2026 interchange changes: what merchants need to know.

2026 is the biggest year of change to U.S. card-acceptance costs in over a decade. The Visa–Mastercard interchange settlement won preliminary court approval on June 9, 2026, Visa retired its standalone Level 2 program in April in favor of CEDP, Mastercard raised or added a half-dozen fees in January, and Illinois' first-in-the-nation interchange law was blocked for most banks and pushed to 2027. Whether any of it shows up on your statement depends almost entirely on how your pricing is structured — more on that below.

Latest developments (news): we track the fast-moving pieces in depth on the news desk — the Visa/Mastercard settlement, the Visa Level 2 / CEDP sunset, and the Credit Card Competition Act. This page stays the evergreen overview; the news pages carry the dated detail. See all payments news.

The Visa–Mastercard settlement: agreed, not final

After nearly two decades of antitrust litigation, Visa, Mastercard, and a class of roughly 12 million merchants reached a revised settlement that U.S. District Judge Brian Cogan granted preliminary approval in the Eastern District of New York on June 9, 2026. The headline terms:

• A 10-basis-point cut to the average effective U.S. credit interchange rate, held for five years — projected at an estimated $38 billion in settlement value.
• A 1.25% cap on standard U.S. consumer credit interchange for eight years. Premium rewards and commercial cards are not capped.
• "Honor all cards" loosened: merchants gain the right to decline higher-cost premium and commercial card categories instead of accepting every card or none.
• Looser surcharging and discounting rules: more room to surcharge at the brand or product level and to steer customers away from the most expensive cards. State law still applies — see surcharge rules by state.

Where it stands (as of July 2026): preliminary approval only. A notice-and-comment period runs next, then Judge Cogan considers final approval — and some merchant trade groups have already said they'll appeal to the Second Circuit if he grants it, per Merchant Cost Consulting's June 2026 update. No new interchange tables have been published. Treat the rest of 2026 as a planning window: the realistic earliest window for lower rates is late 2026, and appeals could push real changes into 2027.

The part most coverage buries: an interchange cut lowers your processor's cost, not automatically your price. On flat-rate or bundled pricing, the processor can simply keep the spread. On interchange-plus pricing, interchange passes through at cost — the cut lands with you. Positioning for the settlement mostly means fixing your pricing model before the cuts arrive.

Visa's CEDP: Level 2 is gone — enhanced data still pays

Visa has replaced its long-standing Level 2 and Level 3 commercial-card programs with the Commercial Enhanced Data Program (CEDP). Two dates matter. In October 2025, Visa began validating Level 3 data under CEDP instead of taking submitted fields on faith, per Finix. And in April 2026, the standalone Level 2 interchange program sunset for small-business and commercial credit products — industry summaries note only a fleet fuel-only carve-out remains. If you relied on Level 2 rates, those transactions have been repricing since spring.

The practical takeaway is not "the discounts are gone." It's that the discounts moved behind a qualification bar. Under CEDP, enhanced-data rates require accurate, validated data on every transaction: real line-item descriptions, legitimate product codes (SKUs or manufacturer codes — not placeholders or MCCs), and correct tax fields. Visa scores merchants into Verified status, charges a 0.05% participation fee on qualifying transactions, and can retroactively downgrade past transactions when submitted data turns out to be junk — PayPal's CEDP overview covers the mechanics.

If commercial, purchasing, or government cards are a real share of your volume, this is the 2026 change most worth acting on. The gap between qualified and unqualified rates on those cards is large, and it's now earned per-transaction rather than granted for boilerplate fields. See how Level 2/3 processing works and what it means for B2B card acceptance — the right setup appends and validates this data automatically, so qualification isn't a manual chore.

Mastercard's 2026 fee changes

Alongside the settlement headlines, Mastercard shipped a quieter batch of network-fee changes, effective January 1, 2026. The theme: sloppy authorization practices now cost real money — including on transactions that decline.

Figures above follow industry fee trackers (Merchant Cost Consulting's 2026 update); networks publish these schedules to acquirers rather than the public, so confirm exact amounts on your own statement. None of these is huge alone, but they compound — and because they're network fees, they appear on every pricing model. If your statement shows a jump in "other fees" this year, this list is the first place to look. Our guide to lowering processing fees walks through reading those line items.

The Illinois Interchange Fee Prohibition Act

Illinois passed the first U.S. law to regulate interchange directly: the Interchange Fee Prohibition Act bans charging interchange on the tax and tip portions of a transaction. The banking industry sued, and 2026 turned into a rolling series of losses for the law:

• February 10, 2026 — a federal judge in the Northern District of Illinois upheld the core interchange limitation for some institutions but permanently enjoined the law's data-use restriction.
• April 24, 2026 — the OCC issued an interim final order declaring the law federally preempted for national banks and federal savings associations, effective June 30, 2026.
• June 1, 2026 — on remand, the court permanently enjoined the law as to national banks, federal savings associations, out-of-state banks, and the card networks — leaving mainly Illinois-chartered banks and credit unions covered.
• June 2026 — the Illinois legislature (SB 3645) delayed the law's effective date a full year, from July 1, 2026 to July 1, 2027.

What it means if you sell in Illinois: nothing changes at the register in 2026. Even in 2027, the law now reaches only a narrow slice of issuers, litigation continues, and any savings would cover only the tax-and-tip portion of each ticket — and would reach you only if your pricing passes interchange through. Other states are watching this fight; we'll track copycat bills here as they appear.

What merchants should actually do

You can't control a Brooklyn courtroom or Visa's rate tables. You can control whether changes reach your bank account:

• Know your effective rate. Total fees ÷ total volume, from a real statement. It's the only number that captures interchange, markup, and all the new line items at once — run it in two minutes with our effective rate calculator.
• Get on interchange-plus before the cuts land. This is the single biggest lever. When the settlement's rate cuts take effect, interchange-plus merchants receive them automatically; flat-rate merchants are counting on their processor's generosity.
• Check your Level 2/3 qualification. If you take commercial cards, confirm your gateway submits validated CEDP-grade data — placeholder data that qualified last year now fails, and can be downgraded retroactively. Start with Level 2/3 processing.
• Watch the surcharge rules. The settlement loosens network surcharging restrictions, but state law governs what's actually allowed where you sell — keep an eye on surcharge rules by state before changing anything at checkout.
• Audit statements for the new Mastercard fees. Declined-auth fees in particular reward cleaning up authorization practices: correct channel indicators, no force-posts, account updater for cards on file.

How Lifted Payments handles this

Lifted Payments prices every merchant on interchange-plus, quoted after reading one recent statement — so when network rates move, the movement is yours, itemized on the statement. Card processing runs on the Maverick gateway with automatic Level 2/3 data on commercial cards, which is exactly the muscle CEDP-era qualification demands, and ACH/eCheck runs on the NMI gateway for invoices where cards don't make sense. There's no application fee: send one statement and get an honest read on where you stand before any of these changes hit.