News in Brief

US Interchange Fee Peace Possible

Reuter has reported that Visa and Mastercard have agreed a $38 billion settlement with US retailers over interchange fees by agreeing to cut interchange fees, which typically average 2-2.5% per transaction, by a tenth of a percentage point over several years. The settlement includes an eight-year cap on standard consumer card rates at 1.25%, representing a decrease of over 25%.

Additionally, merchants would gain expanded rights to impose surcharges on card payments, with a court filing highlighting an ‘unfettered’ ability to levy up to a 3% charge.

Under the new agreement, they are also promising to let merchants have freedom of choice over which cards they have to accept. The arrangement could divide credit card acceptance into multiple categories such as rewards credit cards, credit cards with no rewards programs, and commercial cards.