A coalition of 978 businesses and trade associations has asked a federal judge to reject the proposed settlement of the long-running Visa and Mastercard merchant swipe-fee litigation, arguing that the agreement offers temporary concessions while preserving the pricing structure at the center of the dispute.
The objections were filed September 10 in the U.S. District Court for the Eastern District of New York in In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, docket 1:05-md-01720. The court granted the proposal preliminary approval in June, but that was not a final judgment. The latest filing asks Judge Brian Cogan to deny final approval.
The Merchant Payments Coalition publicized the filing on September 14. Its signatories include trade groups and small, medium and large businesses across retail, restaurants, supermarkets, convenience stores and fuel retailing. The filing represents opposition from those signatories; it does not establish the views of every member of the settlement class.
Temporary rate relief faces a structural objection
The settlement would reduce covered interchange rates by one-tenth of a percentage point for five years, according to the coalition’s account of the agreement and contemporaneous trade reporting. Interchange is paid through the merchant-acceptance chain to card issuers, while Visa and Mastercard also charge separate network fees.
The objectors argue that the reduction is too small and too short, and that it leaves Visa and Mastercard’s role in setting networkwide fee schedules and transaction rules substantially intact. They also contend that the relief does not constrain separate network fees. Those are allegations made by opponents of the deal, not findings by the court.
For acquirers, processors and payment service providers, this distinction matters operationally. A headline reduction in one fee component does not necessarily produce an equivalent reduction in a merchant’s total acceptance cost. Contract repricing, scheme-fee changes, card mix and processor markups can all affect what reaches the merchant statement. Providers would need to model the settlement at the transaction and card-product level rather than treat the announced reduction as a uniform discount.
The standard-card cap may cover a narrow segment
The proposal would temporarily cap interchange on standard consumer credit cards at 1.25%. The objectors say standard cards are a small and shrinking part of the market and argue issuers could reclassify products or introduce other categories outside the cap. The available material does not establish that issuers intend to do so, but the objection highlights a control question the court must weigh: whether product definitions and anti-evasion provisions are strong enough to make the cap effective.
The agreement would also modify the “honor all cards” framework so merchants could reject premium cards while accepting standard cards. The signatories argue that this is not a practical choice because rewards and premium products account for most credit-card spending. Even where selective acceptance is permitted, merchants and their providers would need accurate product identification, checkout messaging, routing logic and decline handling. Customer confusion and inconsistent card classification could turn a legal option into a costly operational exception.
Surcharging relief comes with implementation risk
Another provision would allow merchants to surcharge credit-card purchases by as much as 3%. The objectors say state laws and network rules make surcharging complicated and that consumers often blame the merchant. They further allege the settlement would allow Visa and Mastercard to charge higher fees to merchants that surcharge, potentially offsetting the benefit.
Any merchant considering that option would still need jurisdiction-specific legal review and coordinated controls across point-of-sale, e-commerce, receipts, disclosures and refunds. Acquirers and processors would need to ensure that configurations do not exceed applicable caps or apply a surcharge to an ineligible transaction. The settlement would create an option, not remove those compliance and customer-experience risks.
The liability release may be the most consequential issue
The filing’s broadest concern is the release of future claims. The objectors say the agreement would give Visa, Mastercard and issuing banks sweeping protection not only for claims raised in the case but also for matters that could have been raised, including future conduct and injuries. They describe the duration and reach of that protection as uncertain and disproportionate to five years of fee relief.
That trade-off is central to the final-approval decision. A settlement can change rates and rules for a fixed period while also limiting the legal avenues merchants may use later. The court must determine whether the negotiated package is fair, reasonable and adequate for the class; the filing does not decide that question.
Digital Transactions independently reviewed the objection and reported that an Electronic Payments Coalition spokesperson could not immediately be reached for comment. The accessible sources reviewed for this article did not include a new public response from Visa, Mastercard or the card-industry coalition to the September 10 filing.
For payments professionals, the immediate takeaway is not that settlement terms are in force or that rejection is assured. Final approval remains pending. The practical task is scenario planning: quantify relief by card type and fee component, test selective-acceptance and surcharge controls, and assess how the proposed release could affect future merchant disputes before relying on the agreement as a durable reset of card-acceptance economics.