You Can Now Say No To Specific Cards

What the $38 billion Visa/Mastercard swipe fee settlement actually changes for merchants

A $38 billion settlement between Visa, Mastercard, and U.S. merchants just received preliminary federal court approval. The headline rate reduction is the least interesting part of the deal. The real shift is in what merchants will be allowed to do at the point of sale.

The Rate Cut Isn't The Story

Under the settlement, interchange fees drop by 0.1 percentage point for five years, and standard consumer credit cards get capped at 1.25% for eight years. Measured against a 2024 average of 2.35% across Visa and Mastercard, that reduction is small enough that the networks can absorb it without much strain.

The Real Change Is The End Of "Honor All Cards"

For the first time since the rule was established, merchants will gain the right to decline entire categories of premium or rewards cards, and to surcharge or discount by specific card tier rather than only by network. This is a meaningfully different lever than the blanket surcharging most merchants have been limited to, since it allows targeting the specific card types driving the highest interchange costs.

Targeted Surcharging Is Lower Risk Than It Looks

Recent J.D. Power data cited alongside coverage of the settlement found that only 22 percent of premium cardholders say they'd switch payment methods if surcharged, compared to 33 percent of no-fee cardholders. Premium cardholders also spend nearly three times more per month on average. Once this settlement is final, surcharging selectively by tier is likely to prove a much lower-risk lever than surcharging every card equally.

It's Not Final Yet

This is preliminary court approval, not a finalized settlement. The National Retail Federation has already called the deal insufficient, stating it leaves the underlying system that lets Visa and Mastercard set the rules largely intact. Merchants should treat this as a development worth watching closely rather than something to plan a pricing strategy around just yet.

The Takeaway

If you could decline specific premium card tiers tomorrow, would you? Once this settlement is finalized, that decision will actually be available to merchants for the first time, and it's worth thinking through now rather than scrambling to decide once the rule change takes effect.