The Visa and Mastercard $5.54 billion interchange fee settlement represents one of the largest antitrust settlements involving payment card companies in U.S. history. Approved in February 2019 by U.S.
District Court Judge Margo K. Brodie, this settlement compensates merchants who were charged inflated interchange fees—the percentages merchants pay when customers use Visa or Mastercard credit and debit cards—over a 15-year period from January 1, 2004, through January 25, 2019. For example, a small retail business that processed thousands of card transactions during this period could be entitled to thousands or even tens of thousands in settlement compensation if it meets the class definition. This article explains what this settlement covers, how payments have been distributed, and what merchants need to know about a new settlement framework announced in November 2025 that aims to cap interchange fees going forward.
Table of Contents
- What Is an Interchange Fee and Why Was This Settlement Needed?
- Who Was Eligible to Claim Settlement Money and What Was the Deadline?
- How Was Settlement Money Distributed to Merchants?
- The New 2025 Settlement—What Changed?
- How Will Merchants Benefit from the New Rate Caps?
- How to File a Claim for the 2019 Settlement If You Haven’t Already
- What Merchants Should Do Now and What’s Coming Next
- Frequently Asked Questions
What Is an Interchange Fee and Why Was This Settlement Needed?
Interchange fees are the charges that Visa and Mastercard assessed to merchants every time a customer paid with their cards. These fees typically run 1-3% of each transaction and go directly to the card issuing banks, not to Visa or Mastercard themselves. However, Visa and Mastercard set the interchange rates and rules that banks must follow, giving them enormous control over what merchants pay. The lawsuit alleged that Visa and Mastercard illegally fixed these interchange rates at artificially high levels, violating antitrust law by preventing competition that would have driven fees down.
A comparison illustrates the issue: a merchant processing $100,000 in monthly card volume at a 2% interchange rate pays $2,000 per month in fees. If market competition had reduced rates to 1.5%, that same merchant would have paid $1,500—a $6,000 annual difference for just one business. The settlement required Visa and Mastercard to pay $5.54 billion to compensate merchants for the overcharges they suffered during the class period. The class period ran for 15 years, making this an exceptionally broad settlement that affected nearly any merchant who accepted Visa or Mastercard during that time. The case, formally titled “In re Payment Card Interchange Fee Litigation,” proceeded through the federal court system for years before reaching this historic resolution.
Who Was Eligible to Claim Settlement Money and What Was the Deadline?
Any merchant who accepted Visa and/or Mastercard credit cards at any point between January 1, 2004, and January 25, 2019, was eligible to file a claim in this settlement. This includes retail stores, restaurants, gas stations, online merchants, service businesses—essentially any business that took cards during this period. The settlement did not require merchants to prove they were overcharged; simply accepting the cards during the class period qualified them. However, there was a critical deadline: February 4, 2025.
This was the deadline for merchants to submit claim forms. If a merchant did not file by this date, they lost their right to receive settlement compensation, even if they were fully eligible. This deadline has now passed, meaning merchants who did not submit claims before February 4, 2025, are permanently barred from participating in this particular settlement distribution. It is important to note that if you did not file a claim by February 4, 2025, you cannot recover from this settlement. No extensions or late filings are being accepted at this stage.
How Was Settlement Money Distributed to Merchants?
The distribution process unfolded in stages. On October 30, 2025, the federal court approved an initial, partial distribution of settlement funds for claims that had been finalized and verified. This meant that the settlement administrator had completed processing those claims and determined the merchants were eligible. Starting in February 2026, approved merchants began receiving payments on a rolling basis.
This means some merchants received their payments in early February 2026, while others received theirs later in the month or continuing into subsequent months, depending on when their claim was fully processed. The settlement amount of $5.54 billion was divided among all eligible claimants. The exact amount each merchant received depended on various factors, including how much card volume they processed during the class period and the specific nature of their business (for example, restaurants might receive a different allocation than retail stores, reflecting different average interchange rates in those industries). Merchants should monitor the official Payment Card Settlement website for status updates on their individual claims and expected payment dates. If a merchant filed a valid claim before the deadline, they should have received notification about their payment status by late 2025 or early 2026.
The New 2025 Settlement—What Changed?
In November 2025, Visa and Mastercard announced a new settlement framework that goes beyond the 2019 agreement. Rather than just compensating for past overcharges, this new settlement actually changes the business practices going forward. The key provisions include new merchant rights to decline higher-cost Visa and Mastercard credit cards, the ability to add surcharges for accepting certain card types, and importantly, caps on interchange rates themselves. Standard consumer card rates are capped at 1.25% for the entire 8-year settlement term.
Additionally, posted credit interchange rates will be capped for 5 years, and the combined average effective credit interchange rate is expected to drop by 10 basis points—meaning merchants should pay measurably less in interchange fees going forward. The settlement also includes a $21 million merchant education program to help businesses understand their new rights under the agreement. This new settlement is still pending approval from federal judge Brian Cogan in the Eastern District of New York. Court approval is expected in late 2026 or early 2027, meaning these new protections and rate caps will not take effect until after judicial review. The key difference between the 2019 settlement and the 2025 settlement is that the 2019 deal was retroactive—it compensated merchants for past conduct—while the 2025 deal is prospective, changing the rules going forward.
How Will Merchants Benefit from the New Rate Caps?
Under the new settlement framework, merchants gain unprecedented flexibility and cost relief. Previously, a merchant had to accept all Visa and Mastercard products at the rates Visa and Mastercard dictated. Under the new rules, a merchant could decline to accept Visa’s most expensive premium credit cards (those with high rewards programs and high interchange rates) while still accepting their standard credit and debit cards. A restaurant chain, for example, might determine that the 2.5% interchange rate on a premium rewards card is too costly and refuse that specific product, accepting only standard Visa credit cards at the 1.25% cap.
This gives merchants control they never had before. The rate caps are significant for all merchant sizes, but they affect different businesses in different ways. A high-volume merchant processing millions in transactions annually will see dramatic dollar savings from a 10 basis point reduction. However, merchants should be aware that if the new settlement is not approved by judge Cogan, these rate caps will not go into effect. The approval process could take until early 2027, so merchants should continue monitoring official sources for updates on the judicial review timeline.
How to File a Claim for the 2019 Settlement If You Haven’t Already
If you did not file a claim for the 2019 settlement before the February 4, 2025, deadline, you cannot participate in that distribution. However, if you have already filed a claim and want to check the status of your payment, visit the official Payment Card Settlement website at www.paymentcardsettlement.com. On the site, you can use the claim tracker tool to enter your claim information and see whether your claim has been processed and when your payment is expected.
You can also download the FAQ section, which answers common questions about who is eligible, what documentation is needed, and how payments are calculated. For future reference, if Visa and Mastercard reach additional settlements or if merchants discover additional class actions, claim deadlines are typically published in major business news outlets and on court documents. You should also subscribe to settlement notice services or monitor the official settlement websites regularly, as deadlines can pass quickly and extensions are rarely granted.
What Merchants Should Do Now and What’s Coming Next
For merchants who have already filed claims in the 2019 settlement, the focus is now on monitoring payment status and ensuring your banking information is current so payments can be delivered. If you have not received a payment by the end of the first quarter of 2026, contact the settlement administrator directly through the official website for a status update. Looking ahead, merchants should watch for the decision from judge Brian Cogan on the 2025 settlement.
If approved, the new rate caps and merchant rights will fundamentally change the economics of accepting Visa and Mastercard. Merchants should also consult with their payment processors about implementing the new surcharging rights once the settlement is approved, as this may require system updates and consumer disclosures. This evolving settlement landscape offers merchants more control over their payment card costs than ever before.
Frequently Asked Questions
What is an interchange fee?
An interchange fee is the percentage amount that Visa and Mastercard require merchants to pay each time a customer uses their card. These fees typically range from 1-3% of the transaction amount and go to the card-issuing banks. Visa and Mastercard set the rates and rules that govern interchange fees.
Who was eligible for the 2019 settlement?
Any merchant who accepted Visa and/or Mastercard credit cards between January 1, 2004, and January 25, 2019, was eligible. This includes retail stores, restaurants, online businesses, and service providers. Merchants did not need to prove they were overcharged; acceptance of the cards during the class period qualified them.
What was the deadline to file a claim for the 2019 settlement?
The deadline was February 4, 2025. This deadline has now passed. Merchants who did not file a claim by this date cannot receive compensation from the 2019 settlement.
When will I receive my payment if I filed a claim?
Payments were approved for distribution starting October 30, 2025, and actual payments began in February 2026 on a rolling basis. Merchants should check the official Payment Card Settlement website to track their individual claim status and expected payment date.
What is the new 2025 settlement about?
The new settlement announced in November 2025 changes Visa and Mastercard business practices going forward rather than just compensating for past overcharges. It includes rate caps (standard consumer cards capped at 1.25%), merchant rights to decline expensive card products, and permission to add surcharges. It is pending court approval, expected in late 2026 or early 2027.
How do I check the status of my claim?
Visit the official Payment Card Settlement website at www.paymentcardsettlement.com and use the claim tracker tool. You can also contact the settlement administrator directly if you have questions about your claim or payment status.
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