rate on domestic credit transactions will sit at least ten basis points below the combined baseline for the twelve months ending 31 March 2025, for five years after the reduction commences. An independent auditor certifies compliance annually, with rebalancing if the limit is exceeded. Merchants on custom or negotiated rates get a proportional reduction.

Read that carefully before anyone promises a merchant ten basis points. The obligation attaches to a network-wide average, not to any merchant's blend. A merchant on interchange-plus will see whatever their particular mix yields on the statement. A merchant on flat-rate or tiered pricing sees nothing unless the ISO or payment facilitator that sets their price passes it through, which is a pricing and residual decision, not something the settlement does for you.

Two caps with two different clocks

• Posted domestic credit interchange rates are frozen at their 31 March 2025 levels for the same five-year period as the average reduction.
• Standard consumer credit products, defined as Visa Traditional and Traditional Rewards and Mastercard Core and Enhanced Value, are reduced to and capped at 125 basis points. The agreement runs that cap for the duration of the release and covenant not to sue, which class counsel and the trade press have described as eight years.

Premium consumer products, meaning Visa Signature, Signature Preferred and Infinite, and Mastercard World, World High Value, World Legend and World Elite, get the freeze but not the 125-point cap. Objectors have also pointed out that network assessment fees are not capped at all.

Honor All Cards becomes Honor All Cards Within a Category

Within 90 days of what the agreement calls the Settlement Approval Date, the networks must let a U.S. merchant decide category by category whether to accept debit cards, standard consumer credit, premium consumer credit and commercial credit. The condition is that a merchant which accepts any card in a category must accept all cards in that category regardless of issuer. A merchant can also pilot non-acceptance for up to 180 days in any twelve months at no more than 20% of outlets under the same trade name, on 30 days' notice.

Whether anyone uses this is a commercial question; the objectors' filings put premium rewards cards at roughly 85% of cards, a number that is theirs and not the networks'. What is not in doubt is the technical dependency. Declining a category at the point of sale means identifying the product at authorisation, and that capability sits in the terminal, the gateway and the acquirer's platform, not in the merchant's hands.

Surcharging without the American Express problem

Surcharging in the U.S. dates to settlement rules that allowed it from 27 January 2013. Under Visa's current rules the surcharge is limited to credit, capped at the lesser of the merchant's cost or 3% since April 2023, and, in Visa's own words to merchants, must be applied to Visa on the same terms and conditions as any equal or higher cost competitor that limits surcharging. That last clause is the one that has made surcharging awkward for anyone who also accepts American Express.

The amended agreement removes it. Within 90 days of the Settlement Approval Date, a merchant may surcharge Visa credit at the brand level or the product level, at up to the lesser of 3% or its Visa credit cost of acceptance, and the agreement states in terms that it may do so regardless of whether it accepts or surcharges any other payment card, including Mastercard, American Express or Discover. It may surcharge Visa and not Mastercard, or the reverse. The networks may not build interchange structures that target a merchant for surcharging in compliance with the rules.

Cost of acceptance is defined as the merchant's average effective interchange plus the average of all network fees imposed on acquirers or merchants, as a percentage of transaction amount, over the preceding one or twelve months. The merchant does not have that figure. You do. Expect to be asked for it, and expect to be asked to defend it.

Two things do not move. Debit and prepaid cards remain outside the surcharge rules entirely, and state law is untouched: a state that prohibits or caps surcharges still does, whatever the network rules say.

The notice that lands in your queue

A merchant that intends to surcharge must give its acquirer at least 30 days' advance written notice stating the merchant's name and address, whether the surcharge is at the brand or product level, the amount, and any payment facilitator, processor or third party involved. The dollar amount of the surcharge must be disclosed on the receipt. For an ISO or payment facilitator, that notice is an intake record with a clock attached: log the date it arrived, check the amount against the cost-of-acceptance figure, confirm the gateway configuration matches brand or product level, and be able to produce all of it when the sponsor asks.

When, Exactly

Every operational clock in the agreement runs from the Settlement Approval Date, defined as the business day after notice has gone to the class and the court has entered the final settlement order and judgment without substantial modification. Preliminary approval is not that date. Mastercard's own filing said final approval was most likely in late 2026 or early 2027, and the trade press quotes analysts expecting the same. The agreement separately defines a Settlement Final Date that waits for any appeal to be resolved, and appeals are likely: Walmart, the National Retail Federation, the National Association of Convenience Stores, the National Restaurant Association and Circle K's parent all filed objections by the December 2025 deadline, Judge Cogan heard them on 27 April 2026, and NACS has said it will appeal to the Second Circuit if final approval is granted.

The judge's answer to the objectors was that the test is what the class could realistically win at trial, not the best imaginable outcome; two court-appointed economists valued the agreement at roughly $38 billion through 2031. Whether that survives appeal is not something a merchant-services team can control. What it can control is not building a 2027 budget, a pricing schedule or a sales script on a date the agreement does not contain.

What to Do Before Any of It Takes Effect

1. Tell sales what the settlement is not. It is not a ten-basis-point cut for every merchant, it is not in force, and the damages settlement is a different case whose claims window closed in February 2025.
2. Decide the pass-through policy for flat-rate and tiered portfolios now, while it is a policy decision rather than a support ticket.
3. Find out from your processor and gateway vendors whether they can identify standard, premium and commercial credit at authorisation, and what category-level decline would look like on the terminal.
4. Build the surcharge-notice intake: received date, brand or product level, amount, third parties named, and the cost-of-acceptance figure you checked it against.
5. Work out how you will compute a merchant's cost of acceptance on the agreement's definition from the data you already hold.
6. Keep a copy of the agreement, not a summary of it. Almost everything written about this settlement, including this piece, is secondary. The text is a public exhibit to Mastercard's 10 November 2025 Form 8-K; read the paragraph before you act on it.

The One-Line Version

The settlement has a judge's preliminary blessing, a text you can read, and no effective date. When it does take effect, the merchant's new rights are exercised through notices to you, configurations you control and figures you compute. Prepare for that, and stop anyone from selling it before it exists.