The 2026 Visa/Mastercard settlement: what actually changes for a small merchant, and when

By Daniel Wilson Kemp · Founder, Lifted Payments · July 26, 2026

The short version for a merchant who does not follow antitrust dockets: a 21-year-old lawsuit over Visa and Mastercard swipe fees just cleared a real hurdle, but nothing on your statement changes yet. On June 9, 2026, Judge Brian Cogan of the U.S. District Court for the Eastern District of New York granted preliminary approval to a settlement that would modestly lower credit interchange and hand merchants more freedom to steer, surcharge, and refuse expensive cards. Preliminary is the operative word. The deal still faces a notice-and-comment period, a final-approval decision, and a near-certain appeal before a single basis point moves.

This is a genuine 2026 development in a case that has been grinding since 2005, and it is worth understanding precisely, because the headline numbers are easy to misread. Below is what the court approved, what each provision actually does, why some of the largest retailers in the country are fighting a settlement that lowers their fees, and where a small or mid-sized merchant should place their attention.

What the court approved on June 9

Judge Cogan had rejected an earlier version of this settlement in 2024, so the June 9 order is a reversal born of renegotiation. According to Payments Dive (June 2026), the class covers roughly 12 million merchants. Reporting from PYMNTS (June 2026) notes the judge described the deal as "fair, reasonable, and adequate" and said he was likely to approve it. Independent analysis by Redbridge (June 2026) pegs the estimated value at $38 billion and lays out the mechanics in detail.

For scale on what is being negotiated over: Redbridge reports that U.S. Visa and Mastercard swipe fees reached $118.8 billion in 2025, up 6.8% from 2024. Set against that annual figure, the relief here is real but incremental, not a reset.

The four core changes, in plain terms

• A 10-basis-point cut for five years. Per Redbridge (2026), the U.S. combined average effective credit interchange rate would fall by 10 basis points (0.10%) for five years, applied proportionally across merchants' negotiated rates. Published credit interchange rates would also be frozen for those five years.
• A 1.25% cap on four consumer products for eight years. This is the provision most often misreported. It does not cap every card.
• Expanded surcharge and steering rights. Redbridge reports merchants could surcharge Visa and Mastercard credit transactions up to 3%, at the brand level or the product level, though state laws are not overridden.
• The end of Honor All Cards. Payments Dive (2026) reports merchants would gain the right to decline some higher-cost premium and commercial Visa and Mastercard credit cards, breaking with the networks' traditional all-or-nothing acceptance policy.

The 1.25% cap applies to four cards, not all of them

Read the coverage carefully and this is the detail that separates accurate reporting from wishful thinking. The 1.25% ceiling does not apply to your whole card mix. Redbridge (2026) names the four consumer products it covers: Visa Traditional, Visa Traditional Rewards, Mastercard Core, and Mastercard Enhanced Value. Premium rewards cards, corporate cards, purchasing cards, and the fee-heavy commercial products that push a merchant's effective rate up are not on that list.

Why this matters: PYMNTS (2026) notes typical interchange runs about 2% to 2.5%, and the cards that sit at the high end are precisely the ones the cap excludes. So a merchant heavy on premium travel-rewards cards should not expect their blended cost to drop to 1.25%. The honest expectation is a small reduction on a slice of volume, plus new tools to manage the expensive end yourself. Note too that these settlement terms are separate from the routine interchange schedules Visa and Mastercard revise each year, which we track in our overview of the 2026 interchange changes. If you want to understand how your own rate is built, our explainer on interchange-plus vs. flat-rate pricing walks through where interchange sits inside what you actually pay, and the effective-rate calculator turns your statement into a single all-in percentage.

Why big retailers are fighting a settlement that lowers fees

It looks paradoxical: a deal that reduces swipe fees, opposed by the merchants who pay them. The objectors are not fringe. PYMNTS reported in 2026 that Walmart, the National Retail Federation, and the Retail Industry Leaders Association lined up against the terms, with their attorney Debra Greenberger telling the court that many retailers would rather take the case to trial and risk losing than hold to the settlement’s terms. Convenience-store group NACS is also opposed; its general counsel Doug Kantor said "the vast majority of merchants out there across the country have concerns about the settlement," per Payments Dive (2026).

The logic is about magnitude and duration. The settlement's proponents, including the card-industry Electronic Payments Coalition, put its total value to merchants at about $200 billion over eight years, per PYMNTS (2026). Critics counter that even that figure is modest against a fee stream that topped $118 billion in a single year, and argue a temporary trim locks in the networks' pricing power in exchange for changes that expire. Large retailers with the leverage to negotiate directly, or to keep litigating toward structural reform, see a time-limited discount as a bad trade. When retailers said they preferred a trial, Judge Cogan's reported reply was blunt: "Be careful what you wish for."

What actually changes for a small merchant, and when

• Right now: nothing on your statement. Preliminary approval starts a notice-and-comment period. The fee changes do not take effect on approval, and none are live in mid-2026.
• Next: final approval, then an appeal. NACS has said it will appeal to the Second Circuit U.S. Court of Appeals if Judge Cogan grants final approval, per Payments Dive (2026). An appeal can delay implementation well beyond the approval date.
• If it holds: a small cut plus more control. Expect a modest reduction on part of your volume, a rate freeze, and new latitude to surcharge or decline expensive cards, subject to your state's rules.
• Surcharging is still governed by state law. The settlement does not override it. Where you can surcharge, and how you must disclose it, still depends on where you operate.

The practical takeaway is that this settlement is a reason to get your pricing in order, not a reason to wait for relief that is years away and legally contingent. The levers you control today matter more than a 10-basis-point cut that has to survive an appeal. Passing full Level 2/3 data on commercial and government cards, for instance, can lower interchange on those transactions now, no court order required. Our guide on how to lower credit card processing fees covers the moves that are available immediately.

On surcharging specifically, treat it as an option to understand, not a default to adopt. If the Honor All Cards change and the new surcharge ceiling do take effect, the decision to add a fee is a customer-experience and compliance question as much as a cost one. We keep that topic educational and vendor-neutral: see credit card surcharge rules by state and our 2026 surcharging report before assuming a surcharge is right for your business.

Where Lifted Payments fits, honestly

We are a payments ISO and software agency, not a party to this case, and we will not pretend a national antitrust settlement is a Lifted product feature. What we can do is make sure you are not overpaying regardless of how the appeals shake out. Our model is interchange-plus pricing quoted after a one-statement review, with no application fee, so you see the network interchange and our margin as separate line items rather than a blended rate that hides where your money goes. We append Level 2/3 data automatically on qualifying commercial cards, which is one of the few interchange reductions a merchant can capture today.

If you have read this far because your processing costs feel high, the settlement is the wrong thing to wait on. Send us one recent statement and we will give you an honest interchange-plus review. Start with our merchant services overview, and we will tell you plainly whether we can beat what you have.

Sources

1. Payments Dive — Court approves Visa, Mastercard settlement (June 9, 2026) — Preliminary approval June 9, 2026 by Judge Brian Cogan (EDNY, Brooklyn); ~12M merchants; 10bp cut for 5 years; 1.25% for standard consumer cards for 8 years; end of Honor All Cards; surcharge/steering rights (no % stated); NACS to appeal to 2nd Circuit; Doug Kantor 'the vast majority of merchants out there across the country have concerns about the settlement.'
2. Redbridge — The Visa/Mastercard $38 billion swipe-fee settlement (June 17, 2026) — $38B estimated value; 10bp average cut and 5-year published-rate freeze; four capped products (Visa Traditional, Visa Traditional Rewards, Mastercard Core, Mastercard Enhanced Value) at 1.25% for 8 years; surcharge up to 3% at brand or product level; 2025 US Visa/Mastercard swipe fees $118.8B (+6.8% vs 2024).
3. PYMNTS — Retailers object to $200 billion Visa/Mastercard swipe-fee settlement (April 28, 2026) — Walmart, National Retail Federation, Retail Industry Leaders Association object; attorney Debra Greenberger would rather go to trial than accept the terms; Cogan 'be careful what you wish for'; typical interchange 2%–2.5%; $200B = the settlement's claimed 8-year value/relief to merchants (proponents' framing).
4. PYMNTS — Judge signals approval for Visa and Mastercard swipe-fee settlement (June 9, 2026) — Judge called it 'fair, reasonable, and adequate' and likely to approve; prior settlement rejected in 2024; June 9, 2026 preliminary approval; $38B settlement amount; $200B total 8-year value per Electronic Payments Coalition (EPC).