by Matt Rej
If your business accepted Discover cards at any point between 2007 and 2023, there’s big money on the table and you have until May 18, 2026 to claim it.
A $1.225 billion class action settlement has been reached against Discover Financial Services, accused of overcharging merchants in excess interchange fees for roughly 17 years.
For most merchants, getting your share of the settlement is not automatic. Even though you may have received a notice of eligibility, you still need to file a claim. If you do nothing, you likely won’t receive any money.
What Discover Did Wrong and Why It Cost Businesses Money
This all comes down to card misclassification.
From 2007 through 2023, Discover systematically coded millions of consumer credit cards as commercial cards when processing transactions. That distinction is huge at the interchange level, particularly for merchant fees paid directly by businesses accepting those cards.
Commercial cards carry higher interchange costs (roughly 2.3%) than consumer cards (roughly 1.5%).
So when Discover labeled a consumer card as commercial, merchants were charged the higher rate without knowing it. According to the FDIC, Discover classified roughly 5 million consumer cards as commercial cards at the end of 2022, and 98% were misclassified.
Merchants had no way to detect this. You processed the card, paid the rate you were charged, and moved on without realizing you were overpaying.
Key Settlement Details
Discover has denied any wrongdoing, but has agreed to pay a settlement valued at $1.225 billion, plus interest, pending final court approval.
The final approval hearing is scheduled for May 20, 2026.
But the deadline to submit a claim is May 18, 2026.
You can submit your claim online through the official Discover Card Class Action Settlement website.
Who is Eligible?
Qualification is broad.
Generally speaking, the settlement covers any business or entity involved in processing or accepting certain Discover card transactions between January 1, 2007 and December 31, 2023, including:
- End Merchants — Any business or individual that accepted a Discover-issued credit card.
- Merchant Acquirers — That had a formal agreement to facilitate Discover transactions.
- Payment Intermediaries — Businesses that processed Discover transactions on behalf of other merchants but don’t fall into the acquirer category.
In short, anyone who accepted Discover cards at any point during that 17-year stretch is eligible for the settlement.
Do You Actually Need to File?
This is worth addressing directly because that’s where we’ve been getting a lot of questions from our clients.
For most merchants: Yes, you need to file
Under the settlement terms, most businesses fall into the category of “indirect end merchants.” If you’re part of this group, you must submit a claim by May 18, 2026 to be eligible for payments.
Receiving a notice of eligibility does not automatically mean you’re going to get a check in the mail. If you don’t file, you likely won’t receive anything.
Limited Exceptions
There’s a small subset of merchants that fall into different categories where payments are handled differently:
- Certain “direct merchants” may already be identified and eligible
- Some may only need to confirm payment details
- Others may qualify automatically
But the reality is that most merchants don’t know which category they fall into. And assuming it’s automatic is a mistake.
So if you’re unsure, the safest move is to review your status and file a claim.
How to File a Claim
The process is simpler than most merchants expect. Here’s how it works:
- Go to discovermerchantsettlement.com/ and register an account.
- Submit a claim using the Claimant ID and PIN in the top right corner of the Claim Form you received (via mail or email).
- Complete the claim form and submit supporting documents.
You typically just need to verify basic business details. The settlement administrator may follow up to request a W-9 or additional records if needed.
Claims can be submitted online or mailed to the settlement administrator. But online submissions are much faster and gives you a confirmation code and email receipt.
What If You Never Received a Notice?
A lot of merchants are asking this right now. Not getting a notice doesn’t mean you’re excluded from the settlement.
Settlement notices and claim forms are being sent out on a rolling basis through April 30, 2026. That means that some businesses may receive theirs closer to the deadline (or not at all).
Some businesses haven’t received anything because their contact information changed (address or email). Even if those things haven’t changed, the claim administrator just may have the wrong information on file. Other times, things get lost in the mail (it happens).
The bottom line is don’t wait for something to arrive in the mail before taking action. Even without a notice, you can still:
- File a claim online
- File without a Claimant ID or PIN
- Determine eligibility directly through the settlement site
You know whether or not you accepted Discover cards between 2007 – 2023. And if you did, then you can file. You are part of the settlement class.
What If You Have Multiple Claimant IDs?
Some people are receiving multiple claim forms with different IDs.
This is common if you have multiple businesses or entities that accepted Discover or even if a single entity had more than one merchant ID (multiple processors, changed processors, had a direct agreement with Discover at one point, etc.).
Whatever the case might be, if you received multiple claim forms and have more than one Claimant ID, you need to file each one individually.
After you submit your first claim, you can link additional Claimant IDs online through the “My Claims” page.
What You Could Receive
The settlement guarantees a minimum of $540 million distributed to class members after legal fees and administrative costs, with the ceiling at $1.225 billion plus interest.
Each payout is calculated on a pro-rate basis, factoring estimated interchange fees overages. relative to the total number of overcharges of all claimants.
The more Discover volume you ran during the class period, the larger your estimated overage and the larger your share of the payout will be.
Once the claim period closes on May 18th, the administrator will review submissions, verify eligibility, and calculate each claimant’s share. Payments will be issued by check or electronic transfer.
Don’t Wait Until The Last Minute to File
The deadline to file is fast approaching. And while filing is relatively straightforward for most businesses, it’s not a one-click process for everyone.
Depending on your setup, filing a claim may involve:
- Verifying your business entity
- Matching Tax IDs or legal names
- Reviewing multiple merchant accounts or MIDs
- Sorting through historically processing relationships
Waiting until the last few days creates unnecessary risk, especially if you run into any issues gathering the required information, which you won’t know you need until you start the filing process.
My recommendation is to file ASAP. That way it’s over and done with, and you won’t have to stress about it at the last minute.