Visa Mastercard Swipe Fee Settlement: 978 Merchants Object

Published September 21, 2026 • CredibleLaw Editorial Team • Legal News

Nearly 1,000 businesses have formally asked a federal judge in Brooklyn to reject the proposed Visa Mastercard swipe fee settlement, the third attempt in more than two decades to resolve merchants’ antitrust claims over credit card interchange fees. The objection, signed by 978 retailers, restaurants, grocers, convenience stores, fuel retailers, and trade associations from all 50 states, Washington, D.C., and Puerto Rico, lands as Judge Brian Cogan weighs whether to grant final approval.

For small business owners, the outcome shapes what it costs to accept a card for years to come. Here is what the settlement would change, why so many merchants oppose it, what happens next, and how card-processing costs connect to cash-flow pressure, including for businesses repaying a merchant cash advance.

Key Takeaways On September 10, 2026, 978 merchants and trade groups filed a 48-page objection urging Judge Brian Cogan to deny final approval of the Visa Mastercard swipe fee settlement.The settlement would cut average credit interchange by 0.1 percentage point for five years, cap standard consumer card rates at 1.25% for eight years, and loosen the “honor all cards” rule.Objectors say the relief is small and temporary while the card networks and banks gain broad protection from future lawsuits.There is no payout fund and no claim form in this settlement. The older $5.54 billion damages fund closed to new claims on February 4, 2025.Final approval is not yet decided. Analysts expect a ruling in late 2026 or early 2027, with appeals likely.

What Happened: The September 2026 Objection

The Merchant Payments Coalition announced on September 14, 2026 that 978 businesses and associations had signed an objection letter filed the previous Thursday with U.S. District Judge Brian Cogan of the Eastern District of New York. The signers said they had no part in negotiating the deal, which was reached between Visa, Mastercard, their bank co-defendants, and class counsel.

The objectors’ central argument is that the settlement would grant the card networks and major issuing banks sweeping liability immunity for their fee system and network rules in exchange for what the coalition called “temporary and meager relief” for merchants. They describe it as the card industry’s third attempt to lock in its pricing model through the courts.

Background: A Case Filed in 2005

The litigation, In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation (MDL 1720), began in 2005 when merchants accused Visa, Mastercard, and card-issuing banks of violating federal antitrust law by collectively setting the interchange fees merchants pay on every card transaction. The class covers roughly 12 million merchants that accept Visa or Mastercard.

Two earlier settlement attempts failed. A federal appeals court overturned a 2012 settlement in 2016, and Judge Margo Brodie rejected a roughly $30 billion proposal in June 2024, finding it did not deliver sufficient relief. The current agreement was announced in November 2025, and Judge Cogan granted preliminary approval on June 9, 2026, finding it “fair, reasonable, and adequate” at that stage.

What the Proposed Settlement Would Change

The settling parties project the agreement would save merchants about $38 billion in acceptance costs over five years. The main terms, and the objectors’ response to each, are summarized below.

Term	What the settlement says	What objectors argue
Interchange cut	Average effective credit interchange drops 0.1 percentage point (10 basis points) for five years; posted rates frozen at March 31, 2025 levels for five years.	Tiny compared with the roughly 2.36% average merchants paid in 2025; it largely returns rates to 2023 levels.
Standard card cap	Standard consumer credit card interchange capped at 1.25% for eight years.	Standard cards are a shrinking share of spending, and many already carry rates below 1.25%.
“Honor all cards”	Merchants may decline entire categories, such as premium rewards or commercial cards, while accepting others.	Rewards cards make up more than 90% of credit spending, so declining them means turning away most customers.
Surcharging	Expanded rights to surcharge card payments, up to 3%, and to offer discounts that steer customers to lower-cost payment methods.	Impractical because state laws and network rules vary, and customers often resent surcharges.
Network fees	Not capped by the settlement.	Visa and Mastercard could raise their own network fees and offset the savings.
Release of claims	Merchants in the mandatory class release claims covered by the agreement.	The release is broad, unclear in duration, and may reach future conduct.

The Case for Approval

Supporters see it differently. Visa and Mastercard have said the agreement gives merchants of all sizes meaningful relief and more control over how they accept payments, and Mastercard has said it balances the interests of all parties. In granting preliminary approval, Judge Cogan acknowledged that some objections had merit but framed the question as whether the deal is the best recovery available in light of what could be won or lost at trial, not whether it is the best imaginable outcome.

That trial-risk comparison matters. After 21 years, two rejected settlements, and repeated failed efforts in Congress to change card routing rules, class counsel argue that guaranteed structural changes now are worth more than an uncertain verdict later.

Is There Money for Merchants? Two Different Settlements

This is the most common point of confusion. The same litigation has produced two separate settlements:

The damages settlement (2019): a $5.54 billion fund compensating merchants for past fees. The court-approved deadline to file claims passed on February 4, 2025, and distributions are being processed by the class administrator.
The 2026 injunctive settlement: the deal now under objection. It changes rates and rules going forward. It has no payout fund and no claim form.

If a company contacts your business offering to “file” for money under the 2026 settlement in exchange for a percentage, treat that as a red flag. Questions about the older fund can go directly to the official class administrator at paymentcardsettlement.com.

What Happens Next

Milestone	Status
November 2025	Settlement announced by Visa, Mastercard, and class counsel.
June 9, 2026	Judge Cogan grants preliminary approval.
September 10, 2026	978 merchants and trade groups file objection letter.
Final approval decision	Pending. Analysts at Keefe, Bruyette & Woods have projected late 2026 or early 2027.
Appeals	Expected. The National Association of Convenience Stores has said it will appeal to the Second Circuit if final approval is granted.
Changes on merchant statements	Not in effect today. If appeals run their course, some analysts expect implementation could slip to 2029.

In practical terms, nothing about your processing costs changes because of this settlement today, and it may be years before anything does.

Why Swipe Fees Matter for Small Business Cash Flow

Card acceptance fees have risen sharply since the pandemic and now rank as many merchants’ second-largest operating cost after payroll. For a business running on thin margins, they come off the top of every sale.

A simple illustration shows why objectors call the relief small. A restaurant with $60,000 a month in card sales paying a 2.36% average rate spends about $1,416 a month on interchange. A 0.1 percentage point reduction saves roughly $60 a month, or about $720 a year, and that assumes network fees stay flat. For many owners, the bigger lever in the settlement is the new ability to steer or surcharge, not the rate cut itself.

Before adding any surcharge, check your state’s rules and your processor agreement. State laws on credit card surcharges differ, debit cards are treated differently from credit cards, and disclosure requirements apply at the point of sale.

The Connection to Merchant Cash Advances

Processing costs and merchant cash advances are closely linked. Many MCAs are repaid from future card receivables, either through a split taken directly by the card processor or through fixed daily or weekly ACH debits sized to expected sales. When fees rise, the revenue left after each sale shrinks, but a fixed remittance does not.

That gap is where many business owners run into trouble. Restaurants, retailers, and convenience stores, the same businesses leading this objection, are among the heaviest users of MCAs and among the most exposed to card-fee pressure. For a closer look at that industry, see CredibleLaw’s guide to MCA defense for restaurants.

If daily withdrawals are straining your accounts, a few points are worth knowing:

Many MCA contracts include a reconciliation clause that allows payments to be adjusted when actual receivables fall. Whether and how it applies depends on the specific agreement. Learn more about how to stop MCA daily withdrawals.
Taking a second or third advance to cover the first, known as stacking, often compounds the problem rather than solving it.
Several states now require commercial financing disclosures, and some regulate how providers can collect. See merchant cash advance laws by state and our coverage of California SB 362 APR disclosure rules.
Regulators are also scrutinizing collection practices. New York’s Attorney General recently sued an online arbitration platform accused of working with MCA funders; read our summary of the Rapid Ruling lawsuit.

Broader data shows the pressure is real. CredibleLaw’s review of small business bankruptcy filings in August 2026 tracks how rising costs are showing up in court.

What Small Business Owners Can Do Now

Pull your last three processing statements and calculate your effective rate: total fees divided by total card volume.
Ask your processor how the settlement’s card-category and surcharge options would work on your account if final approval is granted.
Review your state’s surcharge and cash-discount rules before changing pricing at the register.
If you have an MCA, locate the reconciliation and default provisions in your contract and compare your required remittance with current net card receipts.
If collection activity has started, such as a default notice, frozen account, or lawsuit, consider a confidential review with an independent attorney. CredibleLaw can connect you with attorneys who handle MCA debt relief.

Frequently Asked Questions

What is the Visa Mastercard swipe fee settlement?

It is a proposed class settlement in the antitrust case merchants filed against Visa, Mastercard, and major card-issuing banks in 2005. It would cut average credit interchange by 0.1 percentage point for five years, cap standard consumer card rates at 1.25% for eight years, and let merchants decline or surcharge certain card categories. Judge Brian Cogan granted preliminary approval in June 2026; final approval has not been decided.

Why did 978 merchants object to the settlement?

In a 48-page objection letter filed in September 2026, 978 businesses and trade associations argued the deal gives Visa, Mastercard, and issuing banks broad protection from future lawsuits while offering merchants relief that is small, temporary, and full of exceptions. They also say they had no role in negotiating it.

Can my business get money from the 2026 Visa Mastercard settlement?

No. The 2026 settlement is forward-looking and has no payout fund or claim form. The separate $5.54 billion damages settlement from the same litigation closed to new claims on February 4, 2025. Be cautious of any service that charges a fee to file a claim under the 2026 deal.

When will the swipe fee settlement take effect?

Not yet. The court must first decide whether to grant final approval, which analysts expect in late 2026 or early 2027. Objectors have signaled appeals, and some analysts expect implementation could slip to 2029 if appeals run their course.

How much would a small business save under the settlement?

The headline cut is 0.1 percentage point on average credit interchange. On $60,000 a month in card sales, that works out to roughly $60 a month, before any offsetting changes in network fees, which the settlement does not cap.

Can I add a credit card surcharge under the settlement?

The settlement would expand surcharging rights within network rules, but state law still controls. Some states restrict how surcharges are disclosed or charged, and debit cards are treated differently. Confirm your state rules and your processor agreement before adding any surcharge.

How do swipe fees affect a merchant cash advance?

Many merchant cash advances are repaid from future card sales through a processor split or daily ACH debits. Rising processing costs shrink the revenue left after each sale, which can make fixed daily remittances harder to meet and may be relevant when reviewing reconciliation rights under an MCA contract.

Is CredibleLaw a law firm?

No. CredibleLaw is a national legal resource and attorney referral network. It does not provide legal advice or representation. It can connect business owners with independent attorneys who review MCA, debt, and business finance issues.

Talk to Someone About Your Business Finance Situation

CredibleLaw is a national legal resource and referral network that connects business owners with independent attorneys experienced in merchant cash advance disputes, business debt, and small business finance. If card-processing costs and MCA payments are squeezing your business, you can request a free case review through CredibleLaw’s free case review form or call 888-201-0441. You can also explore our MCA defense attorney resource hub.

Sources

Disclaimer CredibleLaw is not a law firm and does not provide legal advice. This article is for general informational purposes and reflects publicly reported information as of September 21, 2026. Court proceedings are ongoing and details may change. Reading this article does not create an attorney-client relationship. Attorneys in the CredibleLaw network are independent and not employed by CredibleLaw.

Visa Mastercard Swipe Fee Settlement: 978 Merchants Ask a Judge to Say No