In a landmark antitrust settlement announced on Tuesday, Visa and Mastercard have reached an approximate $30 billion agreement aimed at curbing credit and debit card fees for merchants, potentially leading to lower prices for consumers.

This settlement, considered one of the largest in U.S. history, is poised to resolve the bulk of claims in nationwide litigation that originated in 2005, pending court approval. While viewed as a significant step, some critics argue that the savings

Merchants have long accused Visa and Mastercard of imposing inflated swipe fees, also known as interchange fees, and restricting them from steering customers towards more cost-effective payment methods through "anti-steering" rules.

Under the terms of the settlement, both Visa and Mastercard commit to reducing swipe rates by at least four basis points for three years and ensuring an average rate seven basis points below the current average for five years. Additionally, the agreement includes caps on rates for five years and the removal of anti-steering provisions.

Merchants will gain more flexibility to offer discounts or surcharges on cards with higher interchange fees, a practice already observed by many at checkout.

According to court documents, the fee rollbacks and caps alone are valued at $29.79 billion. Visa estimates that small businesses represent over 90% of the participating merchants.

While both Visa and Mastercard deny any wrongdoing, they acknowledge the settlement addresses concerns raised by small businesses. However, approval from U.S. District Judge Margo Brodie in Brooklyn, New York, is required, with potential appeals extending the timeline to late 2024 or early 2025.

Despite the settlement, opposition is expected, especially from merchants who opted out of previous settlements and are pursuing separate lawsuits seeking damages. Critics argue that the settlement falls short, with U.S. merchants still facing high swipe fees compared to other developed nations.

While some believe the settlement could result in substantial savings for merchants, others remain skeptical. Nonetheless, Visa and Mastercard have agreed to cover up to $170 million in legal fees and expenses for plaintiffs' lawyers, signalling a significant development in the ongoing debate surrounding card fees and competition in the payment industry.