Visa Agrees to Landmark Settlement with U.S. Merchants Reducing Rates and Guaranteeing No Increases for at Least Five Years

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Visa (V) settles a landmark agreement with U.S. merchants after 20 years of litigation, lowering credit interchange rates and providing cost certainty until 2030. The settlement offers benefits like reduced rates, capped rates, and more flexibility for small businesses.
  • Visa reaches a landmark settlement after nearly two decades of legal battles.
  • The agreement lowers credit interchange rates for U.S. merchants, with a focus on small businesses.
  • Interchange rates will be capped until 2030, ensuring cost certainty for merchants.
  • Merchants gain more flexibility at the point-of-sale, including steering to preferred payment methods.
  • The settlement includes funding for programs to educate small businesses.
  • None.

The settlement announced by Visa represents a significant shift in the payment processing landscape. By lowering credit interchange rates, which are fees paid by merchants to card-issuing banks for each transaction, Visa is directly influencing merchant costs. The decision to cap these rates into 2030 offers businesses, especially small ones, a predictable expense structure. This can lead to enhanced budgeting and potentially increased investment in other areas of their operations.

From a market perspective, the reduced rates could encourage more merchants to accept Visa payments, potentially increasing the volume of transactions processed through Visa's network. However, it's essential to consider the impact on Visa's revenue, as interchange fees are a substantial income source for the company. The reduction could be offset by a higher volume of transactions or other revenue streams, but this will be an area to monitor in Visa's financial statements over the coming quarters.

Furthermore, the updates to network rules, such as allowing merchants more choice in payment methods and surcharging, could intensify competition among payment processors. Merchants may leverage these changes to negotiate better terms, which could lead to market share shifts within the industry. This settlement may set a precedent for other payment networks, potentially leading to broader industry changes.

Visa's settlement has immediate implications for its stock valuation. Investors should note that while the settlement may reduce a revenue stream, it also mitigates the risk associated with ongoing litigation. Legal certainty can be a positive signal to the market, often reflected in the stock price stability. The long-term capping of interchange rates introduces predictability, which is generally well-received by the investment community.

It's important to evaluate the settlement in the context of Visa's overall revenue diversification. If Visa can demonstrate an ability to grow alternative revenue sources, such as value-added services or international expansion, the impact of lower interchange fees might be less concerning. Additionally, the potential increase in transaction volume due to more merchants adopting Visa could help compensate for the lower fees per transaction.

Investors should also consider the potential for increased merchant satisfaction and loyalty as a result of these changes, which could contribute to Visa's competitive positioning. The company's ability to adapt to changing market conditions and regulatory environments will be key to maintaining its market leadership and should be a focal point for investor analysis.

For small businesses, the implications of Visa's settlement are multifaceted. On one hand, lower interchange rates can lead to direct cost savings, which is particularly beneficial for small businesses with tight profit margins. These savings could be reinvested into the business or passed on to consumers in the form of lower prices, potentially increasing competitiveness.

However, small businesses must also be aware of the strategic implications of the new network rules. The ability to steer customers to preferred payment methods or implement surcharging requires careful consideration of customer preferences and behaviors. While these options provide more control over payment processing costs, they also come with the risk of alienating customers if not implemented thoughtfully.

The educational programs funded by the settlement could be a valuable resource for small business owners. Understanding the nuances of payment processing fees and the available options can lead to more informed decision-making and enhanced financial management practices. Business owners should take advantage of these programs to maximize the benefits of the settlement.

SAN FRANCISCO--(BUSINESS WIRE)-- After nearly 20 years of litigation, Visa (NYSE: V) today announced it has agreed to a landmark settlement with U.S. merchants, more than 90 percent of which are small businesses, lowering credit interchange rates and capping those rates into 2030. The settlement also provides updates to several key network rules giving merchants more choice in how they accept digital payments.

The agreement’s multi-year benefits for businesses include:

  • Lower interchange rates. The settlement will reduce credit interchange rates for U.S. merchants, comprised largely of small businesses.
  • Interchange rates will not go up. The agreement will cap the reduced credit interchange rates for five years, providing an unprecedented level of cost certainty long sought by merchants.
  • New ways to manage costs. The settlement gives merchants greater flexibility at the point-of-sale, including the opportunity to steer to preferred payment methods and more optionality around surcharging. It also provides funding for new programs to educate small businesses about payment acceptance options and how to best manage costs.

“By negotiating directly with merchants, we have reached a settlement with meaningful concessions that address true pain points small businesses have identified,” said Kim Lawrence, President, North America, Visa. “Importantly, we are making these concessions while also maintaining the safety, security, innovation, protections, rewards and access to credit that are so important to millions of Americans and to our economy.”

Today’s settlement agreement with merchants resolves claims against Visa, Mastercard and other defendants brought by the injunctive relief class in the lawsuit entitled In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. It is subject to approval by the court.

About Visa

Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable, and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are identified by words such as “will,” “is expected,” and other similar expressions. Examples of forward-looking statements include, but are not limited to, the terms of the settlement agreement and expectations regarding the impact of the settlement agreement.

By their nature, forward-looking statements: (i) speak only as of the date they are made; (ii) are not statements of historical fact or guarantees of future performance; and (iii) are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from Visa’s forward-looking statements due to a variety of factors, including the timing and outcome of the court approval process, Visa’s ability to recognize the intended benefits of the settlement, Visa’s ability to effect its obligations under the settlement agreement, and various other factors, including those contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and our other filings with the U.S. Securities and Exchange Commission.

You should not place undue reliance on such statements. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future developments or otherwise.

Curtis Blessing

Source: Visa Inc.


What is the ticker symbol for Visa?

The ticker symbol for Visa is V.

What does the settlement with U.S. merchants involve?

The settlement involves lowering credit interchange rates and capping them until 2030.

How will the agreement benefit small businesses?

Small businesses will see reduced interchange rates and more flexibility at the point-of-sale.

What is the duration of the rate cap in the settlement?

The rate cap in the settlement will last for five years.

What additional provisions are included in the settlement for merchants?

The settlement offers merchants more choice in accepting digital payments and funding for programs to educate small businesses.

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About V

Visa Inc. is an American multinational financial services corporation headquartered in San Francisco, California. It facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, debit cards and prepaid cards. Visa is one of the worlds most valuable companies.